North Carolina Income Tax Cap Amendment (2018)

Elections in North Carolina, 2018

• General election: Nov. 6
• Voter registration deadline: Oct. 12
• Early voting: Oct. 17 - Nov. 3
• Absentee voting deadline: Nov. 6

• Online registration: No
• Same-day registration: No
• Voter ID: No
• Poll times: 6:30 a.m. to 7:30 p.m.

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North Carolina Income Tax Cap Amendment
Election date November 6, 2018
Topic Taxes
Status a Approved
Type Constitutional amendment	Origin State legislature
List of North Carolina measuresNorth Carolina Income Tax CapNorth Carolina Judicial SelectionNorth Carolina Appointments to Elections BoardNorth Carolina Marsy's LawNorth Carolina Right to Hunt and FishNorth Carolina Voter IDSubmit

The North Carolina Income Tax Cap Amendment was on the ballot in North Carolina as a legislatively referred constitutional amendment on November 6, 2018. The ballot measure was approved. On February 22, 2019, a judge ruled that the amendment was invalid in NAACP and Clear Air Carolina v. Moore and Berger. Upon appeal, a preliminary ruling overturned the injunction against the enforcement of the voter ID requirement. It also allowed the court ruling to go forward.

A "yes" vote supported lowering the maximum allowable state income tax rate from 10 percent to 7 percent.

A "no" vote opposed lowering the maximum allowable state income tax rate from 10 percent to 7 percent.

Election results

North Carolina Income Tax Cap Amendment
Result		Votes	Percentage
Yes		2,094,924	57.35%
No		1,557,707	42.65%

Results are officially certified.

Source

Aftermath

  

Lawsuit overview
Issue: Whether the state legislature that was ruled to be an illegal racial gerrymander can refer the constitutional amendment to the ballot?
Court: Wake County Superior Court
Ruling: Ruled in favor of plaintiffs, striking down the Voter ID Amendment and the Income Tax Cap Amendment as invalid; appealed and lower court ruling overturned; appealed to North Carolina Supreme Court
Plaintiff(s): North Carolina NAACP and Clean Air Carolina	Defendant(s): Senate President Phil Berger and House Speaker Timothy K. Moore
Plaintiff argument: Since some lawmakers were elected from districts that a federal court ruled were unconstitutional racial gerrymanders, the existing state legislature was a usurper legislature and could not place constitutional amendments on the ballot.	Defendant argument: Despite the ruling concerning a gerrymander, the General Assembly of North Carolina still had the authority to enact legislation, including the referral of constitutional amendments to the ballot.

  Source: Wake County Superior Court

NAACP and Clear Air Carolina v. Moore and Berger

On August 6, 2018, the North Carolina NAACP and Clean Air Carolina sued the General Assembly of North Carolina in the Wake County Superior Court. The plaintiffs asked for four constitutional amendments—the Legislative Appointments to Elections Board and Commissions Amendment, Judicial Selection for Midterm Vacancies Amendment, Voter ID Amendment, and Income Tax Cap Amendment—to be removed from the ballot. The case was not decided before the election; voters approved the Voter ID Amendment and the Income Tax Cap Amendment, and voters rejected the Legislative Appointments to Commissions Amendment and the Judicial Selection for Midterm Vacancies Amendment.

The NAACP and Clean Air Carolina said that since some lawmakers were elected from districts that a federal court ruled were unconstitutional racial gerrymanders, the existing North Carolina State Legislature was a usurper legislature. Therefore, the plaintiffs argued that the constitutional amendments should be invalidated.

Senate President Phil Berger (R-30) responded, "We predicted Democratic activists would launch absurd legal attacks to keep the voters from deciding on their own Constitution, but this one really jumps the shark. This absurd argument – which has already been rejected in federal court – is a sad and desperate attempt to stop North Carolina voters from joining 34 other states in requiring identification when casting a ballot."

