House Bill 1073, titled the Fair Share for Public Schools Act, would create a new 7% North Carolina individual income tax rate on taxable income above $1 million. The bill amends the state income tax statute to add a separate high-income bracket that applies only to income over that threshold, while leaving the existing tax structure in place for income below it. The new rate would apply annually beginning with taxable years starting on or after January 1, 2026.
The bill directs the revenue collected from this new high-income tax, after administrative costs and limited collection expenses, into the State Public School Fund. Those funds would then be distributed by the State Board of Education to local school administrative units on a per-pupil basis, consistent with the state constitution’s school funding provisions. The Department of Revenue would be allowed to retain up to $100,000 per year for collection costs, with the remainder dedicated to public schools.
HB1073 would amend North Carolina’s individual income tax law by adding a new 7% surtax on income over $1 million and creating a dedicated revenue stream for public education. It would not change tax rates for most taxpayers, but it would increase the tax burden on very high-income individuals and redirect those receipts to the Public School Fund. The bill would also require the Department of Revenue and the State Board of Education to administer the new revenue distribution and school allotment process.
The available record shows no committee transcript, vote tally, or recorded floor debate, so there is no direct evidence of formal support or opposition in the materials provided. Based on the bill’s title and structure, it appears framed as a school-funding measure aimed at directing additional revenue to public education. The absence of recorded votes or discussion means sentiment cannot be measured from legislative history here, though the proposal is likely to appeal to supporters of increased school funding and progressive taxation while drawing concern from opponents of higher taxes on high earners.
The main point of contention is likely the creation of a new 7% tax rate on income above $1 million, which would be viewed by critics as a tax increase on high-income taxpayers and by supporters as a targeted funding mechanism for schools. Another likely issue is whether dedicating this revenue to the Public School Fund is an effective or sustainable way to finance education, especially given the bill’s limited administrative cost cap and its exclusion from the rate-reduction trigger. No specific objections or amendments are documented in the provided materials.