A BILL TO BE ENTITLED
AN ACT TO REDUCE INCOME TAX RATES.
The General Assembly of North Carolina enacts:
SECTION 1.  Effective for taxable years beginning on or after January 1, 2005, G.S. 105‑134.2(a) reads as rewritten:
"(a)	A tax is imposed upon the North Carolina taxable income of every individual. The tax shall be levied, collected, and paid annually and shall be computed at the following percentages of the taxpayer's North Carolina taxable income.
(1)	For married individuals who file a joint return under G.S. 105‑152 and for surviving spouses, as defined in section 2(a) of the Code:
For Taxable Years Beginning in 2005:
Over	Up To	Rate
‑0‑	$21,250	5.75%
$21,250	$100,000	6.75%
$100,000	NA	7.5%
For Taxable Years Beginning in 2006:
Over	Up To	Rate
‑0‑	$21,250	5.5%
$21,250	$100,000	6.5%
$100,000	NA	7.25%
For Taxable Years Beginning in 2007:
Over	Up To	Rate
‑0‑	$21,250	5.25%
$21,250	$100,000	6.25%
$100,000	NA	7%
For Taxable Years Beginning Thereafter:
Over	Up To	Rate
‑0‑	$21,250	5%
$21,250	$100,000	6%
$100,000	NA	6.75%
(2)	For heads of households, as defined in section 2(b) of the Code:
For Taxable Years Beginning in 2005:
Over	Up To	Rate
	‑0‑	$17,000	5.75%
$17,000	$80,000	6.75%
$80,000	NA	7.5%
For Taxable Years Beginning in 2006:
Over	Up To	Rate
	‑0‑	$17,000	5.5%
$17,000	$80,000	6.5%
$80,000	NA	7.25%
For Taxable Years Beginning in 2007:
Over	Up To	Rate
	‑0‑	$17,000	5.25%
$17,000	$80,000	6.25%
$80,000	NA	7%
For Taxable Years Beginning Thereafter:
Over	Up To	Rate
	‑0‑	$17,000	5%
$17,000	$80,000	6%
$80,000	NA	6.75%
(3)	For unmarried individuals other than surviving spouses and heads of households:
For Taxable Years Beginning in 2005:
Over	Up To	Rate
‑0‑	$12,750	5.75%
$12,750	$60,000	6.75%
$60,000	NA	7.5%
For Taxable Years Beginning in 2006:
Over	Up To	Rate
‑0‑	$12,750	5.5%
$12,750	$60,000	6.5%
$60,000	NA	7.25%
For Taxable Years Beginning in 2007:
Over	Up To	Rate
‑0‑	$12,750	5.25%
$12,750	$60,000	6.25%
$60,000	NA	7%
For Taxable Years Beginning Thereafter:
Over	Up To	Rate
‑0‑	$12,750	5%
$12,750	$60,000	6%
$60,000	NA	6.75%

(4)	For married individuals who do not file a joint return under G.S. 105‑152:
For Taxable Years Beginning in 2005:
Over	Up To	Rate
‑0‑	$10,625	5.75%
$10,625	$50,000	6.75%
$50,000	NA	7.5%
For Taxable Years Beginning in 2006:
Over	Up To	Rate
‑0‑	$10,625	5.5%
$10,625	$50,000	6.5%
$50,000	NA	7.25%
For Taxable Years Beginning in 2007:
Over	Up To	Rate
‑0‑	$10,625	5.25%
$10,625	$50,000	6.25%
$50,000	NA	7%
For Taxable Years Beginning Thereafter:
Over	Up To	Rate
‑0‑	$10,625	5%
$10,625	$50,000	6%
$50,000	NA	6.75%
"SECTION 2.  G.S. 105‑130.3 reads as rewritten:
"§ 105‑130.3.  Corporations.
A tax is imposed on the State net income of every C Corporation doing business in this State. An S Corporation is not subject to the tax levied in this section. The tax is a percentage of the taxpayer's State net income computed as follows: 
Income Years Beginning	Tax
In 1997	7.5%
In 1998	7.25%
In 1999	7%
After 1999
and before 2005	6.9%
In 2005	6.65%
In 2006	6.4%
In 2007	6.15%
After 2007	5.9%"
SECTION 3.  G.S. 115C‑546.1(b) reads as rewritten:
"(b)	Each calendar quarter, the Secretary of Revenue shall remit to the State Treasurer for credit to the Public School Building Capital Fund an amount equal to the applicable fraction provided in the table below of the net collections received during the previous quarter by the Department of Revenue under G.S. 105‑130.3 minus two million five hundred thousand dollars ($2,500,000). All funds deposited in the Public School Building Capital Fund shall be invested as provided in G.S. 147‑69.2 and G.S. 147‑69.3.
Period	Fraction
10/1/97 to 9/30/98	One‑fifteenth (1/15)
10/1/98 to 9/30/99	Two twenty‑ninths (2/29)
10/1/99 to 9/30/00	One‑fourteenth (1/14)
10/1/00 to 9/30/05	Five sixty‑ninths (5/69)
10/1/05 to 9/30/06	Ten one‑hundred‑and‑thirty‑thirds (10/133)
10/1/06 to 9/30/07	Five sixty-fourths (5/64)
10/1/07 to 9/30/08	Ten one‑hundred‑and‑twenty‑thirds (10/123)
After 9/30/08	Five fifty‑ninths (5/59)"
SECTION 4.  Section 1 of this act becomes effective for taxable years beginning on or after January 1, 2005. The remainder of this act is effective when it becomes law.