On February 22, 2019, Judge Bryan Collins ruled in favor of the NAACP and Clean Air Carolina, striking down the Voter ID Amendment and the Income Tax Cap Amendment. Judge Collins said, "Thus, the unconstitutional racial gerrymander tainted the three-fifths majorities required by the state Constitution before an amendment proposal can be submitted to the people for a vote, breaking the requisite chain of popular sovereignty between North Carolina citizens and their representatives. … Accordingly, the constitutional amendments placed on the ballot on November 6, 2018 were approved by a General Assembly that did not represent the people of North Carolina."

Rev. Dr. T. Anthony Spearman, president of the NC NAACP, responded to the ruling, stating, "We are delighted that the acts of the previous majority, which came to power through the use of racially discriminatory maps, have been checked. The prior General Assembly’s attempt to use its ill-gotten power to enshrine a racist photo voter ID requirement in the state constitution was particularly egregious, and we applaud the court for invalidating these attempts at unconstitutional overreach." Senate President Berger also responded, saying, "We are duty-bound to appeal this absurd decision. The prospect of invalidating 18 months of laws is the definition of chaos and confusion. Based on tonight’s opinion and others over the past several years, it appears the idea of judicial restraint has completely left the state of North Carolina."

On February 25, 2019, the defendants—Senate President Phil Berger and House Speaker Timothy K. Moore—appealed the case to the North Carolina Court of Appeals.

On April 29, 2019, the North Carolina NAACP petitioned the North Carolina Supreme Court—instead of the North Carolina Court of Appeals—to directly review the case. In mid-June, the North Carolina Supreme Court declined to hear the case before it was heard by the court of appeals.

On July 5, 2019, a panel of three judges ruled 2-1 to temporarily overturn the lower court's injunction against the enforcement of the amendment but allow the appeal to continue. The ruling allows the implementation of the voter ID requirement while the case is being resolved.

Arguments were heard in the appeal case on October 31, 2019.

On September 15, 2020, the court of appeals reversed in a 2-1 decision Judge Collin's ruling that had invalidated the constitutional amendments. Judge Chris Dillon said, "It is simply beyond our power to thwart the otherwise lawful exercise of constitutional power by our legislative branch to pass bills proposing amendments." The NAACP appealed the decision to the North Carolina Supreme Court on October 21, 2020.

On August 19, 2022, the North Carolina Supreme Court ruled that the state legislature may not have the authority to place state constitutional amendments on the ballot because lawmakers were elected from a district map that was found to be "unconstitutionally racially gerrymandered." In the 4-3 decision, the majority opinion said, "[T]he potentially transformative consequences of amendments that could change basic tenets of our constitutional system of government warrant heightened scrutiny of amendments enacted through a process that required the participation of legislators whose claim to represent the people’s will has been disputed." The court ordered the case back to the Superior Court for review.

Federal lawsuit

On December 31, 2019, U.S. District Judge Loretta C. Biggs ruled in favor of the NAACP and blocked the implementation of the voter ID requirement for the March 3 primary elections. In the conclusion of Biggs' opinion, she said, "[T]he Court concludes that Plaintiffs have demonstrated a clear likelihood of success on the merits of their discriminatory intent claims for at least the voter ID and ballot-challenge provisions of S.B. 824." Judge Biggs upheld the provision of S.B. 824 that increase the number of poll-observers from each party.

In response to the ruling, Senate President Berger said, "The voters saw the need for voter ID and approved the constitutional amendment. The legislature, acting on the will of the people, enacted one of the broadest voter ID laws in the nation. Now this lawsuit, and last-minute ruling, have sowed additional discord and confusion about the voting process."

On December 2, 2020, a 4th U.S. Circuit Court of Appeals panel unanimously reversed the 2019 injunction against the voter ID law. Circuit Judge Julius Richardson wrote, "A legislature’s past acts do not condemn the acts of a later legislature, which we must presume acts in good faith." Republican House Speaker Tim Moore (R) responded to the ruling saying, "Now that a federal appeals court has approved North Carolina’s voter ID law and constitutional amendment, they must be implemented for the next election cycle in our state."

