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North Carolina House Bill H459

North Carolina 2025-2026 Regular Session

North Carolina House Bill H459 Compare Versions

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11 GENERAL ASSEMBLY OF NORTH CAROLINA
22 SESSION 2025
3-H 1
4-HOUSE BILL 459
3+H D
4+HOUSE BILL DRH30198-NIxf-103
5+
56
67
78 Short Title: Income Tax Rate Reduction Trigger Mods. (Public)
8-Sponsors: Representatives Butler, Budd, Greenfield, and Harrison (Primary Sponsors).
9-For a complete list of sponsors, refer to the North Carolina General Assembly web site.
10-Referred to: Rules, Calendar, and Operations of the House
11-March 20, 2025
12-*H459 -v-1*
9+Sponsors: Representative Butler.
10+Referred to:
11+
12+*DRH30198 -NIxf-103*
1313 A BILL TO BE ENTITLED 1
1414 AN ACT TO MODIFY THE INCOME TAX RATE REDUCTION TRIGGER. 2
1515 Whereas, Hurricane Helene was an extremely strong Category 4 hurricane with 3
1616 maximum sustained winds of 140 miles per hour that reached North Carolina on September 27, 4
1717 2024; and 5
1818 Whereas, Hurricane Helene caused widespread heavy rainfall in excess of 30 inches 6
1919 in some areas, record flooding, and significant loss of human life and property in North Carolina; 7
2020 and 8
2121 Whereas, the Office of State Budget and Management estimated that, as of December 9
2222 13, 2024, Hurricane Helene caused $59.6 billion in damage to the State; and 10
2323 Whereas, Hurricane Florence was one of the strongest storms to form in the Atlantic 11
2424 Ocean in the history of North Carolina, reaching wind speeds of up to 140 miles per hour, 12
2525 covering 500 miles, and making landfall on September 14, 2018; and 13
2626 Whereas, Hurricane Florence caused heavy rainfall, record flooding, high storm 14
2727 surge, and dozens of deaths in the State; and 15
2828 Whereas, the people of Eastern North Carolina are still recovering from the 16
2929 devastation caused by Hurricane Florence; Now, therefore, 17
3030 The General Assembly of North Carolina enacts: 18
3131 SECTION 1.(a) Effective for taxable years beginning on or after January 1, 2025, 19
3232 G.S. 105-153.7 reads as rewritten: 20
3333 "§ 105-153.7. Individual income tax imposed. 21
3434 (a) Tax. – A tax is imposed for each taxable year on the North Carolina taxable income 22
3535 of every individual. The tax shall be levied, collected, and paid annually. Except as otherwise 23
3636 provided in subsection (a1) of this section, the The tax is a percentage four and one-quarter 24
3737 percent (4.25%) of the taxpayer's North Carolina taxable income computed as follows:income. 25
3838 Taxable Years Beginning Tax 26
3939 In 2022 4.99% 27
4040 In 2023 4.75% 28
4141 In 2024 4.5% 29
4242 In 2025 4.25% 30
4343 After 2025 3.99%. 31
4444 (a1) Rate Reduction Trigger. – Notwithstanding the tax rates set out in subsection (a) of 32
4545 this section, if total General Fund revenue in a fiscal year set out below exceeds the trigger 33
4646 amount indicated for that fiscal year, then the applicable tax rate for the indicated and subsequent 34
47-tax years shall be equal to the greater of (i) the prior taxable year's rate decreased by one-half 35 General Assembly Of North Carolina Session 2025
48-Page 2 House Bill 459-First Edition
49-percentage point (0.50%) or (ii) two and forty-nine hundredths percent (2.49%). For purposes of 1
50-this subsection, total General Fund revenue is the amount stated in the final accounting of total 2
51-General Fund Reverting Net Tax and Non-Tax Revenues for the fiscal year, as reported by the 3
52-Office of State Controller in August following the end of the fiscal year. 4
53-Fiscal Year Trigger Amount Taxable Year Beginning 5
54-FY 2025-2026 $33,042,000,000 In 2027 6
55-FY 2026-2027 $34,100,000,000 In 2028 7
56-FY 2027-2028 $34,760,000,000 In 2029 8
57-FY 2028-2029 $35,750,000,000 In 2030 9
58-FY 2029-2030 $36,510,000,000 In 2031 10
59-FY 2030-2031 $38,000,000,000 In 2032 11
60-FY 2031-2032 $38,500,000,000 In 2033 12
61-FY 2032-2033 $39,000,000,000 In 2034 13
62-…." 14
63-SECTION 1.(b) Effective for taxable years beginning on or after January 1, 2029, 15
64-G.S. 105-153.7, as amended by subsection (a) of this section, reads as rewritten: 16
65-"§ 105-153.7. Individual income tax imposed. 17
