Senate Gas Tax Bill Also Targets Homeowners with Tax Hike
The Charlotte Observer takes a closer look at the “gas tax” bill, which in addition to raising the gas tax, also hikes taxes for homeowners. The change would force anyone who had part of their mortgage loan forgiven, often due to malpractice on the part of lenders, to report the amount forgiven as income on state taxes. The change is expected to cost nearly 4,000 homeowners almost $14 million.
A section of the bill dealing with income tax changes would require taxpayers to count as income any portion of their mortgage indebtedness forgiven by a lender.
Take somebody who owed $200,000 on a home and had been caught up in the mortgage meltdown. Say the lender forgave $50,000 of the loan. Under the bill, that $50,000 would be counted as taxable income in North Carolina. The Internal Revenue Service would not count it.
Democratic Sen. Joel Ford of Charlotte tried to remove it from the bill, and leave state law conform to federal law.
“We should provide the same tax relief to North Carolina taxpayers and put more money in pockets,” he said. “Not conforming to the federal law on this amounts to kicking a person when they’re down.”
For procedural reasons, Ford’s proposed amendment never came up for a vote.
Democrats say up to 4,000 people could be affected. Legislative staffers estimate the change would result in $14 million in revenue for the state.
The Senate tentatively passed the bill 36-14 along part lines. Final approval is expected Thursday before it would head to the House.