North Carolina Amendment (income tax cap): Lower the constitutional cap on the state income tax rate from 7% to 3.5%
What it does. This amendment to the North Carolina Constitution would lower the State income tax rate from a maximum of 7% to a maximum of 3.5% beginning January 1, 2027. The Fiscal Research Division says the cap would apply to both personal and corporate income tax. It sets a ceiling, not a rate. Under the amendment the legislature could not go above 3.5% without voters approving another constitutional amendment. The legislature referred it as Senate Bill 1080, which passed the Senate 30-18 and the House 73-46, along party lines. [1] [2] [3]
Official ballot question. Constitutional amendment to keep the State income tax rate from being raised higher than three and one-half percent (3.5%). [1] [2]
If you vote yes
A FOR vote would lower the constitutional maximum state income tax rate from 7% to 3.5% beginning January 1, 2027. [1] [2]
If you vote no
An AGAINST vote would leave the constitutional maximum at 7%. [1] [2]
What it would cost
The General Assembly’s Fiscal Research Division estimates “no fiscal impact.” State law already schedules the personal income tax rate at 3.99% in 2026, and the May 2026 revenue forecast expects it to fall to 3.49% in 2027 and 2.99% in 2028 and after, under the cap. The corporate rate is set at 2% in 2026 and 2027, 1% in 2028 and 2029, and 0% in 2030 and after. The note adds that if revenue fell short of the statutory triggers and the rate stayed at 3.99%, “the 3.5% maximum allowable income tax rate would become binding and require a reduction to the personal income tax rate.” [2]
Both sides
Strongest case for
Sen. Michael Lee (R), the sponsor, said “Our tax reforms have produced more than a decade of strong revenue growth while letting people keep more of what they earn, and this amendment locks in that progress.” [3]
He said “This is their decision to make, and it’s a chance to put a real, lasting protection in the constitution for every taxpayer in the state.” [3]
Ballotpedia lists the Republican Party of North Carolina, Americans for Tax Reform and the National Federation of Independent Businesses among supporters. [3]
Strongest case against
Gov. Josh Stein (D) called the amendment “a con, a cynical shell game and a millionaire protection cap.” [3]
The NC Budget & Tax Center said “A limit on the income tax rate won’t keep total state and local taxes low,” and that states with income tax limits “tend to rely more on sales taxes, property taxes, and fees.” [3]
The Sierra Club of North Carolina said the amendment “would have no near-term effect, as state law already mandates that the personal income tax rate will be lowered to 3.49% starting in 2027,” but would “tie the hands of future state legislators.” [3]
What neither side is saying
Context that bears on what this measure does or who it affects but that the arguments above do not address. These are sourced facts, not arguments for or against the measure.
- 2018 precedent. Voters last decided an income tax cap amendment in 2018, when they approved lowering the maximum rate from 10% to 7%, 57.35% to 42.65%. [3]
- Another vote would be required. Ballotpedia says the state government would be prohibited from raising the rate above 3.5% without voter approval of another constitutional amendment. [3]
Editorial context, not the opinion of We Elect. Each point is a fact we found in a source we opened and read; where sources disagree or data are missing, we say so. How we choose these.
Follow the money
Contributions reported by committees registered to support or oppose Amendment (income tax cap). Major donors are those who gave $100,000 or more; where fewer than three did, up to five of the largest listed donors giving $5,000 or more are shown.
Supporting (Yes)
Total raised —
No committee registered.
Opposing (No)
Total raised $59,306
Committee
- NC By the People $59,306
At least one of these committees also campaigns on North Carolina Amendment (photo ID), North Carolina Amendment (property tax limit), so its money cannot be split by measure.
Major donors
No major donors reported.
Reported contributions through Oct. 2, 2026, as compiled by Ballotpedia from state filings; the source lists each side’s top donors, not every donor. Figures are reported contributions and may be updated as new reports are filed. Amounts are rounded to the nearest dollar. Official filings: North Carolina State Board of Elections, campaign finance.
Sources
- Official Summary Explanation of 2026 Constitutional Amendments (press release; copy published by the Beaufort County Board of Elections) — North Carolina Legislative Services Officer (Official summary explanation, 2026-08-20)
- Legislative Fiscal Note, S.B. 1080 (First Edition), Lower Taxes for All NC — North Carolina General Assembly, Fiscal Research Division (Official fiscal note, 2026-05-19)
- North Carolina Reduce Income Tax Rate Cap from 7% to 3.5% Amendment (2026) — Ballotpedia (Reference (quotes supporters and opponents), accessed 2026-10-28)
Editorial summary of arguments made by others, not the opinion of We Elect. Last reviewed 2026-10-28. How we write both sides.
We Elect is a Brunner Creative site. Editorial summary of arguments made by others, not the opinion of We Elect. Each side is written to be the strongest case its supporters would recognize, and every claim is tied to a source we opened and read.