RALEIGH, NC (AP) – Legislation that would give corporations and the unemployed hundreds of millions of dollars in income tax breaks in the state of North Carolina received final approval from the House Thursday.
The bill, which was almost unanimously backed, would allow businesses to deduct from their taxable income expenses that they had paid with proceeds from federal paycheck protection program loans granted to them and later given. The measure would also exempt the first $ 10,200 of unemployment benefits applicants received in 2020 from income tax.
Both of these provisions would align North Carolina tax law with federal tax regulations for IRS returns while also providing financial assistance during the COVID-19 pandemic.
The future of the bill is unclear in the Senate, where Republicans disagree on whether to give businesses the extra tax break or instead support them in other ways.
Senate Chairman Phil Berger said Thursday it could be a few weeks before the measure was considered. The deadline for individual income tax is May 17th. Many business owners report business income through their individual tax returns.
The provisions for PPP loans, which cover both 2020 and 2021, would mean the treasury would bring in $ 600 million less revenue by mid-2023. It’s unclear whether the federal coronavirus money earmarked for North Carolina could cover these costs.
A dispute within the House Republican Caucus over a narrower version of the current measure resulted in a senior House Finance Committee chair being removed from the panel this week by Spokesman Tim Moore.
Former committee co-chair Julia Howard was the only member of the House of Representatives to vote against the bill on Thursday.