It seems as thought the Republican leadership is wrestling with dissension within the ranks. The Senate pulled 41 House bills from its calender and sent them back to the clerk thus putting the bills in limbo. The House, in turn, decided not to hold full sessions during the week of the 4th. This wrangling is a result of the leadership not being able to reach a consensus on the tax reform plan. Consequently, the Governor has signed a continuing resolution to keep the state government running for another 30 days at 95 percent of its current funding level.
House and Senate GOP leaders are working with the governor’s office to
find a compromise plan to overhaul the state’s tax system and cut income
tax rates. The two plans have distinct differences and the Governor has his own thoughts as to what the final bill should contain. The Governor wants a revenue neutral plan, the Senate wants to cut taxes more than the House, so the stand off.
With the House decision not to meet full sessions next week, several other pieces of legislation are "hanging in the wind". What happens to them remains to be seen. The Senate wants to end the session quickly but the House has decided it would allow those working on a comprise to do so without a lot of distractions during the week of the 4th. Hopefully, we see positive developments next week. Stay tuned.
Friday, June 28, 2013
Wednesday, June 19, 2013
Tax Bill on Senate Calendar
H998 - Tax Simplification and Reduction Act is on the Senate Calender for today. This will be the third reading. There have been several amendments tacked on to the bill and I would imagine there will be attempts to attach other during the Senate hearings. It then will go to conference to iron out any differences with the House.
On the House side H.274 - Taxpayers Bill of Rights will be up for discussion in the Finance Committee. This bill will limit increases in the general fund budget, reform the budget process, establish and emergency reserve trust fund and amend the North Carolina constitution to establish a general fund expenditure limit. Let's watch and see what kind of amendments will be offered during the discussion.
Another bill that deserves watching is S.81- Charlotte Regional Airport Authority. As you know this bill will transfer the ownership of the airport from the City of Charlotte to a state appointed authority. I understand that Charlotte is still trying to short circuit this bill. It bears watching.
On the House side H.274 - Taxpayers Bill of Rights will be up for discussion in the Finance Committee. This bill will limit increases in the general fund budget, reform the budget process, establish and emergency reserve trust fund and amend the North Carolina constitution to establish a general fund expenditure limit. Let's watch and see what kind of amendments will be offered during the discussion.
Another bill that deserves watching is S.81- Charlotte Regional Airport Authority. As you know this bill will transfer the ownership of the airport from the City of Charlotte to a state appointed authority. I understand that Charlotte is still trying to short circuit this bill. It bears watching.
Thursday, June 13, 2013
Budget Bill Passes Second Reading
The Senate passed H.998 (click here to read the bill) on second reading this afternoon. This is the House version of the tax reform bill. It does not tax any additional services and proposes a flat tax.on income over $15,000. It lowers the corporate income tax beginning in 2014 to 4%. In 2016 the corporate income tax will go to 2%. I was able to listen to some of the Senate floor debate and it was very heated at times. The third reading will be next Tuesday. I expect the bill will pass the Senate and go to a conference committee. This bill is much different than the bill proposed by Senator Bob Rucho, who submitted his resignation today as chairman of the Senate Finance Committee. Senator Rucho is very frustrated that the Senate leadership watered down his proposals. It is a very interesting time in Raleigh. Stay tuned for more.
Tuesday, June 4, 2013
Time is Getting Short
The members of the General Assembly want to have a budget in place by the end of June - sooner if possible. For that to happen a lot of bills must move through both houses and a lot of conference committees must meet. H.998 was introduced in to the house today and it has several porposals of which you should aware. It sets the personal income tax rate at a flat 5.9%. It increases the standard deductions for everyone. It also does away with several other deductions and decouples from federal accelerated depreciation and expensing.
It lowers the corporate income tax to 6.9% beginning in 2014 and further decreased the corporate income tax to 5.4% by 2018.
A privilege tax of 4.75% is applied to all tickets sold for an entertainment event (concert, movie, museum, exhibit, athletic contest, etc.) as well as to service contracts.
If you want to get a feel for the proposal here is the link. H.998. I told the Kings Mountain Advisory Council today that things would move very fast in the state legislature. Buckle your seat belts and hang on. We are in a race to the finish. Let's see how it ends.
It lowers the corporate income tax to 6.9% beginning in 2014 and further decreased the corporate income tax to 5.4% by 2018.
A privilege tax of 4.75% is applied to all tickets sold for an entertainment event (concert, movie, museum, exhibit, athletic contest, etc.) as well as to service contracts.
If you want to get a feel for the proposal here is the link. H.998. I told the Kings Mountain Advisory Council today that things would move very fast in the state legislature. Buckle your seat belts and hang on. We are in a race to the finish. Let's see how it ends.
Monday, May 13, 2013
The Pace Quickens
I have written several times about the speed at which bills were being passed in this session of the General Assembly. Well, that's about to change. It's going to get more hectic this week as the General Assembly approaches the crossover date. What is crossover? The House and Senate rules say that bills that don’t raise or spend
money or propose amendments to the state constitution must pass either
the House or Senate by Thursday to be considered during the session. So hang on to you hats and watch the legislation very closely as this week will be full of fun and games as legislators make sure their pet legislation survives crossover and is heard during this session.
No word on when Senator Berger's tax reform proposals are going to see the light of day in the form of a bill. The details keep coming out in dribbles so stay alert for additional information.
Here's and interesting bill that has hit the floor. Rep. Marcus Brandon, a High Point Democrat has introduced H.994, a bill that allows parents to spend taxpayer money on K-12 private school tuition. As filed, the bill would offer vouchers worth $4,200 a year: however, there have been some revisions that will have 50 percent of the money each year reserved for children from families at 185 percent of the federal poverty level or below. That’s the level at which kids in a family would qualify for free or reduced lunch in public schools. Anyone making over $45,000 per year would not be eligible. It is on the calendar of the House Education Committee for Tuesday.
