Pardon Our Dust
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Members of the General Assembly have been hard at work in their districts making the most out of the interim. Across social media, members can be seen visiting local schools, restaurants, and hosting panels to hear their constituents’ concerns. The time away allows them to share what is happening in Raleigh, what to expect when short session begins, and to ponder legislative priorities for their districts. Members will continue to travel back and forth to Raleigh to convene for interim committees.
Interim committees allow members to hear in-depth presentations on specific topics from legislative staff, state agencies, and other organizations. During the interim, members are able to reflect on the issues at hand, prioritize the issues, and work through them without having to take a vote right away. The General Assembly will reconvene Tuesday, April 28th at 12:00 PM. During the short session, legislation eligible for consideration will include bills affecting the budget, local bills, pensions and retirement changes, constitutional amendments, redistricting bills, bills responding to redistricting litigation, and bills vetoed by the Governor.
Revenue Laws Study Committee
The interim Revenue Laws Study Committee met on Wednesday, January 29th. Rep. Julia Howard (R-Davie) presided over the committee’s first meeting of the interim. The committee took a look at the annual Internal Revenue Code bill, which seeks to align some federal tax provisions and apply them to North Carolina taxpayers. The House Committee on Finance discussed and voted on Senate Bill 622: Reduce Threshold/Medical Expense Deduction during the one day session on January 14th. The bill passed through committee and subsequently passed on the House floor 118-0. The Senate declined to take the bill up that day and is expected to consider it during the short session.
In December, Congress enacted H.R. 1865: Further Consolidated Appropriations Act, 2020 which contains a provision that allows taxpayers to deduct medical and dental expense that exceed 7.5%. In North Carolina, the threshold is currently set at 10%. During the initial discussion in House Finance, Rep. Howard stated,
“This change allowing the enhanced medical expense reduction will not apply until we reference the code as updated to the 2020 version. We, the House Finance Committee, felt that it is important and the right thing to do to give tax payers the knowledge, because most taxpayers start filing in February. There is a lot, 218,000, taxpayers that use this deduction, and most of them are already struggling with medical filings. This is just a simple addition.”
In the review of tax laws, the staff presented information on how local sales taxes are collected and redistributed.In their comments, staff noted that local sales tax redistribution is “antiquated” in many ways, emphasizing specifically adjustment factors that are “outdated.”
Staff added that Revenue Laws will look more closely at local sales tax redistribution and “ways to modernize and simplify it” at next month’s meeting. The committee will meet again on Wednesday, February 12th to discuss the bill further.