- Republicans introduced SB 1080 to cut the constitutional income tax cap from 7% to 3.5%.
- The proposal requires three-fifths legislative approval to appear on the November 2026 general election ballot.
- The measure acts as a long-range constitutional guardrail rather than an immediate reduction in current tax rates.
(NORTH CAROLINA) — North Carolina Senate Republicans filed Senate Bill 1080, the Lower Taxes for All NC measure, to ask voters in the November 2026 general election whether to cut the state’s constitutional income tax cap from 7% to 3.5%.
Lawmakers were set to discuss the proposal on Monday as Republicans tied the amendment to a broader tax agenda that has already pushed the state’s flat personal income tax rate lower. The current rate stands at 3.99% and is scheduled to fall to 3.49% in 2027.
Sen. Lisa Barnes, Republican of Nash County, Sen. Michael Lee, Republican of New Hanover County, and Sen. Benton Sawrey, Republican of Johnston County, filed the bill. If the measure clears the legislature, voters would decide whether to lock the lower ceiling into the state constitution.
North Carolina procedure requires a proposed constitutional amendment to win three-fifths approval in both chambers of the General Assembly before it can reach the ballot. Only after that step would the question go before voters in November 2026.
The proposal sits inside the budget framework announced by Senate Leader Phil Berger, Republican of Rockingham County, and House Speaker Destin Hall, Republican of Caldwell County. That places the tax-cap debate inside the central budget negotiations of the session, not on a separate track.
The numbers show why the amendment has drawn attention. North Carolina’s present constitutional cap is 7%, while the flat personal income tax rate is already below that at 3.99%, with another scheduled drop to 3.49% in 2027.
If voters approve the amendment, the ceiling for any future state income tax increase would drop to 3.5%. That would leave a far narrower gap between the rate allowed by the constitution and the rate lawmakers have already set in statute.
North Carolina voters last changed the cap in 2018, when they approved an amendment lowering it from 10% to 7%. Senate Bill 1080 would ask them to cut it again, this time by half.
The proposal does not present itself as an immediate rate cut. Joseph Harris, fiscal policy analyst at the John Locke Foundation, described it instead as a long-range restriction on how high future lawmakers could set the tax.
“Lowering North Carolina’s constitutional income tax cap from 7% to 3.5% would be a major taxpayer protection,” Harris said. “It would set a stronger constitutional guardrail and give voters a choice on whether state income tax rates should be allowed to rise above 3.5%.”
Harris’s description highlights the structure of the proposal. Senate Bill 1080 would not itself set the annual personal income tax rate at 3.5%; it would lower the constitutional maximum to that level, limiting how far a future legislature could go without another constitutional change.
That distinction matters in the mechanics of state tax law. Statutory rates can change through the ordinary lawmaking process, while the constitutional income tax cap sets the outer limit that lawmakers cannot cross unless voters approve another amendment.
Republicans have framed the measure as part of a tax policy that already points downward. The state’s current 3.99% flat rate sits near the proposed cap, and the scheduled move to 3.49% in 2027 would place the statutory rate just below the ceiling in Senate Bill 1080.
Under that design, the amendment would not immediately move the tax rate from 3.99% to 3.5%. Instead, it would set a constitutional boundary slightly above the rate now scheduled for 2027.
Backers also placed the measure in political terms that extend beyond the current budget cycle. By sending the question to the ballot, they would hand the final decision to statewide voters rather than keeping it solely inside the legislature.
The bill’s title, Lower Taxes for All NC, points to that political message. The legal change in the text is narrower and more specific: a revision to the constitutional income tax cap from 7% to 3.5%.
Because the change would amend the constitution, the threshold inside the legislature is higher than for ordinary legislation. Winning three-fifths approval in both chambers means Republican leaders would need to assemble the supermajority support required to move the question onto the ballot.
Berger and Hall’s inclusion of the measure in their budget framework gives the proposal leadership backing from both chambers. Barnes, Lee and Sawrey supplied the formal sponsorship in the Senate, placing their names on one of the session’s clearest tax questions.
Each part of the proposal turns on a separate stage. Lawmakers first decide whether Senate Bill 1080 advances. If it wins the required supermajorities, voters then decide in November 2026 whether the constitution should set the lower cap.
The earlier amendment offers the closest point of comparison available in the legislature’s recent history. In 2018, voters agreed to lower the cap from 10% to 7%, showing that tax limits written into the constitution have already gone before the electorate once in the past decade.
Senate Bill 1080 would ask voters to move further in the same direction. A drop from 7% to 3.5% would shrink the constitutional room for future rate increases far more sharply than the current gap allows.
The practical effect of that narrower margin is visible in the state’s existing rate schedule. At 3.99% today, North Carolina is already close to the proposed cap, and the scheduled 3.49% in 2027 would come within one-hundredth of a percentage point of the new ceiling.
That alignment between the scheduled statutory rate and the proposed constitutional ceiling helps explain why Harris called the plan a guardrail. The amendment would codify a limit near the level lawmakers already plan to reach, rather than force an immediate rewrite of the current rate.
Still, the measure would leave voters with a constitutional question, not a routine budget vote. If approved, any future push to raise the state income tax above 3.5% would run into a constitutional barrier unless voters agreed to change the document again.
Monday’s discussion marked the opening step in that process. Whether Senate Bill 1080 advances, which committee takes it up, and how leaders move it through the chamber will determine whether the Lower Taxes for All NC proposal becomes a ballot fight in November 2026.
The measure leaves North Carolina with a direct question that lawmakers cannot settle alone: after lowering the cap once in 2018, should the state cut the constitutional income tax cap again, this time from 7% to 3.5%.
