The proposal will move North Carolina from 44th in total tax burden nationwide to 17th, Tillis said.
The measure replaces the three-tier personal income tax system with a flat tax of 5.8 percent in 2014, which drops to 5.75 percent in subsequent years. Standard deductions increase to $7,500 for single filers, $12,000 for heads of households and $15,000 for married couples.
Deductions for mortgage interest on first homes, something that had been a point of contention between the House and the Senate, will be capped at $20,000. Charitable contributions will remain fully deductible, and the state will continue to offer a child tax credit and exempt Social Security income from state taxes.
The corporate tax rate will be cut 29 percent in two years, from 6.9 percent now to 5 percent by 2015. If North Carolina meets revenue targets in the coming years, officials said, the corporate rate will drop even further, to 4 percent in 2016 and 3 percent in 2017.
The deal also repeals the estate tax, caps the state gas tax and preserves the sale tax refund for nonprofit groups.