More tax cuts are coming for North Carolinians in 2019, thanks to the budget compromise passed by the lawmakers. Although Gov. Roy Cooper vetoed the budget plan, the Legislature overrode his veto, passing the bill into law just days before July 1, the start of the new fiscal year.
The personal income tax rate will drop from 5.499 percent to 5.25 percent, and the corporate income tax rate will decrease from 3 percent to 2.5 percent. The standard deduction for married couples filing jointly will also rise to $20,000 from $17,500.
Additionally, the budget creates a new jobs incentive program to attract “transformative projects” that bring jobs and investment to the state. House Speaker Tim Moore says North Carolina is close to landing such a project—a company that would create over 8,000 jobs, The News & Observer reported.
Gov. Cooper vetoed the budget because he believed the income tax cuts included would prevent the state from being able to fund the teacher salary increases that have been promised. However, Rep. Nelson Dollar, the House’s senior budget writer, said the budget follows in the trend that has been established to keep the state moving forward.
So far, the strategy seems to be working. Two recent reports ranked North Carolina one of the top states to start a business. FitSmallBusiness named it no. 1, thanks to its labor market, good quality of life, and low taxes. WalletHub, meanwhile, ranked North Carolina 12th in the nation for its business environment (27th rank), access to resources (16th), and business costs (sixth).