New state laws alter campaigns, tax rates
RALEIGH (AP) — More than 20 new laws taking effect Wednesday in North Carolina will lower income tax rates, relax some campaign finance rules and increase charges for electric vehicle owners.
Significant portions of the tax and elections overhaul bills approved by the Republican-led General Assembly and signed by Gov. Pat McCrory will be implemented starting with the new year.
The tax changes don’t apply to 2013 individual income tax returns filed by millions early in the new year. But moving ahead the law consolidates three personal income tax rates of 6, 7 and 7.75 percent into one flat rate of 5.8 percent in 2014. Many deductions, exemptions and credits also are going away as the standard deductions for filers more than double.
The corporate income tax rate of 6.9 percent also now drops to 6 percent. The combined state and local sales tax — 6.75 percent in most counties — remains the same, but the full sales tax applies to a few more goods and services, including service contracts and live entertainment. The sales tax on modular and manufactured homes also is going up.
While photo ID requirements and other provisions in the new elections law will be implemented later or are being challenged in court, changes affecting donors and campaign advertising and expenses begin in January.
The maximum amount an individual donor or political action committee can give to a candidate committee or another PAC increases from $4,000 per election to $5,000. The increase, the first in more than 30 years, is reasonable, said Rep. David Lewis, R-Harnett, who helped shepherd the election law through the General Assembly and to McCrory’s desk.
“The cost and price of everything, including campaigning, (have) gone up since then,” Lewis said Tuesday, adding that candidates face increased difficulty to make their voice heard over the din of super PACs, which aren’t subject to similar limits. “There are many outside expenditure groups that weigh in to our state campaigns.”
Bob Hall with Democracy North Carolina, who supports the public financing of campaigns, said state leaders should be working toward diminishing the role of private money in campaigns, not increasing it. The higher cap helps but a small percentage of people who already give the maximum amount, Hall said.
“That’s not really what democracy is about,” Hall said. “It runs counter to the notion that elections are about more people participating.”
The per-election maximum also will now increase every two years, beginning in 2015, in line with inflation. The new law now only allows the candidate and the candidate’s spouse to give unlimited amounts to the candidate’s committee. The previous law also exempted the candidate’s siblings and parents.
Hall said he’s also worried about laws taking effect Wednesday that eliminate or scales back specific disclosures to the State Board of Elections previously required of independent groups and super PACs with commercials that identify specific candidates.
Also eliminated is North Carolina’s “Stand by Your Ad” law, which required candidates to identify themselves in a television or radio ad to say they sponsored the commercial. Candidates still will be required to include a photo of themselves in a TV ad along with type-written disclosure of who paid for the commercial.
Lewis said the “Stand by Your Ad,” requirement, which still remains in place for federal campaigns, “seemed to just be an unreasonable intrusion on campaign advertising that was bought and paid for with campaign funds.”
The election overhaul law requires in-person voters to show one of several forms of photo ID before casting a ballot starting in early 2016, but now registered voters who don’t have an acceptable card can apply for a free special ID card from the Division of Motor Vehicles.
People who own a plug-in electric vehicle as of Wednesday now must pay an additional $100 fee during the car’s initial registration or at its annual renewal. Legislators have said such fees are about fairness, since such a car pays no gasoline taxes, which are used for road-building. The new fee is expected to generate $120,000 for the Highway Fund during the 2014-15 fiscal year, according to the state budget.
Hunters or recreational fishermen also will be required in the new year to pay a $2 transaction fee for licenses purchased through independent agents.