The Senate Finance Committee gave approval to a bill that impacts local sales taxes and expands state government’s corporate welfare programs. The bill is on the schedule for Senate discussion today.
HB 1224 has been modified over the past week, with the final version gaining committee approval yesterday. With regard to local sales taxes, the bill would:
- Allow local governments to raise their sales taxes in 1/4 cent increments, pending voter approval, and allow the revenue to be used for purposes voters approve
- Cap the local sales tax rate at 2.5% (most counties currently levy a 2% local sales tax; which combined with the state rate of 4.75% brings the total to 6.75%)
- Notable exceptions are Durham and Orange counties, currently with local rates of 2.75%. They would be allowed to keep that rate under this bill
- Mecklenburg currently has a 2.5% local sales tax, this bill would not allow any further tax hikes
- Wake Co. is expected to ask voters to approve a 1/4 cent sales tax increase this fall. If that passes, they would not be able to ask for another 1/2 cent sales tax increase for transit in the future, as that would put them over the 2.5 cent cap proposed in HB 1224
Receiving little attention is the part of the bill that expands the state government’s corporate welfare programs. The currently existing JMAC (Jobs Maintenance and Capital Development Fund) and JDIG (Job Development Investment Grant) programs would be expanded; and a new “Job Catalyst Fund” that would be similar in nature would also be created (without any specific dollar amount mentioned in the bill). These programs are corporate welfare schemes that distribute taxpayer dollars to politically-privileged companies.
Lastly, the final bill also added a provision authorizing North Carolina-based companies to engage in “crowdfunding,” i.e. selling shares in a company not registered under state or federal law via the web.