Senate tax bill would ask voters to lower North Carolina’s income tax cap
RALEIGH, N.C. — A new Senate bill would ask North Carolina voters whether to lower the maximum income tax rate allowed under the state constitution from 7% to 3.5%.
Senate Bill 1080, titled “Lower Taxes for All NC,” was filed May 13 and re-referred May 14 to the Senate Finance Committee. If approved there, it would go next to the Senate Rules and Operations Committee. The bill is sponsored by Republican Sens. Michael Lee, Benton Sawrey and Lisa Barnes, with several additional Senate Republicans listed as sponsors.
The bill would amend Section 2 of Article V of the North Carolina Constitution, which currently says the rate of tax on incomes “shall not in any case exceed seven percent.” The proposed amendment would replace that limit with “three and one-half percent.”
If passed by the General Assembly, the proposed constitutional amendment would be placed on the statewide general election ballot on Nov. 3, 2026. The proposed ballot language would ask voters whether they support a constitutional amendment “to keep the State income tax rate from being raised higher than three and one-half percent (3.5%).”
Because the measure is a constitutional amendment, it would not require the governor’s signature if approved by the required legislative margins. Voters would make the final decision.
The proposal comes as lawmakers continue budget and tax discussions during the short session. Supporters are likely to frame the bill as a taxpayer protection measure that would prevent future tax increases. Opponents may argue that lowering the constitutional cap could limit the state’s ability to respond to future budget needs, including education, public safety, transportation, health care and disaster recovery.
If voters approved the amendment, it would take effect after certification by the State Board of Elections and apply to taxable years beginning on or after Jan. 1, 2027.
The Senate Finance Committee is scheduled to take up S1080 at 2 p.m. Tuesday, May 19, in room 544 of the Legislative Office Building.
Editor’s note: This article was drafted with the assistance of artificial intelligence and was reviewed and fact-checked by a member of the NC Political News editorial team before publication.
