summary
Introduced
03/19/2025
03/19/2025
In Committee
03/20/2025
03/20/2025
Crossed Over
Passed
Dead
Introduced Session
2025-2026 Session
Bill Summary
AN ACT TO MODIFY THE INCOME TAX RATE REDUCTION TRIGGER. Whereas, Hurricane Helene was an extremely strong Category 4 hurricane with maximum sustained winds of 140 miles per hour that reached North Carolina on September 27, 2024; and Whereas, Hurricane Helene caused widespread heavy rainfall in excess of 30 inches in some areas, record flooding, and significant loss of human life and property in North Carolina; and Whereas, the Office of State Budget and Management estimated that, as of December 13, 2024, Hurricane Helene caused $59.6 billion in damage to the State; and Whereas, Hurricane Florence was one of the strongest storms to form in the Atlantic Ocean in the history of North Carolina, reaching wind speeds of up to 140 miles per hour, covering 500 miles, and making landfall on September 14, 2018; and Whereas, Hurricane Florence caused heavy rainfall, record flooding, high storm surge, and dozens of deaths in the State; and Whereas, the people of Eastern North Carolina are still recovering from the devastation caused by Hurricane Florence; Now, therefore,
AI Summary
This bill modifies North Carolina's income tax rate reduction mechanism, establishing a fixed 4.25% income tax rate starting in 2025 and reintroducing a revenue-based trigger for potential future rate reductions. The bill removes the previous automatic annual tax rate reductions and replaces them with a new trigger mechanism that allows for tax rate reductions if General Fund revenue exceeds specific threshold amounts in designated fiscal years. Under this mechanism, if total General Fund revenue surpasses the specified trigger amount for a given fiscal year, the tax rate can be reduced by up to 0.5 percentage points in the subsequent year, with a floor of 2.49%. The trigger amounts are set progressively over several fiscal years, ranging from $33,042,000,000 in FY 2025-2026 to $39,000,000,000 in FY 2032-2033. The revenue threshold will be determined by the final accounting of total General Fund Reverting Net Tax and Non-Tax Revenues, as reported by the Office of State Controller in August following each fiscal year. The bill becomes effective immediately upon becoming law, with tax rate changes applying to taxable years beginning on or after January 1, 2025.
Committee Categories
Government Affairs
Sponsors (7)
Laura Budd (D)*,
Deb Butler (D)*,
Julia Greenfield (D)*,
Pricey Harrison (D)*,
Eric Ager (D),
Maria Cervania (D),
Renée Price (D),
Last Action
Ref To Com On Rules, Calendar, and Operations of the House (on 03/20/2025)
Official Document
bill text
bill summary
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bill summary
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bill summary
| Document Type | Source Location |
|---|---|
| State Bill Page | https://www.ncleg.gov/BillLookUp/2025/H459 |
| BillText | https://www.ncleg.gov/Sessions/2025/Bills/House/PDF/H459v1.pdf |
| BillText | https://www.ncleg.gov/Sessions/2025/Bills/House/PDF/H459v0.pdf |
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