On April 1, the House Finance Committee gave a favorable report to bipartisan legislation (House Bill 83) that will eliminate the state income tax on military retirement pay.

“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), who is the primary bill sponsor. “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.”

Currently, 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 all military retirees living in North Carolina.

Rep. Szoka explained 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.”

Reps. John Bell (R-Wayne), John Bradford (R-Mecklenburg) and Diane Wheatley (R Cumberland) are also primary sponsors of the legislation, which now goes to the House Rules Committee.