NFIB/North Carolina will continue to oppose additional taxes on small businesses and push for more tax deductions in this year's legislative session.
In 2013, Gov. Pat McCrory signed into law a sweeping tax reform bill, earning him the top grade in the Cato Institute’s 2014 Fiscal Policy Report Card on America’s Governors. Key points of the tax reform package included:
- Replacement of three individual income tax rates with a single rate of 5.8 percent, which is scheduled to fall to 5.75 percent in 2015
- Reduction of the corporate income tax rate from 6.9 to 6 percent, which is scheduled to drop to 5 percent in 2015
- Repeal of the estate tax
- Expansion of the sales tax base
Overall, this has been good news for North Carolina, which added 99,000 jobs in 2014, but there’s still room for improvement. Here are two key priorities that Gregg Thompson, NFIB’s North Carolina state director, has on his radar for 2015:
Prevention of Sales Tax on Services
The 2013 tax reform bill included an expansion of the sales tax base to include service contracts, admission charges to entertainment events (like live performances, movies, museums, cultural sites and similar attractions), electricity and piped natural gas, manufactured and modular homes, nutritional supplements sold by chiropractors and newspaper sales by street vendors, carriers and vending machines.
As higher sales taxes can hurt small business owners by discouraging consumers from using their services, NFIB/North Carolina will fight against any proposals to impose the collection of sales tax on additional services.
Tax Deduction for Small Businesses
In addition to opposing new taxes, NFIB/North Carolina will continue to push for additional tax reductions for small businesses. One particular priority, Thompson says, is a reinstatement of a small business tax deduction that, if passed, would prohibit tax on the first $50,000 of income for businesses grossing $250,000 or less. A similar bill was passed previously, but repealed in 2011.