Overview

What changes did the measure make to the North Carolina Constitution?

The ballot measure lowered the North Carolina Constitution's maximum allowable state income tax rate from 10 percent to 7 percent. Therefore, the state government was prohibited from increasing the state income tax rate above 7 percent. As of 2018, the personal income tax rate in North Carolina is 5.499 percent.

How did the constitutional amendment get on the ballot?

The North Carolina State Legislature referred the constitutional amendment to the ballot. Most legislative Republicans (97 percent) voted to pass the amendment, while most legislative Democrats (95 percent) opposed the amendment. The state Senate first passed the amendment to lower the cap on the income tax rate to 5.5 percent, just above the 5.499 percent in effect in 2018. However, the House Finance Committee changed the cap to 7 percent, and the state House approved the changes. The state Senate concurred on June 26, 2018. Senate President Phil Berger said, "It would better if we could cap the income tax at 5.5 percent. I think that would be better. But I also think that moving the maximum income tax rate from 10 percent down to 7 percent is progress, just not as much. That is as far as the House would go."

Sen. Jeff Jackson (D-37) said the amendment, along with the five others on the ballot in 2018, "are bad-faith attempts to drive up conservative turnout at the polls." House Speaker Tim Moore responded, "You never know what will affect turnout in any way. Anything we can do for all voters to go vote I think is always a good thing."

Text of measure

Ballot title

The ballot title was as follows:

“

[ ] For [ ] Against Constitutional amendment to reduce the income tax rate in North Carolina to a maximum allowable rate of seven percent (7%)

”

Ballot summary

The ballot summary was as follows:

“

Cap Maximum State Income Tax at 7% The current maximum personal and corporate income tax rate in our State Constitution is 10%. This proposed amendment makes the new limit 7%. This proposed amendment does not reduce your current taxes. It does not change the current individual income tax rate of 5.499%, and it does not change the current corporate income tax rate of 3%. Instead, it limits how much the state income tax rate could go up. This proposed amendment applies only to state income taxes. It does not affect sales taxes, property taxes, or federal taxes. Income taxes are one of the ways State government raises the money to pay for core services such as public education, public health, and public safety. The proposed amendment does not include any exceptions. Therefore, in times of disaster or recession, the State could have to take measures such as cutting core services, raising sales taxes or fees, or increasing borrowing.

”

Constitutional changes

See also: Article V, North Carolina Constitution

The measure amended Subsection (6) of Section 2 of Article V of the North Carolina Constitution. The following underlined text was added and struck-through text was deleted:

(6) Income tax. The rate of tax on incomes shall not in any case exceed ten seven percent, and there shall be allowed personal exemptions and deductions so that only net incomes are taxed.

Readability score

See also: Ballot measure readability scores, 2018

Using the Flesch-Kincaid Grade Level (FKGL and Flesch Reading Ease (FRE) formulas, Ballotpedia scored the readability of the ballot title and summary for this measure. Readability scores are designed to indicate the reading difficulty of text. The Flesch-Kincaid formulas account for the number of words, syllables, and sentences in a text; they do not account for the difficulty of the ideas in the text. The legislature and the NC Constitutional Amendments Publication Commission wrote the ballot language for this measure. The FKGL for the ballot title is grade level 15, and the FRE is 23. The word count for the ballot title is 19, and the estimated reading time is 5 seconds. The FKGL for the ballot summary is grade level 9, and the FRE is 55. The word count for the ballot summary is 154, and the estimated reading time is 41 seconds. In 2018, for the 167 statewide measures on the ballot, the average ballot title or question was written at a level appropriate for those with between 19 and 20 years of U.S. formal education (graduate school-level of education), according to the FKGL formula. Read Ballotpedia's entire 2018 ballot language readability report here.

