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Tax negotiations at deadlock, Senate moves forward alone

The Senate is moving ahead with its plans to cut taxes after negotiations with the House reached a deadlock.

Senate leader Phil Berger said a proposal introduced Monday in the Finance Committee is the final offer at a compromise. He said the new bill moves substantially toward the House's position on a number of issues, such as not taxing Social Security, allowing a limited real estate tax breaks and retaining local governments ability to impose privilege taxes.

But major differences remain. The Senate plan still phases out the corporate income tax, which the House lowers to 5.4 percent. The Senate plan also still caps nonprofit's ability to get a sales tax refund, which the House plan doesn't touch. It also shrinks the state franchise tax and eventually replaces it with a business privledge tax, which the House doesn't do.

Berger said the latest version of the tax bill -- H998 -- will hit the Senate floor Tuesday and Wednesday for a vote. He said House lawmakers saw a similar outline last week but the two chambers "reached a point where continued discussions are probably not going to modify things that much if at all." The House is not holding full sessions this week. If it doesn't agree to the final Senate plan, the two sides could begin negotiating again in a conference committee.

Rep. David Lewis, the lead House tax negotiator, is not in Raleigh this week. His office referred questions to House Speaker Thom Tillis' office. A spokesman did not immediately return a message seeking reaction.


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