- Tombs offered for sale or rent would be exempt from property tax.
- The excise duties on cigars are to be limited to 30 cents per cigar.
- Millions would be spent on museums in Counties Cumberland and Onslow.
Do the North Carolinians want a tax cut for cemetery owners and cigar shops? Do you want tax increases for other cigar sellers and for some car rental companies that were previously tax free?
What about removing corporate income tax while workers would still have to pay 3.99%? And do voters want the state to allocate nearly $ 765 million to special projects and groups such as museums, water and sewer systems, dams, airport facilities and private nonprofits?
These are some of the things the Republicans, who control the state’s Senate, said they would be good for the state of North Carolina when they voted in late June to add $ 25.7 billion of public money over the next 12 Months and $ 26.6 billion over the next 12 months.
The Senate sent the budget to the GOP-controlled State House, which will review the Senate plan and develop its own vision for how the government should spend taxpayers’ money over the next two years.
In addition to allocations for public education, courts, public safety, parks and recreation, and other typical government spending, here are some notable or interesting things about the Senate’s proposed budget:
Income tax cuts
► There are no corporate taxes – The GOP’s long plan to abolish corporate income tax would be phased out through 2028. Companies have been paying 2.5% since 2019. The Senate wants to lower the corporate tax rate to 2% by 2024 and lower it to 0%. in 2028.
► Individual income taxes – While corporations would see their income taxes abolished at some point, their employees would still have to pay. The income tax rate of now 5.25% would be 4.99% on January 1st and gradually decrease to 3.99% in 2026.
Individuals would also reduce their tax bills because the standard allowance would be increased, as would the amount of the child allowance. In addition, more taxpayers would be entitled to the child allowance, according to a report by the legislative staff.
Cigars, cemeteries, rental cars and vaccines
► Tax cut on cigars – North Carolina has a wholesale excise tax of 12.8% on cigars. If a box of 20 cigars wholesale for $ 141 and retail for $ 282, the cigars are subject to an excise tax of $ 18.05 (just over 90 cents per cigar). The Senate budget would cap cigar excise tax at 30 cents per cigar, so the excise tax on that $ 282 box would be $ 6 instead of $ 18.05.
► Increase in the cigar tax – Out-of-state cigar sellers who ship cigars to customers in North Carolina have not paid North Carolina cigar tax. The Senate budget would let them pay.
► Cemetery taxes lowered – Commercial properties for sale for use as burial sites would be exempt from paying local property taxes under the Senate budget. Owners of other commercial properties for sale would still have to pay. And if the cemetery owners end up using it for anything other than burial grounds, they would have to pay taxes for five years.
► New tax for car sharing rentals – Just as services like Airbnb and VRBO have made it easy for people to rent out their homes, services like Turo have emerged in recent years to help car owners rent their vehicles to other drivers who want to rent on short notice. This is known as peer-to-peer car sharing or peer-to-peer vehicle sharing.
Traditional car rental companies such as Hertz, Avis and Enterprise had to levy taxes ranging from 9.5% to 16% on their sales (depending on local taxes), according to a legal report, while peer-to-peer rentals are taxable were. free.
The Senate budget collects local sales taxes on peer-to-peer car sharing rentals. Local sales tax varies from district to district and is between 6.75% and 7.50%.
► Vaccination taxes lowered North Carolina law requires private medical facilities and medical practices to pay local property taxes on their vaccine holdings. The NC Senate’s proposed budget would exempt their vaccines from property tax.
Pet projects
According to an analysis by The Insider, a political newsletter that closely covers the state capital, the Senate budget has nearly $ 765 million earmarked for allocations to specific projects across the state.
For example, the largest single item in the budget for special projects is $ 31 million for the repair and renovation of the Hoke County’s courthouse in Raeford, a town near Fayetteville. The Hoke courthouse and prison are in such poor condition that a judge commissioned a grand jury to investigate in 2019. The grand jury concluded that the county needed to replace its courthouse and prison.
Read all about it:Judge asks Hoke County to replace the rundown courthouse
Some other articles:
► $ 15 million this year for Montreat College, a private college about 30 miles east of Asheville, for cybersecurity programs. And it would get another $ 15 million next year.
► $ 10.5 million to build a parking deck at the Mountain Area Health Education Center in Asheville.
► Gastonia, west of Charlotte, would receive $ 10 million for water and sanitation infrastructure, while Shelby would receive $ 7.4 million. And Burlington, between Greensboro and Raleigh, would get $ 15.9 million.
► Projects for the Fayetteville area include $ 5 million for the renovation of the privately owned Cape Fear Regional Theater, $ 3 million for updates and additions to the US Army Airborne & Special Operations Museum, and $ 10 million for a new fire training center at Fayetteville Technical Community College, $ 15 million for a medical education and research center in the Cape Fear Valley Health System, and $ 2.5 million for Martin Luther King Jr. Park.
► $ 12.5 million to build an aircraft hangar for Lenoir Community College, which provides aerospace education at Kinston Airport. In Onslow County, on the coast, $ 13 million would be used to build the Carolina Museum of the Marine near Marine Corps Base Camp Lejeune. The Naval Museum would receive an additional $ 13 million in the second year of the budget.
Previous effort:Veto in 2019 prevented the Marines Museum from receiving $ 26 million
The legislature is too late
The state budget is scheduled to come into force on July 1 for the start of the new budget year and the beginning of the 2021-2023 biennium. It’s late.
The legislature has fallen behind this year because the Republicans who control the Senate and Republicans who control the House of Representatives have been slow in deciding how much to spend over the next two years. They announced an agreement on June 8th. That left little time until June 30 to figure out how to spend nearly $ 52 billion over the next two years.
Unlike the federal government, the North Carolina government is in no danger of being shut down if its leaders don’t approve the budget in a timely manner. Instead, the state continues to use the previously approved spending plan.
In 2019 and 2020, the legislature and governor failed to adopt a comprehensive budget for the 2019-2021 biennium. The governor vetoed the legislature-approved budget and no compromise was ever reached on issues such as public health care, teacher increases and tax cuts.
However, some decisions had to be made to keep the state running smoothly in the future and then in response to the 2020 COVID pandemic. Instead of a single budget, a number of smaller spending plans, “mini-budgets”, have been adopted.
What’s next?
The State House has received the Senate budget and is writing an alternative proposal.
Then the House and Senate budget drafters will come up with a compromise and send it to the governor.
Governor Roy Cooper, a Democrat, will either sign the budget, make it law without his signature, or veto it. If his Democrats in the Legislature maintain a veto from Cooper, his veto will be upheld and he and the legislature will either work out a compromise or allow the state two more years without a full spending plan.
North Carolina Senior Reporter Paul Woolverton can be reached at pwoolverton@gannett.com and 910-261-4710.