Well I am happy to report that I have survived crossover week at the NCGA. The week proved hectic with long sessions and bills coming from all directions. However, the most interesting action to the Chamber came with the House’s tax reform bill (
HB998).
The Senate announced their tax reform package last week but have still not filed an actual bill. Thus, the key ideas of Senate tax reform are known but not yet in official legislation. As proposed, the Senate and House plans have many differences. The Senate has proposed a much more comprehensive tax reform package than the House. Some of the differences are listed below.
Sales Tax
The current sales tax in NC is at 6.75%. The Senate plan would lower it to 6.5% and the House plan to 6.65%. The other key difference with the sales tax is the taxation of services. The Senate plan would tax an additional 160 services provided in NC while the House plan only taxes services that are tangible.
Personal Income
The current income tax in NC is 7.75%. The House plan would create a flat personal income tax rate at 5.9% while the Senate plan is much more complicated. However, the highest income tax rate would be 4.5%.
Corporate Tax
The current corporate tax rate in NC is 6.9%. The Senate tax plan would take that down to 6% and the House plan takes it to 6.75%.
Estate Tax
Both plans eliminate the estate tax.
The Chamber will keep an eye on this legislation as it is debated and changed. The Chamber will also be anticipating the Senate’s proposed budget, which is scheduled to be delivered Sunday night.
Have a great weekend!