Small business owners across the country welcomed the passage of the Tax Cuts and Jobs Act of 2017, which President Trump signed into law in December 2017. In addition to providing billions of dollars in tax cuts to small businesses, it is also expected to increase state taxes for some people because it reduces or eliminates some of the deductions that have been used for state taxes in the past.
According to a recent Associated Press report, North Carolina’s tax revenue could be in for a “modest” increase over time as a result of the new federal tax law. If state legislators formally align the state’s tax laws with the federal rules on deductions and expenses, among other provisions, the state would see $31 million more in tax collections during the fiscal year ending June 19. By mid-2022, the number could be up to $95 million per year.
Most of the increase, the AP reports, would be attributed to increased corporate revenues. It’s unclear now how legislators will respond, and the General Assembly reconvenes May 16.
