At4:30pmthis afternoon, the NC
Senate took a final vote on the "Tax Simplification and Reduction
Act" (HB 998). This historic tax reform plan will make North
Carolina's tax code friendlier for business, jumping the Tar Heel State
from 44th to 17th in the Tax Foundation's State Business Tax Climate Index
and will keep more money in taxpayer pockets. This legislation is on
it's way to Governor McCrory, who has pledged to sign it. Please read
more information about the plan below.
If you have ideas, questions or concerns, PLEASE contact me via email
atNorman.Sanderson@ncleg.netor by phone(919) 733-5706(Raleigh). Your input is needed on
the decisions being made. I appreciate all those who have called with
Tax Reform for North Carolina
In a historic
move, the NC Senate this afternoon signed legislation to update the tax
code in North Carolina, creating a more business-friendly environment,
keeping more money in taxpayer pockets. Our tax code had not been updated
since the 1930s, and this tax reform bill makes NC much more competitive
with neighboring state for job creation.
We are pleased
to report that this tax plan received support from the NC Association of
CPAs, Americans for Prosperity, and Civitas Institute. The national
nonpartisan group, Americans for Tax Reform, called our plan the most
significant one likely to be approved in 2013 among other states.
Personal Income Tax:
simplifies the 3-tiered state personal income tax from the current maximum
rate of 7.75% and minimum rate of 6% to 5.8% in 2014 and 5.75% in 2015.
standard deduction for all taxpayers, applied to the:
o First $15,000 of income for those married filing jointly
o First $12,000 of income for heads of household
o First $7,500 of income for single filers;
*Retains the state child tax credit and increases it for families making
less than $40,000;
*Offers a $20,000 combined maximum deduction for mortgage interest and
*Makes charitable contributions fully deductible;
*Protects all Social Security income from state taxes.
Corporate Income Tax:
*Reduces the corporate income tax from 6.9% to 6% in 2014 and then to 5% in
a 29% rate reduction.
*If the state meets revenue targets (i.e. if tax revenue grows due to a
growing economy), the corporate income tax will drop to 4% in 2016 and 3%