While the Senate proceeded with business as usual, week 19 in the General Assembly saw little action in the House other than finalizing the Budget. Finally, after eight hours of amendments and debate on Thursday, the House passed SB 202 Appropriations Act of 2009. The House will return at 8 p.m. on Friday night and then again at midnight Saturday to vote on the budget’s second and third readings.
The House’s version of the budget differed greatly from the Senate’s version passed in April. Most notably, the House’s budget proposes over $1 billion in new taxes. The revenue (tax) package, sold to the public as “broadening the base and lowering the rate,” does neither. In fact, the House version INCREASES taxes and hammers corporations (including small businesses) already paying the lion’s share of taxes in North Carolina.
Most notably affecting NCHBA members is the expansion of franchise taxes to include Limited Liability Business Entities. These include limited liability companies, limited partnerships, limited liability partnerships and limited liability limited partnerships. The proposed franchise tax rate will be $1.50 per $1,000 of value for the greatest of 1) the apportioned capital base of the business entity; 2) 55% of appraised value of real and tangible property in North Carolina; or 3) total actual investment in tangible property in North Carolina. While the Senate’s revenue package did expand the franchise taxes to cover Limited Liability Corporations, the real estate part of the equation was added by the House.
NCHBA extends kudos to House Republicans for attempting three times to remove this new tax and thanks Democrats Dewey Hill and Bill Faison for voting with the Republicans in committee. Unfortunately, the Republicans did not have enough votes to remove this onerous provision. The budget will pass through the House and it is expected that the Senate will not concur. Conferees from both bodies will start meeting next week to resolve differences and, hopefully, get a budget in place prior to the end of the state’s fiscal year on June 30.
NCHBA leadership and Government Affairs staff wishes to thank members for taking the time to come to Raleigh and lobby members of the General Assembly on behalf of the home building industry. Our legislative reception on Tuesday night was well-attended and legislators commented on how nice it was to visit with so many of our members. Having good food and drink didn’t hurt either! NCHBA members were very successful in meeting with their representatives and senators on Wednesday and were very helpful in lobbying against the expanded franchise taxes, as that provision had just been inserted into the budget the previous night.
Be sure and check out the August issue of North Carolina Builder for our legislative day wrap-up. Also, if you have any pictures of your legislative visits to share, please send them as soon as possible to NCHBA Director of Communications Heather Crews at .
"You have a lot of people who utilize wine for health reasons."Stated by Rep. William Wainwright (D-Craven) who pushed successfully for an amendment to the House tax package to drop a wine tax increase.Well then, here’s to our health!
