Rep. Howard files bill in North Carolina House to revise state tax laws

A new bill filed by State Rep. Howard in the North Carolina House seeks to update and align state tax regulations with federal standards and address taxation on rentals and other areas, according to the North Carolina State House.

The bill, filed as HB 554 on March 27 during the 2025 regular session, was formally listed with the short title: ‘Rev Laws Tech Chngs/BBA Chngs/P2P Tax Parity.’

The following is our breakdown, based on the actual bill text, and may include interpretation to clarify its provisions.

In essence, this bill introduces several changes to the tax laws of North Carolina, effective at various dates primarily around January 1, 2025. It modifies personal income tax deductions relating to S Corporations and adjusts rules for net operating loss for individuals, estates, and trusts. The bill aligns state practices with federal partnership audit procedures, imposing tax obligations at the partnership level and detailing reporting responsibilities for federal adjustments. It expands the alternate highway use tax to include peer-to-peer car rentals, thereby aiming to establish tax parity in short-term car rentals. It revises the taxation for remotely sold goods exceeding specific sales thresholds and updates definitions and requirements for licensing related to vapor and alcohol products. Additionally, the bill allows for a gross receipts tax on the short-term rental of vehicles at the county and city level and clarifies rules around property taxable as burial property. Various administrative reforms and corrections, including penalties for frivolous tax return filings and changes to administrative processes, are also part of the legislation.

Of the three sponsors of this bill, Mitchell S. Setzer proposed the most bills (25) during the 2025 regular session.

Bills in North Carolina follow a multi-step process before becoming law. A lawmaker starts by filing a bill, which is assigned to a committee for review. The bill must be read three times in each chamber. If one chamber changes the bill after the other passes it, both must agree on the final version. Once both chambers approve the same bill, it goes to the governor, who has 10 days (or 30 if the legislature is not in session) to sign, veto, or let it become law without a signature.

You can read more about the bills and other measures here.

Howard graduated from Salem College in 2003 with a BA.

Howard, a Republican, was elected to the North Carolina State House in 2019 to represent the state’s 77th House district, replacing previous state representative Harry Warren.