NC Senate passes constitutional amendment to let voters cap the income tax
AI-generated summary reviewed by our newsroom.
- Senate passed a bill to let voters choose a 3.5% income tax cap.
- Republicans hold a three‑fifths Senate supermajority required to advance the amendment.
- Bill moves to the House Rules Committee before a potential floor vote later Tuesday.
The North Carolina Senate passed a constitutional amendment bill on Tuesday that would let voters choose whether to cap the state personal income tax rate at 3.5%.
The current rate is 3.99%, and is already set to drop in 2027 because of a deal between Republicans in control of the General Assembly.
Lawmakers are fast-tracking a plan to put that and five more constitutional amendments on voters’ ballots this November. The income tax cap is the first to pass a chamber. The bill sailed through two Senate committees Monday and Tuesday ahead of the final vote late Tuesday morning.
Senate Bill 1080, “Lower Taxes for All NC,” passed 30-18.
Senate Democrats argued unsuccessfully that the cap should allow for tax increases in the case of natural disasters.
Republicans control the Senate with a three-fifths supermajority, which is the required threshold to pass a constitutional amendment ballot measure.
House Republicans are one vote short of total control, so they need at least one Democrat or one of the two unaffiliated representatives to vote with them. The income tax cap bill passed the House Rules Committee Tuesday afternoon. That’s the final committee a bill passes through before a floor vote, which will be voted on Wednesday.
Constitutional amendment bills do not need approval from the governor.
Tax policy debate part of budget deal
Voters approved a constitutional amendment in 2018 to cap the individual income tax rate at 7%. The tax rate has dropped steadily since Republicans gained control of the legislature 15 years ago. The current 3.99% rate for 2026 was dropped from 4.25% last year.
Republicans have disagreed until recently about how fast to cut the income tax rate, with House Speaker Destin Hall wanting to make sure there is enough revenue to keep the state running and give raises to teachers and state employees. Senate leader Phil Berger wanted to keep the pace of cuts set in place in a 2023 agreement.
Hall and Berger announced last week they had broken through their budget stalemate with an agreement to add the constitutional tax cap as well as move ahead a House proposal to put another constitutional amendment on fall ballots regarding property taxes. That legislation gives the General Assembly the power to cap increases in the property tax rates set by local governments, without setting an amount for the cap.
Democrats caution about future needs
Democrats worry about the future impact of capping tax rates.
Sen. Lisa Grafstein, a Raleigh Democrat, noted that flat taxes are regressive, and “leave us unprepared for the future.” She proposed a graduated tax rate.
Democratic Gov. Josh Stein called the income tax amendment proposal “a financial straightjacket that could wreak havoc on our public schools and public safety.”
And Sen. Sophia Chitlik, a Durham Democrat, called the proposal “a tax break for millionaires” because they would be included in the tax rate cap.
Senate Majority Leader Michael Lee, a New Hanover County Republican, said during floor debate that the state has had budget surpluses many years while reducing the income tax rate.
“Now is a good time to ask the voters, do you want a tax cap at 3.5%?” Lee said.
State revenue also comes from sales taxes and corporate income taxes.
The revised revenue forecast for the fiscal year ending June 30, released on Friday, includes $979 million more than was anticipated in March, before tax collections.
This story was originally published May 19, 2026 at 12:41 PM.
