Billion Dollar Tax Cut Advances

Date: April 19, 2017

Earlier this month, the Senate approved SB 325, which will provide a billion dollars in tax relief to North Carolina if it passes the house and is signed into law.

Under SB 325, the “Billion Dollar Middle Class Tax Cut,” the personal income tax rate will drop from 5.499 percent to 5.35 percent. Both individuals and married couples filing jointly would see the standard deduction increase as well: to $10,000 and $20,000, respectively, from $8,750 and $17,500. Corporate tax rates would also decrease from 3 percent to 2.75 percent in 2018 and again to 2.5 percent in 2019, and the favorable tax status enjoyed by manufacturing companies that invest and hire workers in North Carolina would also be extended to service-based businesses.

Meanwhile, more families with children would be eligible for the child tax credit, including those earning less than $120,000, instead of less than $100,000. Homeowners could also deduct $22,000 in mortgage interest and property taxes, up from $20,000, if not using the standard deduction.

The News & Observer reported a news release statement from Senate leader Phil Berger: “Our previous tax cuts led to a booming North Carolina economy and helped generate 500,000 new jobs, and we hope Gov. Cooper will enthusiastically support this billion dollar middle class tax cut.”

NFIB/NC supports the measure for its positive impact on small business owners and other North Carolinians. At this writing, the measure was headed to the House, where lawmakers have proposed tax cuts that aren’t as broad.

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