Does North Carolina Have a Minimum Franchise Tax?

No. North Carolina does not impose a franchise tax on LLCs or other business entities. Under N.C.G.S. Chapter 105, Article 4, the state taxes only pass-through income at the owner level using a flat 3.99% individual income-tax rate (for tax years beginning after 2025). There is no separate entity-level franchise or privilege tax.

What Taxes Apply Instead

Income Tax

North Carolina taxes LLC income at the owner level, not the entity level. Pass-through income flows to owners' personal tax returns and is taxed at 3.99% under N.C.G.S. Chapter 105, Article 4. Single-member LLCs are treated as disregarded entities for federal purposes, while multi-member LLCs default to partnership taxation. Both structures allow income to pass through without entity-level taxation.

Sales Tax

If your LLC sells taxable goods or services, you must register for North Carolina's 4.75% state sales and use tax, plus applicable local rates. Register at https://www.ncdor.gov/taxes-forms/register-business.

Self-Employment Tax

LLC owners pay federal self-employment tax on net business income. Estimated tax payments are due April 15, June 15, September 15, and January 15 each year.

Annual Compliance Costs

Your primary state obligation is filing an annual report by April 15 each year. The filing fee is $203.00 under N.C.G.S. § 57D-2-24. Failure to file within 60 days of the deadline may result in administrative dissolution or revocation of your LLC.

Reinstatement after dissolution requires a $100.00 reinstatement fee plus payment of all delinquent annual report fees.

Next Steps

File Articles of Organization with the North Carolina Secretary of State ($125.00 filing fee).
Register for sales tax if applicable through the North Carolina Department of Revenue.
Set a calendar reminder for April 15 each year to file your annual report ($203.00 fee).
Plan quarterly estimated income-tax payments based on your projected owner income.
Contact the North Carolina Department of Revenue at https://www.ncdor.gov/ for guidance on your specific tax obligations.

This is general information, not legal advice.