A BILL TO BE ENTITLED
AN ACT to reduce state individual income tax and franchise tax.
The General Assembly of North Carolina enacts:

part i. individual income tax
SECTION 1.1.(a)  G.S. 105‑153.7(a) reads as rewritten:
"(a)	Tax. – A tax is imposed for each taxable year on the North Carolina taxable income of every individual. The tax shall be levied, collected, and paid annually. The tax is four and ninety‑nine hundredths percent (4.99%) of the taxpayer's North Carolina taxable income."
SECTION 1.1.(b)  G.S. 105‑153.5(a)(1) reads as rewritten:
"(1)	Standard deduction amount. – The standard deduction amount is zero for a person who is not eligible for a standard deduction under section 63 of the Code. For all other taxpayers, the standard deduction amount is equal to the amount listed in the table below based on the taxpayer's filing status:
Filing Status	Standard Deduction
Married, filing jointly/surviving spouse	$25,500
Head of Household	19,125
Single	12,750
Married, filing separately	12,750."
SECTION 1.1.(c)  G.S. 105‑153.5(a1) reads as rewritten:
"(a1)	Child Deduction Amount. – A taxpayer who is allowed a federal child tax credit under section 24 of the Code for the taxable year is allowed a deduction under this subsection for each qualifying child for whom the taxpayer is allowed the federal tax credit. The amount of the deduction is equal to the amount listed in the table below based on the taxpayer's adjusted gross income, as calculated under the Code:
Filing Status	AGI	Deduction Amount
Married, filing jointly/	Up to $40,000	$3,000
surviving spouse	Over $40,000
	Up to $60,000	2,500
	Over $60,000
	Up to $80,000	2,000
	Over $80,000
	Up to $100,000	1,500
	Over $100,000
	Up to $120,000	1,000
	Over $120,000	
	Up to $140,000	500.00
	Over $140,000	0

Head of Household	Up to $30,000	$3,000
	Over $30,000
	Up to $45,000	2,500
	Over $45,000
	Up to $60,000	2,000
	Over $60,000
	Up to $75,000	1,500
	Over $75,000
 	Up to $90,000	1,000
	Over $90,000	
	Up to $105,000	500.00
	Over $105,000	0

Single	Up to $20,000	$3,000
	Over $20,000
	Up to $30,000	2,500
	Over $30,000
	Up to $40,000	2,000
	Over $40,000
	Up to $50,000	1,500
	Over $50,000
	Up to $60,000	1,000
	Over $60,000	
	Up to $70,000	500.00
	Over $70,000	0

Married, filing separately	Up to $20,000	$3,000
	Over $20,000
	Up to $30,000	2,500
	Over $30,000
	Up to $40,000	2,000
	Over $40,000
	Up to $50,000	1,500
	Over $50,000
	Up to $60,000	1,000
	Over $60,000	
	Up to $70,000	500.00
	Over $70,000	0."
SECTION 1.1.(d)  This section is effective for taxable years beginning on or after January 1, 2022.

part ii. franchise tax
SECTION 2.1.(a)  G.S. 105‑122(d) reads as rewritten:
"(d)	Tax Base. – A corporation's tax base is the 
	proportion of its net worth as set out in subsection (c1) of this section.
	
	"
SECTION 2.1.(b)  G.S. 105‑114.1(b) reads as rewritten:
"(b)	Controlled Companies. – If a corporation or an affiliated group of corporations owns more than fifty percent (50%) of the capital interests in a noncorporate limited liability company, the corporation or group of corporations must include in its tax base pursuant to G.S. 105‑122 the same percentage of the noncorporate limited liability company's net worth."
SECTION 2.1.(c)  G.S. 105‑120.2(b) reads as rewritten:
"(b)	Tax Rate. – Every corporation taxed under this section shall annually pay to the Secretary of Revenue, at the time the return is due, 
	a franchise or privilege tax at the rate of one dollar and fifty cents ($1.50) per one thousand dollars ($1,000) of the amount determined under subsection (a) of this section, but in no case shall the tax be more than one hundred fifty thousand dollars ($150,000) nor less than two hundred dollars ($200.00).

	"
SECTION 2.1.(d)  This section is effective for taxable years beginning on or after January 1, 2023, and applicable to the calculation of franchise tax reported on the 2022 and later corporate income tax return.

PART III. EFFECTIVE DATE
SECTION 3.1.  Except as otherwise provided, this act is effective when it becomes law.