Breaking News

Here’s the latest news from ABR’s Governmental Affairs division.  

Want more info?  Want to get involved? 

Contact Mike Butrum, ABR’s Government Affairs Director at 828.239.2907 or mbutrum@abr-nc.com

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wreathceremony

On May 14, 2013, NCAR President Patrice Willetts proudly joined Mike Butrum, Bob Wallen, and Priscilla Dennie in placing a wreath on the Tomb of the Unknown Soldier.

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Final 2013 Tax Reform Legislation

Click here to read NCAR’s 2013 Legislative & Regulatory Summary.

Highlights:

  • Personal Income Tax:
    • Eliminates the current three graduated rates of 6%, 7% and 7.75%.
    • Sets a flat rate of 5.8% in 2014 and 5.75% in 2015 and thereafter.
    • Eliminates personal exemptions and deductions, except:
      • Allows unlimited deductions for charitable contributions.
      • Caps the combined mortgage interest and property tax deductions at $20,000 for all filers.
    • Increases the standard deduction—currently ranging from $3,000 to $6,000—to the new range from $7,500 to $15,000:
      • $15,000 for married taxpayers filing jointly
      • $12,000 for head-of-household filers
      • $7,500 for single and married taxpayers filing separately.
    • Eliminates a deduction of $4,000 on government retirement income and $2,000 on private retirement income.
    • Raises the child tax credit from $100 per child to $125 for tax filers earning below $40,000. The credit would be eliminated for people earning more than $100,000, and would stay at $100 per child for those earning between $40,000 and $100,000.
  • Corporate Income Tax:
    • Will drop from 6.9% to 6% in 2014 and 5% in 2015, with further reductions to 4% in 2016 and 3% in 2017 if the state meets certain revenue targets.
    • Eliminates a $50,000 deduction on certain small-business-related income approved in 2011.

Other Details:

  • Sales Tax:
    • Effective Jan. 1, 2014:
      • The state rate remains 4.75%; local rate remains 2%, plus a local option 0.25%.
      • Expands to include service contracts for items already subject to the tax.
      • Does not apply to alterations, repairs, maintenance or installation of goods.
      • Tax manufactured homes (now 2% or $300 maximum) and modular homes (2.5%) will be at a full 4.75% state sales tax rate.
      • Repeals exemptions: chiropractors’ nutritional supplements and newspaper sales.
    • Effective July 1, 2014:
      • Repeals the current 3% franchise tax on electricity sales, replacing it with a 7% combined state and local sales tax rate.
      • Makes piped natural gas subject to a combined rate of 7%, and ends excise tax.
      • Repeals the sales tax holiday weekend in August and Energy Star appliance sales tax holiday weekend in November.
      • Caps sales tax refunds for individual nonprofit hospitals, universities and other charities at $45 million annually, holding them harmless at current levels.
  • Staying the Same:
    • Social Security income won’t be taxed any differently.
    • Other transactions—such as lawn services, automobile repairs, alterations and many business transactions—will continue to be exempt from the sales tax.
    • The combined sales and local sales tax that consumers pay in most counties remains 6.75% and 7% in others.
  • Other Taxes:
    • Eliminates the state estate tax. 
    • Cuts and caps the gas tax at 37.5 cents per gallon through June 30, 2015. 
    • Extends the state sales tax to certain service contracts and entertainment and entry tickets to certain attractions beginning Jan. 1, 2014. 
    • Eliminates some tax preferences, while extending others that were set to expire and keeping many unchanged. 
    • Keeps the Low Income Housing Tax Credit as-is, but allows it to expire in 2015. 
    • Makes no changes to franchise tax laws, but requires a study on the issue.  
    • Plans study of other topics, during the interim between sessions. 

The plan is expected to reduce state revenue over the next 3 years. It will reduce collections by $87 million in 2013-14, $438 million in 2014-15 and more than $600 million a year after that. Local governments would receive an estimated $14.6 million in additional revenue in 2013-14 and $36.2 million in 2014-15.

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Please remember to weigh in on both the NCAR and NAR “Call to Action” emails. It’s easy to tell our local Representatives and local Senators how you feel about the REALTOR issues, especially the Transfer Tax and Tax Reform. Email Mike or visit the NCAR website for more details.

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