[co-authors: Katelyn Kingsbury and Drew Moretz, Government Relations Advisors]
This week the Senate was considering a law on grants and taxes and a law to encourage unemployed workers to return to work, while the House passed a broadband law.
Senate grant and tax law
Two Senate committees passed a bill this week (H 334) that introduces a number of changes to state law.
- Reduces the state income tax rate from 5.25% to 4.99%,
- Increases the standard personal income tax allowance to match the federal standard allowance for 2022.
- Increases children’s personal income tax withholding by $ 500 and increases eligibility for the withholding.
- Eliminates state corporation tax over a five-year period from tax year 2024,
- Eliminates North Carolina covered businesses real estate base from franchise tax calculation.
- Adds two years to the time it takes to complete eligible mill rehabilitation tax credit projects.
- Extends existing state excise tax of 12.8% on other tobacco products to include all cigars supplied to North Carolina residents by vendors outside of the state. There is also a limit of 30 ¢ per cigar on all cigar sales, whether they are sold in person or online.
- Applies existing general sales and use taxes to short-term car rentals through a peer-to-peer broker and credits these revenues to the Highway Fund.
- Reduces local property tax revenues by exempting vaccines from property tax and reserving commercial property for funeral purposes.
The bill also provides $ 1 billion in federal funding for grants to North Carolina companies that have previously received financial assistance from certain state or federal COVID programs. The maximum grant amount would be $ 18,750. This approach differs from an earlier version of H 334, which was passed by Parliament, which would have exempted the cost of a company that received a federal payment protection program loan from state income tax.
The bill will next be negotiated in the Senate Rules Committee.
The House passed a bill (H 947) this week providing federal funding of $ 750 million to expand broadband access in North Carolina. The existing GREAT grant program, which grants private providers grants to promote broadband development in unserved areas, would receive US $ 350 million. The bill also provides $ 400 million for a new Competing Access to Broadband (CAB) program in which counties work with the Department of Information Technology’s Broadband Infrastructure Bureau to identify areas for program funding. Under the direction of the ministry, a district could initiate a tender process to select a broadband service provider for the expansion of the broadband infrastructure in underserved and underserved areas. The county and state would each be responsible for a portion of the project cost if funds from the American Rescue Plan Act (ARPA) were used.
Re-employment of the unemployed
Two Senate committees passed a bill this week (H 128) that provides bonuses to encourage unemployed people to get back into employment, oblige unemployed applicants to meet job search requirements, and oblige those people to respond to inquiries from employers answer, e.g. Governor Roy Cooper recently enacted Executive Order 216 to reintroduce certain job search requirements for government jobless applicants. The bill will next be examined by the entire Senate.