House Bill 384 would create a new North Carolina income tax deduction for the federal basic pay of enlisted Army National Guard and Air National Guard members in grades E-1 through E-5. The deduction would apply to taxable years beginning on or after January 1, 2025, and would allow eligible Guard members to subtract the full amount of that federal basic pay from state taxable income.
The bill also revises the distribution formula for remaining sports wagering tax proceeds. Under the amended statute, 20% would continue to go to specified collegiate athletic departments, 29% would go to the North Carolina Major Events, Games, and Attractions Fund, and the remainder would be credited to the General Fund. The bill is effective in part on July 1, 2025, for the wagering revenue changes, while the tax deduction takes effect for 2025 tax years.
Impact
The bill would amend G.S. 105-153.5(b) to add a new state income tax subtraction for certain enlisted National Guard pay, reducing taxable income for qualifying service members and lowering state revenue associated with those taxpayers. It would also amend G.S. 105-113.128(5) to change how sports wagering tax proceeds are allocated, shifting the remaining proceeds to the General Fund and adjusting the percentage directed to the Major Events, Games, and Attractions Fund. The affected parties include enlisted National Guard members, the Department of Revenue, state budget recipients of wagering proceeds, and the listed UNC system and other public universities that receive sports wagering distributions.
Sentiment
Based on the bill text and available context, the measure appears generally favorable toward military service members and fiscally oriented in its use of gaming revenue. The bill’s title and structure suggest support for a targeted tax benefit for lower-ranking enlisted National Guard personnel, paired with a revenue reallocation from sports wagering proceeds to help offset state fiscal impacts. There were no recorded committee transcripts or votes provided, so no formal opposition or support statements are available in the supplied materials.
Contention
The main policy questions raised by the bill are likely to concern revenue effects and the reallocation of sports wagering proceeds. Potential supporters would include National Guard members and advocates for military tax relief, while possible concerns could come from budget stakeholders, recipients of sports wagering distributions, and institutions that rely on those funds. The bill also narrows the tax benefit to enlisted Army and Air National Guard members in grades E-1 through E-5, which may prompt questions about why higher ranks or other reserve components are excluded.