Unexpected Surplus Would Trigger Lower Tax Rates

RALEIGH — The tax reform law passed by the General Assembly in 2013 — lowering personal income tax rates, establishing a flat tax, and reducing corporate income tax rates — included a trigger provision that would cut lower corporate tax rates even more if tax collections exceed revenue projections. If tax collections continue to come in at or above the levels forecast today, the corporate income tax rate would drop from 5 percent to 4 percent on Jan. 1, 2016. If next year’s collections exceed projections, another trigger would kick in, dropping the rate by an additional percentage point on Jan. 1, 2017.