NC House Passes Bill to Eliminate State Income Tax on Military Retirement Pay
Updated: Jun 17, 2021
Raleigh, NC – With dozens of veterans looking on in the House Gallery, the North Carolina House of Representatives voted 100-5 on Wednesday to approve bipartisan legislation to eliminate the state income tax on military retirement pay.
House Bill 83 Eliminate Income Tax for Military Retirees is sponsored by Reps. John Szoka (R-Cumberland), John Bell (R-Wayne), John Bradford (R-Mecklenburg) and Diane Wheatley (R-Cumberland).
“The House passage of this legislation is yet another important step towards making North Carolina the most military friendly state in the nation,” said Rep. John Szoka (R-Cumberland), the primary bill sponsor. “I am thankful my colleagues in the House recognize it is time for North Carolina to join the majority of other states who provide this tax relief to those who have sacrificed and served our great nation.”
In North Carolina, military retirement pay is not taxed by the state if the retiree had five or more years of service as of August 12, 1989. House Bill 83 will extend the tax exemption to allow all retired service members, who served at least 20 years, to deduct any retirement pay they receive from the federal government. It would also allow survivors of service members to deduct any survivor benefits they received from the federal government.
“Our veterans and their families have given up so much to protect the freedoms and liberties that we hold dear,” said North Carolina Lieutenant Governor Mark Robinson, who is a strong supporter of the legislation. “It is why I am so proud of what our North Carolina House has been able to achieve in the passage of House Bill 83. This bill allows us to give back to those who have been willing to give their all.”
Currently, thirty-two other states do not tax military retirement pay, which includes nine states that have zero state income tax.
Rep. Szoka added that, “By eliminating the income tax on military retirement pay, we will also make our state more competitive in attracting and recruiting these highly trained and qualified military retirees. This is an essential component to developing and growing North Carolina’s talented workforce.”
More than 100,000 retired military service members call North Carolina home. Studies show that 2,000 military retirees moving to the state will offset the cost of the legislation within just a few years.
“These men and women dedicated their lives to serving our nation,” said House Majority Leader John Bell (R-Wayne). “ This bill shows our appreciation for their sacrifice while also ensuring our state is an attractive place for military families to retire. We strive to be the most military friendly state in the county and this legislation shows our commitment to those who serve in uniform."
The legislation now moves over to the North Carolina Senate for consideration.