House Bill 117 – The N.C. Competes bill
RUTHERFORD COUNTY, N.C. – Director Matt Blackwell updated his advisory board last week on the Economic Development Commission’s (EDC) activities and statewide factors affecting Rutherford County, among them, House Bill 117 currently in legislature.
N.C. Senate Republicans added 46 pages to the economic development bill with their own proposals – including lower personal income tax rates, a change in corporate taxes, a new formula for distributing sales tax revenues among counties, and a retooled jobs incentives program.
The revised bill, the “N.C. Competes” bill favored by Gov. Pat McCrory, represents a compromise between varying proposals for growing the state’s economy. Among the Senate bill’s provisions:
- New sales tax on services: the bill would broaden the sales tax base with taxes on services: advertising, veterinary and pet care services, and repairs and maintenance work on personal property such as cars. Large nonprofits, such as hospitals, would lose a sales tax exemption.
- Personal income tax cuts: The tax cut from 5.75 percent to 5.5 percent begins in 2016.
- Corporate taxes: Over three years, the state will use the “single sales factor” formula for calculating corporate taxes; the companies’ tax liability is based entirely on sales – instead of also factoring in their payroll and property value.
- Sales tax redistribution: a new distribution formula for allocating sales tax revenues among counties that would distribute 20 percent of revenues based on where sales occur, while 80 percent would be based on each county’s population.
- Job incentives: The bill caps the Job Development Investment Grant, or JDIG, incentives – the state’s main job incentive program – which has been out of money for months. The state could offer up to $15 million each year and up to $30 million during a year in which the state lands a “high-yield project” bringing thousands of jobs. Companies could receive higher payouts in poorer counties. And in the state’s wealthiest counties, including the Triangle and Mecklenburg County, local governments would be required to pitch in with incentives of their own.
HB 117 already has cleared the House so the chamber wouldn’t send the new version through its standard committee process. House members can only approve the Senate version or vote it down.