HB 948, the P.A.V.E. Act, amends North Carolina law to allow Mecklenburg County to levy an additional 0.5% local sales tax specifically for public transportation systems. The bill defines "public transportation system" broadly to include buses, transit facilities, bike/pedestrian infrastructure, and automated transport tunnels, while excluding general roads. Funds collected must supplement, not replace, existing public transit funding and can only be used for financing, building, operating, or maintaining these systems. The tax proceeds would be distributed monthly to Mecklenburg County and its public transportation authorities per a financial plan, with the bill taking effect only if Mecklenburg levies this tax.
SB 62 exempts eligible nonprofits in North Carolina from sales tax on physical items, digital property, and services used for their core activities, including fundraising events. It specifically covers 501(c)(3) organizations (excluding certain classifications), volunteer fire departments, and qualifying single-member LLCs owned by 501(c)(3) groups. The exemption includes purchases for fundraising events but has a $31.7 million annual cap per nonprofit. Nonprofits must obtain a special exemption number to qualify, and the bill adds new rules for applying and tracking these exemptions.
SB 334 repeals North Carolina's drug tax, which was levied on certain pharmaceutical products. It directly affects taxpayers who paid this tax on medications subject to the levy. The bill removes the tax provision from state law but does not change existing tax liabilities or refund claims for taxes paid before the repeal took effect. This is a straightforward repeal with no new provisions or mechanisms.
SB 351, the Right to Start Act, allows new businesses (corporations, S corporations, LLCs, partnerships, and other entities) less than five years old with under $5,000 in net income to defer their state income tax payment for one year. It also requires state agencies to prioritize contracting with businesses operating under five years and mandates the Department of Administration to collect and report annual data on these contracts, including demographic and geographic breakdowns. The bill directly affects small, newly formed businesses seeking tax relief and state procurement decisions. Key provisions include the tax deferral eligibility criteria and the data collection/reporting requirements for state contracts.
SB 446 increases funding for North Carolina's Housing Trust Fund to address the state's affordable housing shortage. It allocates $30 million in one-time funding for the 2025-2026 fiscal year and establishes recurring revenue streams: 1.5% of property transfer fees and 33% of real estate excise tax proceeds will now flow directly to the fund. This funding supports affordable housing solutions like rentals, home ownership, and repairs for North Carolinians struggling with housing costs - over 815,000 residents currently lack access to affordable housing. The bill aims to rebuild the fund's capacity after a 68% funding decline over the past decade.
SB 510 exempts menstrual products like tampons, sanitary napkins, panty liners, and menstrual cups from North Carolina's sales tax. The bill amends state tax law (G.S. 105-164.13) to specifically include these products in the list of tax-exempt items, effective October 1, 2025. It directly affects all consumers purchasing these products in North Carolina, removing a sales tax burden. The change applies to all retailers selling these items in the state, with no additional requirements or mechanisms beyond the tax code update. This is a straightforward policy change focusing on reducing costs for menstrual product buyers.
SB 621 reinstates a temporary sales tax exemption for school supplies in North Carolina, effective July 1, 2025. The bill reenacts G.S. 105-164.13C, which exempts qualifying items like notebooks, pens, and backpacks from state sales tax during a designated period each year. This directly affects families purchasing school supplies for children, reducing their out-of-pocket costs. The policy change is limited to tax relief for specific items and does not alter education funding or curriculum.
HB 510, the "Menstrual Equity for All Act," exempts feminine hygiene products (like tampons, menstrual cups, and sanitary napkins) from state sales tax starting July 1, 2025. It allocates $750,000 annually from 2025-2027 to fund a grant program through the Department of Public Instruction, providing these products to public school students in need. The bill directly affects public schools and students, particularly in low-income communities, by reducing financial barriers to accessing essential menstrual products. Key provisions include redefining "feminine hygiene products" for tax purposes and establishing a dedicated funding stream for school-based distribution.
HB 554 makes technical adjustments to North Carolina's tax code to align with federal rules and expand tax parity for peer-to-peer car rentals. It modifies how S corporation losses are deducted, restricts certain net operating loss deductions (like capital gains carryforwards), and updates estate/trust tax calculations. The bill specifically adds peer-to-peer car rental services to the alternate highway use tax, requiring them to pay the same tax as traditional rental companies. These changes affect individual taxpayers, S corporations, estates, trusts, and peer-to-peer car rental businesses, with most provisions effective for tax years beginning in 2025.
HB 582, titled "Providing Relief to Impacted Families Act," creates a quarterly tax refund program for specific nonprofits using motor fuel. It directly affects eligible organizations like volunteer fire departments, rescue squads, sheltered workshops (recognized by DHHS), and nonprofits distributing free food, by refunding the excise tax paid on fuel minus one cent per gallon. The key provision requires these nonprofits to claim refunds quarterly based on prior quarter purchases, reducing their operational costs. The bill does not address family relief as implied by its title but focuses solely on tax refunds for qualifying nonprofit entities. The measure is currently pending in the House Finance Committee.
