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House, Senate tax plans compared
WRAL News provides a quick comparison of the leading House and Senate tax reform plans, along with related documents.
Posted 2013-05-30T15:31:35+00:00 - Updated 2013-05-30T19:55:19+00:00
Senate offers two tax plans
By Mark Binker
The House and Senate released updated versions of their tax reform proposals Thursday morning.
Sen. Bob Rucho, R-Mecklenburg issued a summary sheet and bill text for his plan.
Rep. David Lewis, R-Harnett, also provided summary information and a related table for his proposal.
Worth noting: Sens. Dan Clodfelter, D-Mecklenburg, and Fletcher Hartsell, R-Cabarrus, put out a separate Senate proposal, which makes changes in such a way that it looks to be compromise between the House bill and the main Senate bill.
Taxes, Changes | House Plan | Senate plan (Rucho) | Senate Plan (Clodfelter/Hartsell) |
---|---|---|---|
SALES TAX RATE | Drops from 6.75 to 6.65 percent in most parts of state starting in 2014. | Drops from 6.75 to 6.5 percent in Jan. 2015. | Drops from 6.75 to 6.5 percent starting Sept. 1, 2014. |
SALES TAXED ITEMS | Services related to physical items, such as warranties and delivery, would be subject to tax. | The number of services to which sales tax applies would expand over four years, eventually encompassing more than 130 services not currently taxed. | More items, including some services attached to tangeable property, would be subject to sales tax starting July 1, 2014. |
INDIVIDUAL INCOME TAX RATE | Statewide flat 5.9 percent tax rate replaces three-tiered system. | Statewide rate of 5.5 percent in 2014. That steps down over three years to 4.5 percent in 2016. | Statewide rate of 5.9 percent. |
INDIVIDUAL INCOME TAX EXEMPTIONS | Can exempt first $12,000 of income or itemize deductions up to $25,000. | $10,000 of income tax-exempt in 2014. That steps up to $12,500 in 2015. | New, deductible housing expense allowance equal to the greater of $5,000 or the mortgage interest on the taxpayer's legal residence, not to exceed $10,000. |
CORPORATE INCOME TAX | Rate drops from 6.9 to 5.4 percent over five years. | Rate drops from 6.9 to 6 percent over three years. * The bill also changes how the tax rate is calculated to be friendlier to manufacturers. | Rate drops from 6.9 to 5.95 percent. * Repeals some tax credits. * Makes corporate income tax more friendly to manufacturers and businesses with lots of equipment. |
ESTATE TAX | Repealed. | Repealed. | Plan does not show changes to the estate tax. |
BUDGET IMPACT | Requires $221.8 million in cuts over two years. | Requires $770 million in cuts over two years. | Does not require any reserve. Sets aside extra revenue to repay federal unemployment insurance debt. |