Carolina Journal reports on the latest from Senate Bill 622:
The Senate Finance Committee unanimously passed Senate Bill 622, the Tax Reduction Act of 2019, on Tuesday, May 14, and sent it to the Senate Rules Committee.
Sen. Bill Rabon, R-Brunswick, Rules Committee chairman, told Carolina Journal the bill would be brought up for a committee vote on Wednesday, and sent to the floor Thursday.
“We’ve been working on this package for a long time,” said Finance Committee Chairman Jerry Tillman, R-Randolph. “This is a historic package in that we’re cutting close to $1 billion in taxes.”
Tillman credited GOP tax reforms with stimulating the economy and producing unexpected budget surpluses. Republicans have a goal of eventually eliminating franchise taxes and corporate income taxes, he said.
Personal income tax filers would get a break under the bill because it raises the standard deduction. That is the portion of income the government does not tax. The deduction would rise from $20,000 to $20,750 for married couples filing jointly; from $15,000 to $15,563 for head of household; and from $10,000 to $10,375 for single filers, and married people filing separately.
Tillman said the franchise tax has been a staple of the state tax code for many years. But it’s roundly disliked because entrepreneurs must pay a tax for the privilege of operating a business in the state.
S.B. 622 cuts the franchise tax over two years. Now it’s $1.50 for every $1,000 of a company’s worth. Under the bill, the rate would drop to $1.30 per $1,000 for 2019 returns, and $1.00 per $1,000 for 2020 returns. The minimum $200 assessment and $150,000 cap on the tax are unchanged.