There’s a way to go, but as CJ’s Barry Smith reported here and here, the Senate made major strides over the past two three days toward the most significant revisions in decades to the North Carolina tax code. The text of House Bill 998, which will return to the House next week, is here.
The highlights:
• The personal income tax rate would drop to 5.75 percent. It now ranges from 6 percent to 7.75 percent, depending on income.
• Personal tax filers could take unlimited deductions for charitable contributions; deductions for mortgage interest and property tax on real estate would be capped at $15,000. Other deductions would disappear.
• The state sales tax would expand to cover some repair and maintenance services.
• The corporate income tax would be phased out completely by 2018.
• Large nonprofits (primarily hospitals) would have their rebates on sales tax payments reduced.
The final vote was 29-14, with Republicans Fletcher Hartsell and Bob Rucho joining 12 Democrats on the losing side.
House Speaker Thom Tillis, R-Mecklenburg, has acknowledged the two chambers are getting closer to an agreement, but even if the House doesn’t adopt the Senate plan fully, each chamber will appoint a conference committee to work out the difference.
Gov. Pat McCrory hasn’t said what he thinks about the latest deal, but at this point, a veto would be a shock.
Meantime, this morning John Hood suggested a safety valve that might ease concerns from all the parties about the fiscal soundness of this latest iteration.
Happy Independence Day!
