The House and Senate approved a $21.735 billion budget agreement. There are many aspects to the budget but from Coastal standpoint there has been monies set aside for dredging our shallow draft and deep draft inlets. There is also a provision to allow up to 6 terminal groins that could be approved within the State. The budget also includes changes to the tax and fee system within the State with many of them being fee based. As of now it seems that so called service fees on the Building Industry has been negated as there is a specific exclusion for “tangible personal property installed or applied by a real property contractor pursuant to a real property contract.”
Other items of note in the budget include:
- Historic Preservation Tax Credits: This provision has been restored for both residential and income-producing properties
- Preserves the Mortgage Interest Deduction and Property Tax Deduction
- Funding for economic development programs: $63 million for Jobs Development Investment Grants, $30 million for Film and Entertainment Grants, $3 million for the OneNC Small Business Fund, $2.5 million for Rural Economic Development Grants, and additional $2 million in recurring funding for tourism promotion.
- Personal income tax rate will drop to 5.499% in 2017 from the current 5.75%.
- In 2016, the standard deduction for a married couple that files jointly will move up from $15,000 to $15,500.
- The State’s corporate income tax rate will drop to 4% this year and could drop to 3% in future years if the state meets certain income triggers.
- On Jan 1, 2016, the state will shift to a single sales factor system for corporations.