The North Carolina Senate yesterday approved HB 97, ‘The 2015 Appropriations Act’, which is markedly different from the version the House passed a few weeks ago. The 508-page Senate budget is a more austere spending plan, and includes numerous provisions that alter elements of tax law and other policy areas.
Outlined below are the key differences between the Senate and House versions of the budget in policy areas important to REALTORS® and other real estate industry professionals:Issue House BudgetSenate BudgetMortgage Interest and Property Tax DeductionsCurrent law caps the combined deductions at $20,000. Current law also allows an unlimited deduction for charitable giving.No change.Preserves deductions for MI and property tax, but adds other Schedule A deductions under the $20,000 cap. This policy change erodes the benefits of the MID and property tax deduction for homeowners.Historic Preservation Tax CreditThis tax credit expired in 2014.Reinstates the tax credit with caps of $20 million for larger projects and $22,500 for single-family homes.Contains no funding for a tax credit.Workforce Housing Loan ProgramLast year’s budget funded this program at $10 million. Increases funding to $20 million.Maintains current funding of $10 million.Leaking Petroleum Underground Storage Tank (UST) Cleanup FundsLast year’s budget appropriated recurring and non-recurring funds for these programs.Maintains a recurring appropriation for the commercial and non-commercial UST funds and adds a non-recurring appropriation to clear the backlog of claims.Contains a non-recurring appropriation for the non-commercial UST fund to clear the backlog of claims and terminates the allowance of claims after August 2015.Film Incentive Grant ProgramLast year’s budget contained $10 million for this grant program. Increases funding to $40 million.Maintains funding at $10 million.Sales Tax ReapportionmentCurrent law distributes 80% of sales tax revenue to the counties where the sale occurred and 20% on a per capita basis.No change.Phases-in over four years a new allocation formula to distribute 80% of sales tax revenue on a per capita basis and 20% to the point where the sale occurred.Sales Tax on ServicesCurrent law places a sales tax on a narrow group of services. No change.Adds advertising, veterinary and non-medical pet care, and personal property repair and installation services to the sales tax base.
The Senate version also contains a Medicaid reform proposal and differs significantly from the House version in the areas of transportation and education spending.
The House is not expected to concur with the Senate’s changes to the budget bill. A non-concurrence vote will result in the appointment of a conference committee of House and Senate leaders. The conference committee will attempt to craft a compromise version of the bill that can pass both chambers.
As is the typical scenario, negotiations over the budget and the policy changes introduced in the Senate’s version will drag on for quite a while. It is likely the House and Senate will pass a continuation budget for funding of state government after the fiscal year ends on June 30.
Source: North Carolina Association of REALTORS®BACK TO LATEST NEWS