Support

Supporters

Officials

• Sen. Phil Berger (R-26)
• Sen. Tommy Tucker (R-35)
• Sen. Andrew C. Brock (R-34)
• Sen. Jerry W. Tillman (R-29)
• Rep. Tim Moore (R-111)

Organizations

• Americans For Prosperity–North Carolina

Arguments

• Sen. Phil Berger (R-26), president pro tempore of the state Senate, stated, "North Carolina had some of the highest taxes in the Southeast when Democrats controlled the legislature. Legislative Republicans have substantially reduced the tax burden and put more money back into the pockets of hard-working families and businesses. With this amendment, voters can say no to a return to the days of spendthrift politicians, high taxes and multibillion-dollar deficits by placing this protection in our state constitution."
• Chris McCoy, state director of Americans For Prosperity–North Carolina, said, "AFP-NC strongly supports the Income Tax Cap amendment because it empowers voters to protect themselves from future tax hikes. If a 5.5 percent tax rate were bad for education, you would think we’d see some evidence of those ill effects right now, since our tax rate is currently at that level. But over the last five years, North Carolina has made consistent investments in education while lowering the economic burden on taxpayers. We support the income tax cap amendment, and we believe voters will too."

Opposition

Opponents

Officials

• Gov. Roy Cooper (D)
• Rep. Marcia Morey (D-30)

Parties

• North Carolina Democratic Party

Arguments

• Bruce Nelson, former CEO of Office Depot, stated, "In my opinion, imposing a constitutional tax cap is fiscally irresponsible, economically unsound and politically motivated by a North Carolina legislative body more concerned over the prospect of losing their supermajority in the next election cycle. It’s bad for business. It's bad for the economy. It's bad for the citizens of North Carolina."
• Keith Poston, president of the Public School Forum of North Carolina, said, "A typical voter is going to just read it and say, 'I want my taxes low,' and not understand the long-term impact of tying the hands of future legislatures. It could be devastating. Our schools are underfunded, and this will lock it in permanently by making it part of the state constitution. Any future legislature would have to amend the Constitution to make any fundamental change."
• Rep. Marcia Morey (D-30) said, "Voting for this amendment will not reduce anyone’s taxes. But restricting the amount of money the state can generate on a crisis like Hurricane Florence or a recession could be devastating and force local governments to raise property and sales taxes. Reducing the tax cap only ties the hands of future legislatures to respond to unanticipated crisis."

Campaign finance

Total campaign contributions:
Support:	$0.00
Opposition:	$9,266,902.46

See also: Campaign finance requirements for North Carolina ballot measures

There was no ballot measure committee registered in support of the measure.

By the People and Stop Deceptive Amendments were registered in opposition to the measure, as well as each of the other five amendments on the ballot in North Carolina. Therefore, the committees were raising and spending funds on each of the measures. Together, the committees had raised $9.27 million and expended $9.17 million.

Opposition

Committees in opposition to the Income Tax Cap Amendment Opposing committees Cash contributions In-kind services Cash expenditures By the People $1,100,342.25 $327,978.21 $1,092,925.74 Stop Deceptive Amendments $7,819,291.00 $19,291.00 $7,731,669.00 Total $8,919,633.25 $347,269.21 $8,824,594.74

Totals in opposition Total raised: $9,266,902.46 Total spent: $9,171,863.95

Donors

The following were the top six donors who contributed to the opposition committees:

Donor	Cash	In-kind	Total
Sixteen Thirty Fund	$3,500,000.00	$0.00	$3,500,000.00
State Engagement Fund	$1,650,000.00	$3,680.25	$1,650,000.00
NC Citizen’s For Protecting Our Schools	$775,000.00	$0.00	$775,000.00
America Votes	$750,000.00	$9,549	$759,549.00
Open Society Policy Center, Inc.	$500,000.00	$0.00	$500,000.00
National Education Association	$500,000.00	$0.00	$500,000.00

Methodology

To read Ballotpedia's methodology for covering ballot measure campaign finance information, click here.

