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Bill Summary · SB 233

SB 233 — "Make Corporations Pay What They Owe." (North Carolina)

What the bill would do (plain language)

SB 233 repeals the statutory provision that phased out the State’s corporate income tax under Session Law 2021‑180, Section 42.2. In short: it stops the previously scheduled reduction/elimination of the corporate income tax and leaves the corporate tax structure in place (i.e., corporations would continue to be subject to the tax rather than benefiting from the scheduled phaseout).

Main purpose / intent

The bill’s stated objective is to prevent or reverse the previously scheduled decline of corporate income tax collections so that corporations continue to pay the corporate income tax that otherwise would have been reduced under the phaseout statute.

Key provisions

  • Repeal: Section 42.2 of S.L. 2021‑180 (the corporate income tax phaseout provision) is repealed in its entirety.
  • Effective date: The act becomes effective upon enactment (i.e., when signed into law).

The bill does not amend tax rates, change tax computation rules, or create new taxes — it simply removes the statutory authority that had been reducing corporate tax liability over time.

Who would be affected

  • Directly affected: Corporations doing business in North Carolina that would have benefited from the phaseout (C corporations and other entities subject to the State corporate income tax). If the phaseout is repealed, those entities will not receive the scheduled tax reductions.
  • Indirectly affected: Businesses that compete with or buy from corporations, employees (through potential downstream effects on wages/employment), and state-funded programs (through changes to state revenue availability).

Likely fiscal and policy impacts

  • State revenue: Repealing the phaseout would retain (or increase relative to the scheduled reduction) corporate income tax receipts compared with the statutory phaseout baseline. Net fiscal effect depends on the magnitude and timeline of the previously scheduled reductions.
  • Business climate: Businesses expecting reduced tax burdens from the phaseout may face higher-than-anticipated taxes, which could affect investment, hiring, pricing, or location decisions.
  • Budget planning: State budget forecasts and appropriations that assumed the phaseout will need to be adjusted; the change could ease near-term revenue constraints but may face political or economic tradeoffs.

Procedural/status notes

  • Introduced in the North Carolina Senate (bill text shows a simple two‑section act).
  • The act text states it is effective when it becomes law (i.e., upon the governor’s signature).

Implementation / administrative considerations

  • No administrative complexity is imposed on the Department of Revenue beyond continuing to collect corporate income tax under existing law; no new rate schedules or filing changes are included in the bill.
  • Any prior rules or guidance issued in anticipation of the phaseout may need to be rescinded or updated.

Bottom line

SB 233 is a narrowly written statutory repeal: it halts the previously legislated corporate income tax phaseout. Its immediate legal effect is straightforward (removal of the phaseout), while its fiscal and economic effects depend on the timing and scope of the phaseout that would have occurred and how businesses and the State respond.

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

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