Another bill, H.274 “Taxpayer Bill of Rights,” aka TABOR, which would have voters decide whether to limit government spending in the state Constitution is scheduled to be heard in the Finance committee this week. The measure would establish a General Fund spending limit based on the previous year’s limit increased by a formula that takes into account inflation and population increases. The governor and General Assembly then could not spend more than that limit without a two-thirds vote of the Legislature. There is some concern that passage of this bill would hurt the State's credit rating.
There are a whole hosts of pending legislation that you need to watch. I'll try to keep you as up to date as possible. Check everyday for further information.
No word on when Senator Berger's tax reform proposals are going to see the light of day in the form of a bill. The details keep coming out in dribbles so stay alert for additional information.
Here's and interesting bill that has hit the floor. Rep. Marcus Brandon, a High Point Democrat has introduced H.994, a bill that allows parents to spend taxpayer money on K-12 private school tuition. As filed, the bill would offer vouchers worth $4,200 a year: however, there have been some revisions that will have 50 percent of the money each year reserved for children from families at 185 percent of the federal poverty level or below. That’s the level at which kids in a family would qualify for free or reduced lunch in public schools. Anyone making over $45,000 per year would not be eligible. It is on the calendar of the House Education Committee for Tuesday.
Another bill, H.274 “Taxpayer Bill of Rights,” aka TABOR, which would have voters decide whether to limit government spending in the state Constitution is scheduled to be heard in the Finance committee this week. The measure would establish a General Fund spending limit based on the previous year’s limit increased by a formula that takes into account inflation and population increases. The governor and General Assembly then could not spend more than that limit without a two-thirds vote of the Legislature. There is some concern that passage of this bill would hurt the State's credit rating.
There are a whole hosts of pending legislation that you need to watch. I'll try to keep you as up to date as possible. Check everyday for further information.
Tuesday, May 7, 2013
Sales Tax Collections
I have been focusing on legislation at the state level in the past few weeks but yesterday a bill (S.336) in the U.S. Congress caught my attention. The Senate passed a bill (Marketplace Fairness Act of 2013) that empowers states to collect sales taxes from Internet purchases. This has long been a sore spot for local business that compete against large retailers that utilize the internet to for their sales platform. Amazon and Ebay are two of the larger ones. However, any business that has an on-line store avoids collecting sales tax unless they have a "presence" within the state.
The bill passed 69 to 27 with by-partisan support but faces an uphill battle in the House. Mnay oppoents in the House see this as a tax increase. The proponents say it's just collecting taxes that are already owed and provides a method for collecting those taxes. Many governors - Republicans and Democrats - have been lobbying the federal government for years for the authority to collect sales taxes from online sales. States lost a total of $23 billion last year because they couldn't collect taxes on out-of-state sales, according to a study done for the National Conference of State Legislatures.
Supporters say the bill makes it relatively easy for Internet retailers to comply. States must provide free computer software to help retailers calculate sales taxes, based on where shoppers live. States must also establish a single entity to receive Internet sales tax revenue, so retailers don't have to send it to individual counties or cities.
Opponents worry the bill would give states too much power to reach across state lines to enforce their tax laws. States could audit out-of-state businesses, impose liens on their property and, ultimately, sue them in state court.
This bill has far reaching consequences. Watch this one closely.
The bill passed 69 to 27 with by-partisan support but faces an uphill battle in the House. Mnay oppoents in the House see this as a tax increase. The proponents say it's just collecting taxes that are already owed and provides a method for collecting those taxes. Many governors - Republicans and Democrats - have been lobbying the federal government for years for the authority to collect sales taxes from online sales. States lost a total of $23 billion last year because they couldn't collect taxes on out-of-state sales, according to a study done for the National Conference of State Legislatures.
Supporters say the bill makes it relatively easy for Internet retailers to comply. States must provide free computer software to help retailers calculate sales taxes, based on where shoppers live. States must also establish a single entity to receive Internet sales tax revenue, so retailers don't have to send it to individual counties or cities.
Opponents worry the bill would give states too much power to reach across state lines to enforce their tax laws. States could audit out-of-state businesses, impose liens on their property and, ultimately, sue them in state court.
This bill has far reaching consequences. Watch this one closely.
Monday, April 29, 2013
Rural NC - Taking a Beating
In one of my past posts, I quoted our Legislative Liaison in Raleigh as saying that this session of the General Assembly will boil down to a struggle between rural North Carolina and the metropolitan areas.
HB298. If passed this bill would have ended the state’s 6-year-old policy of subsidizing solar farms and other forms of renewable energy and would have placed over 300 Cleveland County jobs in jeopardy. Schletter, a German firm that recently announced a project in Cleveland County that will create 300 jobs, made the move to North Carolina based upon the incentives offered by NC Renewable Energy and Efficiency Portfolio Standards. HB298 would have ended those incentives, thus killing Schletter's project. Our thanks to Rep.Moore for preserving those jobs.
HB298. If passed this bill would have ended the state’s 6-year-old policy of subsidizing solar farms and other forms of renewable energy and would have placed over 300 Cleveland County jobs in jeopardy. Schletter, a German firm that recently announced a project in Cleveland County that will create 300 jobs, made the move to North Carolina based upon the incentives offered by NC Renewable Energy and Efficiency Portfolio Standards. HB298 would have ended those incentives, thus killing Schletter's project. Our thanks to Rep.Moore for preserving those jobs.
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