Polls

See also: 2018 ballot measure polls

North Carolina Income Tax Cap Amendment (2018)
Poll	Support	Oppose	Undecided	Margin of error	Sample size
SurveyUSA October 2, 2018 - October 8, 2018	58.0%	21.0%	21.0%	+/-4.8	561
Note: The polls above may not reflect all polls that have been conducted in this race. Those displayed are a random sampling chosen by Ballotpedia staff. If you would like to nominate another poll for inclusion in the table, send an email to editor@ballotpedia.org.

Background

Measures limiting taxes in 2018

See also: Taxes on the ballot

In 2018, voters in six states considered ballot measures to cap, limit, or restrict types of taxes. In Oregon and Washington, voters decided ballot initiatives to prohibit governments from enacting taxes on groceries. Oregan voters rejected the grocery tax ban. In Washington, the measure was ahead by 5 percentage points with 64 percent of precincts reporting.

In Arizona, an initiative to prohibit new taxes or increased tax rates on services was approved. Voters in California defeated an initiated measure to require voter approval for the state legislature to impose, increase, or extend fuel taxes or vehicle fees in the future. It would have also repealed a gas tax increase passed in 2017.

Legislatures in Florida and North Carolina referred constitutional amendments capping taxes to the ballot and both were approved. Voters in Florida and Oregon also considered ballot measures to require supermajorities of the state legislature to increase taxes. In Florida, the measure was approved, and, in Oregon, it was defeated.

An additional initiative qualified for the ballot in California but was withdrawn after proponents agreed to a compromise bill with legislators to keep the initiative off the ballot. The initiative would have required a two-thirds vote of the electorate on all local taxes, including soda taxes. The compromise legislation prohibited local soda taxes until 2031.

Measure	Origin	Description	Status
Arizona Proposition 126	Initiative	Prohibits the state and local governments from enacting new taxes or increasing tax rates on services	a
California Proposition 6	Initiative	Requires voter approval for the state legislature to impose, increase, or extend fuel taxes or vehicle fees in the future	d
Florida Amendment 2	Legislature	Makes permanent the cap of 10 percent on annual nonhomestead parcel assessment increases set to expire	a
Florida Amendment 5	Legislature	Requires a two-thirds vote of each chamber of the state legislature to enact new taxes or fees or increase existing ones	a
North Carolina Amendment	Legislature	Lowers the maximum allowable state income tax rate from 10 percent to 7 percent	a
Oregon Measure 103	Initiative	Prohibits state and local governments from enacting taxes on groceries	d
Oregon Measure 104	Initiative	Requires a three-fifths vote of each chamber of the state legislature to increase revenue, such as via increasing taxes and decreasing tax exemptions	d
Washington Initiative 1634	Initiative	Prohibits local governments from enacting taxes on groceries	a

Personal income tax

See also: Personal income tax

North Carolina utilized a flat personal income tax rate of 5.499 percent in 2018.

The table below summarizes personal income tax rates for North Carolina and neighboring states in 2018.

Personal income tax rates, 2018
State	Tax rates		Number of brackets	Brackets
	Lowest	Highest		Lowest	Highest
North Carolina	5.499%		1	Flat rate
Georgia	1%	6%	6	$750	$7,001
South Carolina	0%	7%	6	$2,970	$14,860
Tennessee	3% on income from dividends and interest		1	Flat
Virginia	2%	5.75%	4	$3,000	$17,001
Note: For complete notes and annotations, please see the source below. Source: Tax Policy Center, "Individual State Income Tax Rates 2000-2017," accessed October 26, 2017

Path to the ballot

See also: Amending the North Carolina Constitution

In North Carolina, a constitutional amendment must be passed by a 60 percent vote in each house of the state legislature during one legislative session.

The amendment was introduced into the legislature as Senate Bill 75 (SB 75) on February 14, 2017. The Senate approved the amendment on March 14, 2017.

