RALEIGH, N.C. - If you're among the North Carolinians who have already filed your taxes, you may have noticed your state tax burden is a little greater this year.

Greg Elder, a Spruce Pine tax preparer for H & R Block, says the state's decision to eliminate tax credits like the earned-income tax credit (EITC) from the tax system is impacting the budgets of his clients.

"Most people, it boils down to a smaller North Carolina refund than they've received in the past," says Elder. "If you're making a plan prior to getting your taxes done that you're going to use your North Carolina refund, don't go buy that refrigerator just yet."

The new system eliminated the tiered income tax rates that were tied to income levels, setting the tax rate at 5.8 percent for 2014, and 5.75 for this year. The tax changes are the result of a tax overhaul passed in 2013 and put into effect for the 2014 tax year.

Alexandra Sirota, director of the NC Budget and Tax Center, says while her organization doesn't take issue with the necessity of taxes, her analysis indicates the new tax model disproportionately impacts the working class.

"The key thing about a tax system is it absolutely has to be adequate to meet the core public service commitments that we need to be making as a state," says Sirota. "But the way in which we raise revenue is really critical."

Sirota says taxpayers making less than $67,000 a year - about 80 percent of the state - will see their taxes increase under the tax plan. Even with that, the Institute on Taxation and Economic Policy estimates state tax revenue will be down by about $1 billion by the end of this year because of an overall reduction in corporate taxes.

Elder says while a tax refund is never a guarantee, the abrupt change in the state tax system is leaving many of his clients without a much-needed boost this spring.

"People do count on that money," he says. "It's been similar for years and years and years, so they had no reason to think that it wouldn't be for tax year 2014."

In addition to the EITC, deductions for medical expenses, retirement income, child care expenses and college 529 plans also were eliminated.


get more stories like this via email

The Biden administration has made more investments in revitalizing the U.S. semiconductor industry, including in an Oregon company.

Seventeen businesses will receive $5 million under the Small Business Innovation Research Program, part of the CHIPS for America Act passed by Congress in 2022.

The Provenance Chain Network, a Portland-based company, provides supply-chain transparency for semiconductors parts. Jeffrey Gaus, the company's founder and CEO, said the pandemic proved how critical the supply chain is.

"They set out with the CHIPS Act to promote re-shoring, near-shoring - basically the reconfiguration of the semiconductor supply chain," he said. "As part of that, there was a lot of capital put into that bill to support supply-chain innovations, and we're one of the recipients of that."

Under the CHIPS for America Act, more than $32 billion has been allocated across 16 states. The Biden administration has said the law will create 115,000 jobs.

Gaus lauded Gov. Tina Kotek, and Gov. Kate Brown before her, for convening semiconductor task forces, and credited state lawmakers as well.

"If you take a look at what the Oregon Legislature has done," he said, "the amount of money that we have approved as a state to support the industry on a per capita basis is of the highest in the country."

Gaus said Oregon will likely continue to lead in semiconductor design. However, he said he thinks there are challenges to luring manufacturing to the state, including the high cost of housing.

Gaus said he believes the semiconductor industry will make its way back to the United States over the next few decades. He added, however, that the CHIPS for America Act is only the first part of that process.

"This is just the beginning of what we need to do," he said, "to revitalize the semiconductor industry and return this nation to its former prominence."


get more stories like this via email

A large tax hike could appear soon, that would affect Illinois' small businesses still rebounding from the pandemic. One group hopes Congress will act before two bills expire, and the tax increase takes effect.

A small business advocacy group, The National Federation of Independent Businesses (NFIB) says one of them - the 20% Small Business Deduction Act - was created to align small business tax rates with those of larger corporate competitors.

The group's Vice President for Federal Government Relations Jeff Brabant said...

"It's difficult for small businesses to be able to compete with a lot of their larger competitors, and increasing prices isn't always a great option for them," said Brabant. "If you're an employee and you go to a small employer who may not have the money to be able to offer great benefits, versus a large employer who can offer those benefits, it's always going to put the smaller employer at a little bit of a disadvantage."

If Congress decides not to renew the 20% Small Business Deduction Act, Brabant predicted that 90% of America's businesses would face additional barriers to growth and hiring more workers.

According to the U.S. Small Business Administration's 2023 Profile report, Illinois has slightly more than 2 million small business employees - which account for 44% of the state's employees.

The other law up for review by the House is the Main Street Tax Certainty Act, which permits small businesses to deduct up to 20% of their qualified business income and make it a permanent deduction.

Brabant noted that the NFIB strongly supports both measures, which expire on December 31, 2025 - and have bipartisan support.

As the country waits to see the presidential election results, he said he believes the plight of small businesses should be the "number one issue" on Congress's mind.

"It shouldn't be a Republican or Democratic issue," said Brabant. "This should be 'small businesses are the foundation of the economy,' and I don't think anyone wants to see Main Street businesses have a tax hike."

Brabant said the organization is glad both presidential candidates have talked about small businesses, because these discussions don't always occur.

He said NFIB's focus is to educate and increase Congress' awareness, and he said he hopes they will act sooner rather than later.




get more stories like this via email

A large tax hike could be awaiting small businesses still rebounding from the pandemic. One group hopes Congress will act before two bills expire and the tax increase takes effect. The 20% Small Business Deduction Act was created to align small business tax rates with those of larger corporate competitors. The National Federation of Independent Businesses, which advocates for small businesses, wants the laws renewed.

Jeff Brabant, NFIB Vice President, said small businesses have few alternatives for competing with bigger rivals.

"It's difficult for small businesses to be able to compete with a lot of their larger competitors, and increasing prices isn't always a great option for them." If you're an employee and you go to a small employer who may not have the money to be able to offer great benefits, versus a large employer who can offer those benefits, it's always going to put the smaller employer at a little bit of a disadvantage, he explained.

If Congress decides not to renew the Act, Brabant predicts 90% of America's businesses would face additional barriers to growth and hiring more workers. He said the average small business has less than eight employees. According to the U.S. Small Business Administration's 2023 Profile report, Indiana has slightly more than 1 million small business employees - which account for 44% of the state's workers.

The House is also reviewing the Main Street Tax Certainty Act. That allows small businesses to deduct up to 20% of their qualified business income and become a permanent deduction. Both measures are scheduled to expire at the end of next year. The NIFB strongly supports the laws, both of which have bipartisan support. As the country awaits election results, Brabant believes the plight of small businesses should be the number one issue on lawmakers' minds.

"It shouldn't be a Republican or Democratic issue. This should be 'small businesses are the foundation of the economy,' and I don't think anyone wants to see Main Street businesses have a tax hike," he continued.

Brabant said the organization is encouraged that both presidential candidates have discussed small businesses because those talks don't always happen. NIFB's focus is to educate and increase Congress' awareness and lawmakers for them to act sooner rather than later, he added.