The governor's office said the change simplifies and reduces the personal income tax rate from the previous maximum rate of 7.75 percent and minimum rate of 6 percent to 5.8 percent in 2014 and 5.75 percent in 2015.
The corporate tax rate was also reduced.
"Many North Carolinians are seeing more money in their paychecks thanks to the historic tax reform we crafted and signed into law," said Governor McCrory. "Not only does this help working families across our state, it also puts North Carolina in a much more competitive position to attract new businesses."
The bill also repealed North Carolina's estate tax and puts a cap on the gas tax.
But some progressives say the tax law change puts an extra burden on lower-income families - especially the provision that eliminates the state's earned income tax credit.
"The earned income tax credit is the difference between a family being able to take their child to the dentist, or buy new shoes, or even something as basic or fundamental as housing, transportation- being able to pay for utilities," said Melea Rose-Waters with the group NC MomsRising.
Despite the criticism of the law, Governor McCrory has called in one of the signature achievements from last year's legislative session.