On June 28, 2018, the North Carolina House of Representatives took up the constitutional amendment, voting 73 to 45 to approve SB 75. The state House also voted to amend the bill, increasing the maximum taxable amount that the amendment would allow for from 5.5 percent to 7.0 percent. As the state House amended the bill, a concurrence vote was required in the state Senate.

The state Senate received the amended SB 75 on June 28, 2018, and voted to concur with the lower chamber's changes. The vote was 34 to 13 to pass SB 75.

Vote in the North Carolina House of Representatives June 28, 2018
Requirement: Three-fifths (60 percent) vote of all members in each chamber
Number of yes votes required: 72  a
	Yes	No	Not voting
Total	73	45	2
Total percent	60.83%	37.50%	1.67%
Democrat	0	44	1
Republican	73	1	1

Vote in the North Carolina Senate June 28, 2018
Requirement: Three-fifths (60 percent) vote of all members in each chamber
Number of yes votes required: 30  a
	Yes	No	Not voting
Total	34	13	3
Total percent	68.00%	26.00%	6.00%
Democrat	3	11	1
Republican	31	2	2

How to cast a vote

See also: Voting in North Carolina

Poll times

In North Carolina, polling places are open from 6:30 a.m. to 7:30 p.m. Eastern Time. Any voter who is standing in line at the time polls close must be permitted to vote.

Registration requirements

Check your voter registration status here.

To register to vote in North Carolina, each applicant must be a United States citizen and a resident of the county in which they are registering to vote for at least 30 days before the election. Applicants must be at least 18 years old by the time of the election. The North Carolina voter registration application is available online. Voter registration applications must be received by the county board of elections at least 25 days before the election. Voter registration services are also provided by the following agencies:

• North Carolina Department of Motor Vehicles
• Departments of Social Services (DSS)
• Departments of Public Health (WIC)
• Vocational rehabilitation offices
• Departments of Services for the Blind
• Departments of Services for the Deaf and Hard of Hearing
• Departments of Mental Health Services
• Employment Security Commission (ESC)

Automatic registration

North Carolina does not practice automatic voter registration.

Online registration

See also: Online voter registration

North Carolina has implemented an online voter registration system. Residents can register to vote by visiting this website.

Same-day registration

North Carolina allows same-day voter registration during the early voting period only.

Residency requirements

Prospective voters must reside in the county in which they are registering to vote for at least 30 days before the election.

Verification of citizenship

See also: Laws permitting noncitizens to vote in the United States

North Carolina does not require proof of citizenship for voter registration.

Verifying your registration

The North Carolina State Board of Elections allows residents to check their voter registration status online by visiting this website.

Voter ID requirements

North Carolina requires voters to present photo ID when voting.

Note: According to the Board of Elections website, "On April 28, 2023, the North Carolina Supreme Court reversed an injunction against implementation of photo ID legislation. As a result, photo ID laws enacted in 2018 and 2019 will be implemented moving forward, starting with the municipal elections in September, October, and November 2023. A separate federal case challenging the same laws is pending, but no injunction against the laws exists in that case." The injunction was issued on December 16, 2022.

The following documents were acceptable forms of identification as of May 2023:

• IDs that must be valid and unexpired, or expired for less than a year:
  • NC driver's license
  • Driver's license from another state (only accepted if voter registered with 90 days of the election)
  • Nonoperators ID card
  • U. S. passport
  • NC voter photo ID card
  • Student ID card issued by an eligible NC university or community college
  • Employee ID card issued by a state or local government entity (including schools)
• U.S. military ID card
• U.S. Veterans ID card issued
• Tribal enrollment card issued by a state or federally recognized tribe.
• Public assistance ID card issued by a U.S. department, agency, or entity

See also

2018 measures

• 2018 ballot measures
• Taxes on the ballot
• 2018 legislative sessions

North Carolina

• North Carolina ballot measures
• North Carolina ballot measure laws

News and analysis

• Ballot measure lawsuits
• Ballot measure readability
• Ballot measure polls

External links

• Senate Bill 75