House Bill 384 would create a new state income tax deduction for federal basic pay earned by enlisted members of the North Carolina Army National Guard or Air National Guard who hold ranks E-1 through E-5. The deduction would apply to taxable years beginning on or after January 1, 2025, and would allow eligible service members to subtract the full amount of that federal basic pay from North Carolina taxable income.
The bill also revises the distribution of sports wagering tax proceeds. It changes the allocation of remaining proceeds so that 20% continues to go to specified collegiate athletic departments, 29% would go to the North Carolina Major Events, Games, and Attractions Fund, and 50% would go to the General Fund. The bill is effective immediately upon becoming law except for the tax deduction and wagering revenue changes, which take effect on the dates specified in the bill.
HB384 would amend North Carolina’s personal income tax statute, G.S. 105-153.5, by adding a new subtraction for federal basic pay received by lower-ranking enlisted National Guard members. It would also amend the sports wagering revenue distribution statute, G.S. 105-113.128, changing how net proceeds are divided among collegiate athletics, the Major Events, Games, and Attractions Fund, and the General Fund. The bill would directly affect eligible National Guard service members, state tax administration, and the allocation of gambling-related revenue to state and university-related recipients.
The available context shows no recorded committee debate or vote history, so there is no direct evidence of support or opposition in the materials provided. Based on the bill’s contents, it appears designed to provide a targeted tax benefit to enlisted National Guard members while also redirecting sports wagering revenue to the General Fund, suggesting a mix of military-support and fiscal-policy goals. The bill had been reported favorably by committee substitute and then re-referred to Finance, indicating it was actively moving through the legislative process.
The most likely points of contention are the revenue effects and the reallocation of sports wagering proceeds. Supporters of the National Guard deduction may favor the targeted tax relief for lower-ranking enlisted members, while critics may question the cost to state revenue or the narrowness of the benefit. The sports wagering section could also draw scrutiny from stakeholders tied to collegiate athletics or the Major Events, Games, and Attractions Fund, since the bill preserves some distributions but changes the overall split and increases the General Fund share.