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HB 384

An Act amending Title 18 (Crimes and Offenses) of the Pennsylvania Consolidated Statutes, in burglary and other criminal intrusion, further providing for the offense of criminal trespass.

2025-2026 Regular Session Introduced by Tarik Khan and 2 co-sponsors

North Carolina allows enlisted Army or Air National Guard (E-1 to E-5) to deduct federal basic pay under Title 37 from NC taxable income, lowering their state income tax.

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Bill Summary · HB 384

HB 384 — National Guard Tax Deduction for Federal Pay (Summary)

Status note: committee substitute reported favorably (Reptd Fav Com Substitute). Introduced Nov. 12, 2024. Effective provisions take effect for taxable years beginning on or after Jan. 1, 2025 (and a separate timing note for a sports‑wagering allocation change: July 1, 2025).

Purpose and intent

The bill is intended to provide state income tax relief to lower‑rank enlisted members of the National Guard by allowing them to deduct their federal basic pay from North Carolina taxable income. A committee substitute also reallocates certain sports‑wagering tax proceeds to increase the General Fund share.

Key provisions

  • Adds a new deduction to G.S. 105‑153.5(b):
    • Allows deduction of "the total amount of federal basic pay under Title 37 of the United States Code" received by enlisted members of the Army or Air National Guard holding ranks E‑1 through E‑5.
    • The original draft limited the deduction to members who reside in North Carolina; the committee substitute removes that residency limitation so the deduction applies to qualifying enlisted members generally (per the later edition text).
  • Includes an additional provision (committee substitute) adjusting sports‑wagering tax distributions:
    • Sets allocations from the net proceeds: 20% to listed public institutions (for collegiate athletics), ~29% to the North Carolina Major Events, Games, and Attractions Fund, and the remaining proceeds to the General Fund.
    • The sports‑wagering allocation change is effective July 1, 2025, and applies to net proceeds credited on or after that date.

Who is affected

  • Primary beneficiaries: enlisted members of the Army or Air National Guard with ranks E‑1, E‑2, E‑3, E‑4, or E‑5 who receive federal basic pay under Title 37.
  • Secondary effects: state individual income taxpayers and state budget/General Fund (through lost revenue from the deduction and offsetting changes in sports‑wagering distributions).

Fiscal and administrative impact

  • Revenue effect: The deduction will reduce state taxable income for qualifying Guard members, lowering their state income tax liabilities and reducing General Fund revenue. The fiscal note(s) are not included here; the magnitude depends on the number of eligible service members and total basic pay amounts for E‑1 to E‑5 ranks.
  • Administration: Taxpayers would claim the deduction on state returns; tax administration changes are likely minimal (identify and validate amounts reported as federal basic pay).
  • The sports‑wagering redistribution increases the General Fund share (by reducing the portion routed elsewhere), partially offsetting revenue losses from the deduction depending on amounts involved.

Effective dates and procedural aspects

  • Deduction: effective for taxable years beginning on or after January 1, 2025.
  • Sports‑wagering allocation change: effective July 1, 2025, applying to net proceeds credited on or after that date.
  • Legislative status: introduced and moved through committee as a favorable committee substitute. (Readers should consult the official legislature website for the bill’s final enacted status and any enrolled/chaptered act text.)

Implementation notes / scope

  • The deduction explicitly references "federal basic pay under Title 37" — it is limited to basic pay and does not by plain language include bonuses, special/variable pay, or non‑basic allowances (e.g., housing, subsistence) unless otherwise interpreted by tax guidance.
  • If eligibility is limited to residents in earlier drafts, practitioners should confirm the final enrolled language (committee substitute removed the residency clause in later text).

For the precise statutory text, revenue estimates, and final enrollment or veto history, consult the official bill file and enacted statute posting on the North Carolina General Assembly website.

Compiled from official sources — confirm details with the bill’s official record.

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