N.C. legislation could cut taxes for servicemen

North Carolina might soon take another step toward becoming the most military-friendly state in the nation.

Next week, the N.C. House Committee on Military, Veterans and Indian Affairs will consider a bill that could give a big tax break to current and retired military personnel. The bill was proposed Feb. 7 by Rep. Bill Culpepper, D-Chowan.

If approved, it will exempt members of the armed forces from paying income taxes on their military compensation — or for Army Reserve and National Guard members, their active-duty pay.

The bill, which is retroactive to Jan. 1, 2004, also exempts most retirement pay and survivor benefits. It applies to all members of the armed forces, guard members and reservists.

According to a fiscal note attached to the bill, there were about 25,500 military personnel who legally lived in North Carolina in 2001.

If the bill passes the military committee, it would then be seen by the House Finance Committee.

Rep. Rick Glazier, D-Cumberland, a member of both committees, said he expects to be seeing a lot of this bill soon, even though the state faces a $1.3 billion budget surplus.

“There is a lot of support for it on the military committee,” he said. “Passage of the bill will do nothing but benefit the state with regard to (base relocations and closings).”

Lt. Gov. Beverly Perdue has been placed in charge of ensuring that this year’s BRACs, ordered by the U.S. Department of Defense, go over smoothly.

Glazier added that the bill’s support is “greatly bipartisan.” Co-sponsors come from both parties.

Ramona Joyce, spokeswoman for the American Legion’s national office, said the organization endorses this type of legislation.

“We certainly applaud states that go the extra mile to improve the quality of life for military personnel,” she said.

Local veterans also back the measure. “We wholeheartedly support it,” said Frank Stancil, department adjutant of the American Legion in Raleigh.

Rep. Tim Moore, R-Cleveland, also introduced a bill in February for tax exemptions for military personnel. Moore’s bill exempts only current, active-duty members who are either full-time officers, enlistees or draftees — as opposed to Culpepper’s, which covers retiree pay, too.

“It is a good policy to provide additional benefits for people who are retired members of the armed forces as well as current members,” Glazier said.

“There are other states which have tax credits or exemptions, and if we are going to be the most military-friendly state in the country, which we are trying, this (bill) needs to be a part of our agenda.”

Contact the State & National Editor at stntdesk@unc.edu.