NC Chamber’s Position: Tax reform is important to North Carolina's business community because tax policy is de facto economic development policy. The Chamber recognizes the following key factors when discussing tax reform with policymakers:
1) NC’s competitive position is paramount if our state is going to attract, retain and grow good jobs for working families.
2) In crafting tax policy it is important to avoid taxing investments and production. Doing so discourages both. Tax rates are important, but what you tax is equally important.
3) Businesses need certainty, in both what the tax policy is and in how it is administered and enforced. Uncertainty discourages capital investment.
4) If the sales tax base is going to be expanded, we should avoid, to the extent possible, taxing business-to-business services. This is closely related to the principle of avoiding taxing production. Business pays a lot of sales tax today – about 40 percent of the sales tax collected in North Carolina is paid by business. It is the second largest tax business pays after the property tax.
The 2013 legislature is expected to examine overall tax reform in North Carolina.
2012 Legislative Victories:
BILL SUMMARY
PRO-BIZ or NO-BIZ
OUTCOME
Promoted Competitive Tax Climate (H619) Successfully pushed tax reform to create a predictable and fair tax system by clarifying combined tax return laws for multi-state businesses.
PASSED
Corporate Tax Predictability and Fairness (S824) Supported legislation to continue developing guidelines around corporate tax filings and streamlining the process that tax professionals use when making that determination.
PASSED
Prohibit Unfair Contingency Fee Audits (H462) Addressed a priority business issue by prohibiting impartial and unfair contingency fee audits on companies, effective July 1, 2013 through July 1, 2015.
PASSED
Expiration of Temporary Tax (H200) $1.3 billion put back into the hands of North Carolinians by letting temporary sales tax, reduced from 5.75% to 4.75%, and corporate income tax surcharge expire July 1, 2011, as scheduled.
PASSED
Tax Relief for Small Businesses (H200) Supported provision in state budget that gives small businesses and start-up companies a tax exemption for the first $50,000 in net income, to spur private-sector job creation.
PASSED
Reform Unemployment Insurance Tax Structure (S99) Worked to create a more sustainable unemployment insurance system by supporting the authorization of the Department of Commerce to hire a consultant to analyze the state’s UI system including tax structure, benefits and ensuring a sound administration of the fund.
PASSED
Extend Business Tax Credits (H1025) Secured unanimous support to extend tax credits scheduled to expire on January 1, 2013 for one year, which underscores the importan
