General Assembly rushes complicated corporate tax changes likely to open corporate tax loopholes
The House voted yesterday to concur with complicated changes to corporate tax laws that were rushed through the Senate and are likely to open up major loopholes for large multi-state corporations.
House Bill 619, as amended in the Senate, will leave the state more vulnerable to tax shelter abuse by multi-state corporations. This abuse could cost North Carolina tens to even hundreds of millions each year in revenue at a time when resources for vital public investments are scarce.
The rushed passage of this bill represents a problematic “pass first, ask questions later” approach to major tax changes that could have devastating consequences for adequately investing in key public investments while putting locally-owned North Carolina businesses at a disadvantage compared to big, multi-state corporate competitors.
And contrary to the statements of some lawmakers, opening large tax loopholes for multi-state corporations is not an effective economic development strategy for North Carolina. Business taxes in North Carolina are already the lowest in the country. Allowing some big corporations to avoid paying the state’s already-low taxes will not encourage businesses to locate or grow in North Carolina.
In fact, making it easier for big corporations to avoid paying taxes will undermine North Carolina’s economy by eroding support for the public structures – public schools, community colleges and universities, highways and courts – that businesses and individuals rely on to succeed in the 21st century economy.
Instead of rushing to pass such a consequential piece of legislation at the end of the session with little time for debate and analysis, lawmakers should take adequate time to craft corporate tax rules that treat all businesses fairly while ensuring that all pay their fair share to support the vital public investments that benefit all North Carolina businesses and residents.