Bill Summary for S 657 (2019-2020)

Summary date: 

Apr 9 2019

Bill Information:

View NCGA Bill Details2019-2020 Session
Senate Bill 657 (Public) Filed Wednesday, April 3, 2019
AN ACT TO EXPAND THE HOMESTEAD EXEMPTION AND CIRCUIT BREAKER.
Intro. by Mohammed, Foushee, Chaudhuri.

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Bill summary

Amends GS 105-277.1 (Elderly or disabled property tax homestead exclusion), which provides that the amount of the appraised value of the residence of an elderly and disabled homeowner equal to the exclusion amount is excluded from taxation. Establishes that if the owner is a State or federal retiree with at least 20 years of creditable service and the owner is a qualifying owner, as defined in existing law, the exclusion amount is the first $60,000 of appraised value of the residence plus any remaining appraised value of the residence that would result in the tax liability for the residence being greater than $1,000. Establishes that the exclusion amount for all other qualifying owners is calculated as being the greater amount from the following: (1) $25,000 or (2) an amount equal to (a) if there has not been a general reappraisal pursuant to GS 105-286 since the time the applicant became eligible for the exclusion allowed under this section, 50% of the appraised value of the residence, or (b) if there has been a general reappraisal pursuant to GS 105-286 since the time the applicant became eligible for the exclusion allowed under this section, an amount equal to the sum of (i) the difference between the appraised value of the residence and the appraised value of the residence determined pursuant to GS 105-286 as of January 1 of the year of eligibility, cumulatively adjusted according to the annual consumer price index until the year of the last general reappraisal conducted pursuant to GS 105-286 and (ii) 50% of the appraised value of the residence determined pursuant to GS 105-286 as of January 1 of the year of eligibility, cumulatively adjusted according to the annual consumer price index until the year of the last general reappraisal conducted pursuant to GS 105-286. (Previously, the exclusion amount was the greater of $25,000 or 50% of the appraised value of the residence.)

Amends GS 105-277.1(a2) (Income Eligibility Limit; now subsection (a3)), providing that for the taxable year beginning on July 1, 2020, the income eligibility limit is $35,000 for single applicants and $70,000 for married applicants residing with their spouses (previously, the income eligibility limit was $25,000). For taxable years beginning on or after July 1, 2021, the income eligibility limit is the amount for the preceding year, adjusted by the same percentage of this amount as the percentage of any cost-of-living adjustment made to the benefits under Titles II and XVI of the Social Security Act for the preceding calendar year.

Amends GS 105-277.1B (Property tax homestead circuit breaker), making conforming changes and providing that a permanent residence owned and occupied by multiple qualifying owners is entitled to full benefit of the property tax homestead circuit breaker notwithstanding that only one of them meets the length of occupancy and ownership requirements and age or disability requirements of this section (previously, multiple qualifying owners, other than husband and wife, were not granted the tax homestead circuit breaker unless all of the owners qualified and elected to defer taxes under this section).

Amends GS 105-277.1C (Disabled veteran property tax homestead exclusion), to set the exclusion amount at the first $100,000 of appraised value of the residence (was, previously the first $45,000). Adds hold harmless amount to the defined terms, adding that the term means the assessed value over $45,000 of a property excluded from taxation by the statute, multiplied by the applicable local tax rate. Also adds total hold harmless amount and defines the term to mean the hold harmless amounts for property excluded in the county and the hold harmless amount for property excluded in the cities located in the county. Establishes a new requirement for each county tax collector to notify, by September 1 of each year, the Secretary of Revenue of the county's total hold harmless amount; failure to notify the Secretary bars the county from receiving a reimbursement under the statute for the taxable year. Requires the Secretary to distribute to each county its respective total hold harmless amount on or before December 31 of each year. Provides for distribution to counties, government units, or special districts, as specified. Requires the Secretary to draw from collections received under Part 2, Individual Income Tax, of Article 4 to cover the cost of reimbursement and administration.

Effective for taxes imposed for taxable years beginning on or after July 1, 2020.

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