RALEIGH, N.C. (AP) — A massive tax bill written by Republicans in the North Carolina Senate that cuts the individual rate further next year and eliminates the corporate tax in seven years passed a Senate committee on Wednesday.
The measure, which also includes a $1 billion grant program for businesses and nonprofits to supplement other COVID-19 relief aid they received, cleared the Senate Finance Committee on a voice vote. It could reach the Senate floor next week.
The grant program would be paid for with American Rescue Plan funds coming from Congress. Otherwise, the tax package would cost $2 billion through mid-2023, according to estimates from legislative staff.
The bill would reduce the individual income tax rate from 5.25% to 4.99% next year. Standard deductions for all filers would increase, and the per-child deduction would increase by $500. The corporate income tax, currently at 2.5%, would fall by 0.5 percentage points annually starting in 2024.
In response to the bill, Democratic Gov. Roy Cooper's office criticized on Tuesday “sweeping” tax breaks for corporations and the highest wage-earners. Republicans said lower- and middle-income families would benefit disproportionately from the measure.