A BILL TO BE ENTITLED
AN ACT to expand the homestead exclusion by providing for an income tax credit for property taxes paid on a primary residence by elderly and disabled persons whose taxable incomes are not more than thirty thousand dollars as adjusted annually.
The General Assembly of North Carolina enacts:
SECTION 1.  Part 2 of Article 4 of Chapter 105 of the General Statutes is amended by adding a new section to read:
"§ 105‑151.30.  Credit for property taxes paid on a primary residence by certain low‑income individuals.
(a)	Credit. – An individual who meets the eligibility requirements under subsection (b) of this section is allowed, as a credit against the tax imposed by this Part, an amount equal to fifty percent (50%) of the property taxes paid by the individual under Subchapter II of this Chapter on a permanent residence owned by the individual.
(b)	Eligibility. – An individual is eligible for this credit only if the individual satisfies all of the following conditions:
(1)	The individual is at least 65 years of age or totally and permanently disabled.
(2)	For the 2006 taxable year, the individual has taxable income for the taxable year of not more than thirty thousand dollars ($30,000). For the 2007 and subsequent taxable years, the income eligibility limit is the amount for the preceding year, adjusted by the same percentage of this amount as the percentage of any cost‑of‑living adjustment made to the benefits under Titles II and XVI of the Social Security Act for the preceding calendar year, rounded to the nearest one hundred dollars ($100.00).
(3)	The individual is a North Carolina resident.
(4)	The individual is not eligible for the property tax homestead exclusion under G.S. 105‑277.1.
(c)	Definitions. – The definitions of 'permanent residence' and 'totally and permanently disabled' in G.S. 105‑277.1 apply in this section.
(d)	Multiple Ownership. – A married couple that owns and occupies a permanent residence as tenants by the entirety is entitled to the full benefit of this credit notwithstanding that only one of the couple meets the age or disability requirements of this section. When a permanent residence is owned and occupied by two or more persons other than husband and wife and one or more of the owners qualifies for this credit, each qualifying owner is entitled to the full amount of the credit not to exceed his or her proportionate share of the valuation of the property. No part of a credit available to one co‑owner may be claimed by any other co‑owner, and in no event may the total credit allowed for a permanent residence exceed the amount provided in this section.
(e)	Credit Refundable. – If the credit allowed by this section exceeds the amount of tax imposed by this Part for the taxable year reduced by the sum of all credits allowable, the Secretary must refund the excess to the taxpayer. In computing the amount of tax against which multiple credits are allowed, nonrefundable credits are subtracted before refundable credits."
SECTION 2.  This act is effective for taxable years beginning on or after January 1, 2006.