New North Carolina Laws and Policies Taking Effect on January 1, 2025
RALEIGH, N.C. – As we ring in the new year, North Carolinians can expect changes not just in their resolutions but in the laws and policies that govern the state. From tax updates to shifts in liability insurance and campaign finance rules, here are the key changes taking effect on January 1, 2025:
1. Income and Corporate Tax Rate Reductions
North Carolina is continuing its phased tax reductions:
- Personal Income Tax: The individual income tax rate will drop from 4.5% in 2024 to 4.25% in 2025. By 2026, it will fall further to 3.99%.
- Corporate Tax: The corporate income tax rate will decrease from 2.5% in 2024 to 2.25% in 2025, ultimately eliminating the tax entirely by 2030.
2. State Employee Health Plan Changes
- A New Administrator: Aetna will take over as the third-party administrator for North Carolina’s State Health Plan, replacing Blue Cross NC after more than 40 years.
- This transition impacts teachers, state employees, retirees, and their dependents and will involve updates to the network of healthcare providers.
3. Increased Liability Insurance Minimums
- Under Senate Bill 452, the minimum liability insurance required for drivers in North Carolina is increasing:
- From $30,000 to $50,000 per person.
- From $60,000 to $100,000 per accident.
- These changes also apply to uninsured drivers, offering greater protection for all motorists.
Gov. Cooper vetoed the legislation because of other provisions in the bill about school athletics, adding that the “legislation includes important auto insurance changes that will help provide more protection for North Carolina motorists,” Cooper said in a press release.
4. Alcohol Tax Exemption for High-Value Liquor Sales
- Senate Bill 527 introduces an excise tax exemption for liquor sales exceeding $50,000, with a maximum tax cap of $1,000 for qualifying sales. This legislation, signed by Governor Cooper in 2024, aims to promote larger-scale transactions in the alcohol industry.
5. New Election Rules and Campaign Finance Changes
- Provisional Ballot Deadlines: County boards of elections must now finish counting provisional ballots by 5 p.m. on the third business day after an election. Supporters argue this provides quicker results, while opponents cite concerns about resource constraints.
- Campaign Finance Flexibility: Party headquarters funds can now be used for legal actions, and contributions from corporations, business entities, and labor unions are allowed for this purpose.
6. Broader Legislative Impacts of Senate Bill 382
- Judicial Appointments: In 2025, the General Assembly can appoint two special superior court judges. The speaker of the House will nominate one judge, and the president pro tempore of the Senate will nominate the other.
- Hurricane Relief Fund: The bill allocates $227 million to the Hurricane Helene relief fund, though the specifics of the distribution remain unclear.
The third Helene relief bill, Senate Bill 382, had a rocky road to becoming law, facing intense backlash from legislators (including some Republicans), the public, and the governor’s veto. While it included some appropriations for recovery, much of the bill outlines power shifts in state leadership. Parts of the bill are under litigation from Gov. Roy Cooper and Gov.-elect Josh Stein.
Looking Ahead
These changes mark just a portion of the legislative updates set to shape the year ahead in North Carolina. To see a comprehensive list of laws going into effect, visit the North Carolina General Assembly website.
For now, be prepared for these significant shifts, whether it’s filing your taxes, managing your health coverage, or understanding new rules for insurance and elections.