Supporting balanced tax reforms that boost NC’s national and global competitiveness.
Making North Carolina the best place in the world to live, work, learn, play, and do business is no easy feat, but our state has made phenomenal strides over the last few years toward that goal. A driving factor behind those improvements has been our state’s balanced tax reforms.
Before 2013, North Carolina had one of the least competitive tax climates in the nation: the 44th worst, according to the nonpartisan Tax Foundation. But after a series of commonsense reforms backed by the NC Chamber we reduced both the individual and corporate tax rates and jumped to the 10th most competitive state in country*.
The NC Chamber advocates for tax policy that meets five tax principles we identified after conversations with our members: competitiveness, equity, efficiency, simplicity and certainty. Those fundamental principles will help ensure any tax modernization efforts will accomplish goals including boosting our state’s national and global competitiveness, identifying ways to streamline burdensome regulations, improving outdated systems, and simplifying complicated policies.
*Data derived from The Tax Foundation. https://taxfoundation.org/2021-state-business-tax-climate-index/
The Current Challenge
Predictability and certainty are the cornerstones that anchor North Carolina’s reputation as one of the best states in the nation for business; however, a number of potential obstacles threaten to undermine the strong, predictable tax climate we have worked hard to build here in North Carolina. Chief among these was a bewildering position taken by our Department of Revenue to retroactively disallow Renewable Energy Tax Credits – a position demurred to by a recent ruling from an administrative law judge – which threatens our favorable tax climate and the very notion of using tax policy to drive business investment within the state. This position, which has caused scores of audits, disallowances, and lawsuits not only undermines a bipartisan policy goal of several general assemblies but puts North Carolina’s investment friendly reputation in a deteriorating state.
The decision to retroactively disallow Renewable Tax Energy Credits represents a threat that reaches beyond this single tax credit program. The lack of uncertainty this creates harms taxpayer confidence in other tax credit programs as well, threatening the climate of certainty and predictability we have worked to create around tax issues in North Carolina. The NC Chamber will work toward resolutions that restore taxpayer confidence in Renewable Energy Tax Credits and protect our reputation as state with a business-friendly tax climate.
Learn more about the NC Chamber’s plans to advance this issue in the 2019 – 2020 Legislative Agenda.