66-(a) Tax. – A tax is imposed for each taxable year on the North Carolina taxable income 18
67-of every individual. The tax shall be levied, collected, and paid annually. The Except as otherwise 19
68-provided in subsection (a1) of this section, the tax is four and one-quarter percent (4.25%) of the 20
69-taxpayer's North Carolina taxable income. 21
70-(a1) Rate Reduction Trigger. – Notwithstanding the tax rate set out in subsection (a) of 22
71-this section, if total General Fund revenue in a fiscal year set out below exceeds the trigger 23
72-amount indicated for that fiscal year, then the applicable tax rate for the indicated and subsequent 24
73-tax years shall be equal to the greater of (i) the prior taxable year's rate decreased by one-half 25
74-percentage point (0.50%) or (ii) two and forty-nine hundredths percent (2.49%). For purposes of 26
75-this subsection, total General Fund revenue is the amount stated in the final accounting of total 27
76-General Fund Reverting Net Tax and Non-Tax Revenues for the fiscal year, as reported by the 28
77-Office of State Controller in August following the end of the fiscal year. 29
78-Fiscal Year Trigger Amount Taxable Year Beginning 30
79-FY 2027-2028 $34,760,000,000 In 2029 31
80-FY 2028-2029 $35,750,000,000 In 2030 32
81-FY 2029-2030 $36,510,000,000 In 2031 33
82-FY 2030-2031 $38,000,000,000 In 2032 34
83-FY 2031-2032 $38,500,000,000 In 2033 35
84-FY 2032-2033 $39,000,000,000 In 2034 36
85-…." 37
86-SECTION 2. Except as otherwise provided, this act is effective when it becomes 38
87-law. 39
47+tax years shall be equal to the greater of (i) the prior taxable year's rate decreased by one-half 35
48+percentage point (0.50%) or (ii) two and forty-nine hundredths percent (2.49%). For purposes of 36
49+H.B. 459
50+Mar 19, 2025
51+HOUSE PRINCIPAL CLERK General Assembly Of North Carolina Session 2025
52+Page 2 DRH30198-NIxf-103
53+this subsection, total General Fund revenue is the amount stated in the final accounting of total 1
54+General Fund Reverting Net Tax and Non-Tax Revenues for the fiscal year, as reported by the 2
55+Office of State Controller in August following the end of the fiscal year. 3
56+Fiscal Year Trigger Amount Taxable Year Beginning 4
57+FY 2025-2026 $33,042,000,000 In 2027 5
58+FY 2026-2027 $34,100,000,000 In 2028 6
59+FY 2027-2028 $34,760,000,000 In 2029 7
60+FY 2028-2029 $35,750,000,000 In 2030 8
61+FY 2029-2030 $36,510,000,000 In 2031 9
62+FY 2030-2031 $38,000,000,000 In 2032 10
63+FY 2031-2032 $38,500,000,000 In 2033 11
64+FY 2032-2033 $39,000,000,000 In 2034 12
65+…." 13
66+SECTION 1.(b) Effective for taxable years beginning on or after January 1, 2029, 14
67+G.S. 105-153.7, as amended by subsection (a) of this section, reads as rewritten: 15
68+"§ 105-153.7. Individual income tax imposed. 16
69+(a) Tax. – A tax is imposed for each taxable year on the North Carolina taxable income 17
70+of every individual. The tax shall be levied, collected, and paid annually. The Except as otherwise 18
71+provided in subsection (a1) of this section, the tax is four and one-quarter percent (4.25%) of the 19
72+taxpayer's North Carolina taxable income. 20
73+(a1) Rate Reduction Trigger. – Notwithstanding the tax rate set out in subsection (a) of 21
74+this section, if total General Fund revenue in a fiscal year set out below exceeds the trigger 22
75+amount indicated for that fiscal year, then the applicable tax rate for the indicated and subsequent 23
76+tax years shall be equal to the greater of (i) the prior taxable year's rate decreased by one-half 24
77+percentage point (0.50%) or (ii) two and forty-nine hundredths percent (2.49%). For purposes of 25
78+this subsection, total General Fund revenue is the amount stated in the final accounting of total 26
79+General Fund Reverting Net Tax and Non-Tax Revenues for the fiscal year, as reported by the 27
80+Office of State Controller in August following the end of the fiscal year. 28
81+Fiscal Year Trigger Amount Taxable Year Beginning 29
82+FY 2027-2028 $34,760,000,000 In 2029 30
83+FY 2028-2029 $35,750,000,000 In 2030 31
84+FY 2029-2030 $36,510,000,000 In 2031 32
85+FY 2030-2031 $38,000,000,000 In 2032 33
86+FY 2031-2032 $38,500,000,000 In 2033 34
87+FY 2032-2033 $39,000,000,000 In 2034 35
88+…." 36
89+SECTION 2. Except as otherwise provided, this act is effective when it becomes 37
90+law. 38