Tax Reform

State Senate chamber
Dave DeWitt / WUNC

State lawmakers in the Senate have tentatively approved a far-ranging tax bill that would end the ability of municipalities to levy special taxes on businesses.

The Senate version of the bill would end what's called the privilege tax. It brings in $62 million a year to municipalities across the state.

Business leaders have long complained that the taxes vary widely and are not fairly levied. Republican Senator Tommy Tucker, who's a small business owner, is in favor of the bill.

Gov. Pat McCrory
NC Governor's Office

Governor Pat McCrory held a press conference today to celebrate a new report suggesting the state's economy is benefiting from tax cuts enacted last year.

The conservative American Legislative Exchange Council's "Rich States, Poor States" report ranks North Carolina sixth in the nation for its economic outlook.

McCrory says lowering corporate income taxes in particular has encouraged companies to move to the state.

Manufactured Home
Royal Homes in Raleigh

Mobile and modular homes have traditionally been a top choice for lower-income home buyers.  But the New Year has brought higher taxes for these properties.

The sales tax will jump about two-fold for those buying a modular home.   Sonny Bannister is president of Royal Homes in Raleigh.

"We've been aware of the pending increase for about 90 days and we've been warning our customers of the potential of an increase since that time," said Bannister.

Small businesses in Brightleaf Square shopping center.
Laura Candler

It depends on what you consider good for business. If you head to the North Carolina Department of Commerce’s website, you can see many of the positive rankings North Carolina has received from business media outlets: No. 1 Best Business Climate from Site Selection in 2012, No. 4 Best State for Business by Forbes in 2012, No. 4 America’s Top States for Business by CNBC in 2012.  Most of the organizations doing the ranking look at a similar group of factors, although they each give those factors different weight in their decisions.

North Carolina Legislature passes a tax reform bill.
W Edward Callis III

This week the General Assembly passed a tax reform bill that sets the stage for the state’s budget. The bill, while sweeping, wasn’t as broad as GOP lawmakers originally wanted. A budget agreement is expected to be reached today with details emerging over the weekend.

A customer checks out at Southern States Nursery in Carrboro, business transaction.
Laura Candler

North Carolina's annual sales tax holiday will end if a bill to overhaul the tax code becomes law.  A provision in the proposal eliminates the sales tax-free weekend that usually happens in early August, starting next year.

North Carolina legislative building
Wikimedia Commons

The North Carolina General Assembly finally pushed through its tax reform bill, though it’s not nearly as bold as originally proposed. Both personal and corporate income taxes will go down.

N.C. General Assembly, State Legislature
Dave DeWitt / WUNC

State lawmakers have formally approved a tax reform package that would lower the personal and corporate income tax rates and end the estate tax.

Republican leaders and Governor McCrory have hailed the bill as one that will help bring more jobs to the state. Democrats say the tax cuts will cause great damage to education and health care.

GOP Faithful Rally To Back NC's Direction

Jul 17, 2013
North Carolina Legislature passes a tax reform bill.
W Edward Callis III

RALEIGH, N.C. - About 200 supporters expressed their appreciation for North Carolina Republicans efforts to cut taxes, require identification before voting and make getting abortions more difficult.

North Carolina legislative building
Wikimedia Commons

A tax plan agreed upon by legislative leaders and the governor has tentatively passed the state Senate, just hours after tentatively passing the House.

The plan would reduce personal and corporate income tax rates, but, unlike an earlier proposal, it does not significantly broaden the sales tax base.

NC General Assembly, tax reform, Governor McCrory
Jessica Jones

Governor Pat McCrory and leaders of the state House and Senate have come to a long-awaited agreement on what they say is fiscally responsible tax reform.

The plan would replace the state’s tiered personal income tax rate with a flat 5.8 percent in 2014, and the corporate tax rate would fall as well. The sales tax would be broadened only slightly.

State Senate chamber
Dave DeWitt / WUNC

Lawmakers in the state Senate have tentatively approved a bill that would cut personal income tax rates and phase out the corporate income tax.

It would set the personal income tax rate at 5.75 percent, and it would cap the gas tax rate for two years.

NC Legislative building
NC General Assembly

State lawmakers say they're nearing consensus on tax reform. Speaker of the House Thom Tillis says the House and the Senate are close to an agreement.

Potential tax code changes could change the level of funding state budget writers would be able to spend. But there's not much time left before the fiscal year ends for lawmakers to agree on a state budget plan.

Tillis says legislators plan to take that up very soon.

State Senator Phil Berger
Dave DeWitt

State legislators have delayed a final vote on a bill that seeks to change North Carolina's tax code.

The North Carolina Legislative Building
Dave Crosby / flickr

Rucho resigned his co-chairmanship of the finance committee in protest of Berger's plan, which passed the Senate Thursday.

Regardless of what ultimately passes, Jessica Jones, WUNC Capitol Bureau Chief, said on the State of Things that the implications could be far reaching.

NC General Assembly, Senator Rucho
NC General Assembly

The co-chair of the Senate Finance Committee has resigned from that group to protest changes to his legislative body's tax reform plan.

Senator Bob Rucho submitted his resignation letter to Senate President Phil Berger earlier this week. Rucho was the main architect of a Senate tax reform proposal that would have expanded the sales tax while lowering personal and corporate income tax rates.

But Berger put forth an alternate plan that would repeal corporate taxes without expanding the sales tax base as extensively. Rucho says he was disappointed by the move.

State Senate chamber
Dave DeWitt / WUNC

Benjamin Franklin famously said, "In this world nothing can be said to be certain, except death and taxes."  But in the North Carolina legislature, three competing plans seek to reform the tax code, and the future of these plans is all but certain.  Two bills are waiting in the Senate Finance Committee. One bill passed the House yesterday and will move to the Senate.

N.C. General Assembly, State Legislature
Dave DeWitt / WUNC

  The General Assembly is in its last few weeks of budget discussions, with tax overhauls in mind.  Three proposals are still on the table.  All of them cut the corporate and individual income tax rates while expanding the sales tax to cover more services. 

Alexandra Sirota of the liberal North Carolina Justice Center says that disproportionately benefits the wealthy.

North Carolina Legislature passes a tax reform bill.
W Edward Callis III

A sweeping reform of the tax code in North Carolina is poised to move to the Senate. The plan would reduce personal and corporate income tax while expanding the reach of sales tax.

State Senate chamber
Dave DeWitt / WUNC

State lawmakers have formally laid out three competing plans to reform North Carolina's tax code.

They've filed three bills that would all lower sales and income tax rates. The measures would all expand the sales tax base by broadening it to include more services. But each plan features different details.