Businesses often ask us what taxes they have to pay to do business in Asheville, in addition to the expected State and Federal income taxes.
State Taxes in North Carolina
North Carolina’s corporate income tax rate is currently 2.5% for tax years beginning on or after January 1, 2019. In North Carolina, the state also imposes a flat sales tax rate of 5.75% and counties may add from 1% to 1.75% in local sales and use taxes.
Sales Taxes in the Asheville MSA
The total sales tax rate for Buncombe County (Asheville, Weaverville and Black Mountain are included) is 7%, Haywood County (Waynesville) is 7%, Henderson County is 6.75%, and Madison County (Marshall and Mars Hill are included) is 6.75%.
Property Taxes in Asheville
Most cities and towns in our state rely primarily on property taxes for their budgets. State laws make it illegal for municipalities to impose their own special taxes, such as impact fees on new subdivisions or occupancy taxes on hotel rooms. Fees for water rates, garbage bills and other city services are only allowed to be high enough to cover the cost of service. Property and sales taxes are Asheville's primary way to pay for police, firefighting and other "core services."
Other Taxes in Asheville
Builders and developers pay for licenses and permits which cover the cost of city and county services. Car, truck and other vehicle owners pay licensing fees which help pay for street improvements and public transportation. $16 million in hotel taxes were collected in 2016 and went to the Buncombe County Tourism Development Authority, which used most of the money to market the area to tourists.
Taxes the city DOESN’T receive
More than half of taxes Asheville property owners pay on combined bills goes to Buncombe County government. Most property owners are also billed for an Asheville City Schools or Buncombe County Schools tax. And oddly enough, the state constitution gives traffic ticket payments to school boards.
Let us know if you have any questions about when taxes are due and where to send them. We’re here to help you pay the least amount of tax necessary, but to get them paid on time.
For more information, visit the Asheville Chamber's webpage at https://www.ashevillechamber.org/research-economy/taxes/
Sources: NC Department of Revenue, dor.state.nc.us/business, and “How Asheville Does (and doesn’t) tax you,” Asheville Citizen-Times, April 18, 2017.