Local News

Lawmakers Consider Tax Break for Troops

Posted March 21, 2007 4:41 p.m. EDT
Updated March 21, 2007 5:58 p.m. EDT

— Active-duty troops would be relieved of paying state income tax under a measure being considered in the General Assembly, but some lawmakers question whether the state can afford the tax break.

North Carolina, which has the third-largest military population in the country, is one of at least 24 states to tax the military pay of active-duty personnel. House Bill 184 would exempt active-duty troops from paying state income tax.

State income tax rates range from 6 to 8 percent, and eliminating the tax for troops could save a staff sergeant, for example, about $1,400 a year.

"I think that's an awesome idea. Soldiers aren't stationary for very long. We go state to state," said Staff Sgt. Felicia Brown, who said she pays income tax to her home state of South Carolina in every paycheck.

Spc. John Fisher claims residence in Texas, a state with no income tax for anyone, but he said the bill likely wouldn't affect many troops in North Carolina.

"So many people in the military are from so many other states. They either pay income tax to their home-of-record state, or they don't," Fisher said.

Sponsors of the bill said they don't yet know how much the proposal would cost the state, and some lawmakers urged caution, saying the loss of troops' tax revenue could hurt some state services.

"It's important to recognize that every break, every tax break, constitutes something in terms of other programs not available to the citizens of North Carolina," said state Rep. Paul Luebke, D-Durham.

State Rep. Grier Martin, D-Wake, has introduced two other bills designed to benefit troops. One would protect service members and their families from predatory lending practices, while the other would fund a consumer protection specialist to help military families manage their finances.