Beginning Jan. 1, 2020, North Carolina taxpayers will receive another bit of relief.

Continuing a multi-year trend of lowering the tax burden on working North Carolinians, a 2019 bill will increase the standard deduction for married filers by 7.5%, from $20,000 to $21,500, and single filers from $10,000 to $10,750.

The standard deduction reduces the taxpayer’s taxable income for the year, lowering the effective tax rate for payers – and increasing the number of low-income workers that will have zero state tax liability.

The move is projected to save taxpayers roughly $180 million annually.

The bill also adjusts how multi-state corporations calculate their taxable income, to encourage more investment and job growth in the state.

The new legislation, however, also enacts a new tax on “marketplace facilitators,” like Amazon sellers, to better capture more sales taxes from online retailers.

As observed by the Tax Foundation, North Carolina is one of five states to make notable changes to their tax base in 2020. Three states (Massachusetts, Arkansas, and Tennessee) will see lowered income tax rates in the new year.

To learn more about North Carolina’s history of state taxation, check out Civitas’ Public Policy Series.