Gov. Pat McCrory signs tax bill hours after Senate, House passage

jfrank@newsobserver.comMay 29, 2014 

Energy Summit McCrory 42

Gov. Pat McCrory

JEFF WILLHELM — jwillhelm@charlotteobserver.com Buy Photo

Hours after the Senate and House gave final approval to a major tax bill, Gov. Pat McCrory signed it.

Republican leaders fast-tracked a wide-ranging measure that eliminates the ability of cities and towns to charge local businesses privilege taxes and levy a new tax on e-cigarettes. The Senate gave it a final vote Thursday morning and the House agreed to the amended measure in the afternoon.

House Democrats objected to the quick pace but Republicans said the measure was urgent. It includes a provision to adjust the occupancy tax ahead of the U.S. Open golf tournament in Pinehurst in June.

The part of the bill revoking local authority to levy privilege taxes drew the most attention. As mayor, McCrory defended Charlotte’s use of the tax and even supported increases. But now as governor, McCrory said a change was needed.

“There’s no debate that the privilege tax has been applied inconsistently, creating confusion and expense for our businesses,” he said in a statement after signing the bill. “Therefore, I support needed reform.”

The state’s municipalities will lose a collective $62 million when it takes effect July 1, 2015. Republican lawmakers pledge to find ways to offset the loss in the next legislative session, leaving cities like Raleigh and Charlotte who raise millions from the taxes, on a fiscal cliff.

McCrory said he received a commitment from House and Senate leaders to address the funding issue in the next year.

“Legitimate concerns have been expressed by the North Carolina Metropolitan Mayors Coalition, North Carolina League of Municipalities and other stakeholders about the provision which sunsets this tax next year. It should be noted that if this bill wasn’t signed into law, it could result in the immediate elimination of the local privilege tax option.

“With their assurances, I look forward to working with municipalities and the General Assembly to seek long-term resolution,” he said.

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