AN ACT to impose a Seven percent income tax on income that exceeds one million dollars and to distribute those proceeds to the public school fund.

The General Assembly of North Carolina enacts:

SECTION 1.  G.S. 105‑153.7 reads as rewritten:

§ 105‑153.7.  Individual income tax imposed.

(a)        Tax. – A tax is imposed for each taxable year on the North Carolina taxable income of every individual. The tax shall be levied, collected, and paid annually. Except as otherwise provided in subsection (a1) subsections (a1) and (a2) of this section, the tax is a percentage of the taxpayer's North Carolina taxable income computed as follows:

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(a2)      Rate on High Income. – A tax is imposed for each taxable year on the North Carolina taxable income of every individual that exceeds one million dollars ($1,000,000) at a rate of seven percent (7%). The tax imposed under this subsection shall be levied, collected, and paid annually. The rate reduction trigger under subsection (a1) of this section shall not apply to the tax rate imposed under this subsection. Annually, the Secretary shall distribute the taxes collected under this subsection, less the Department of Revenue's allowance for administrative expenses associated therewith, to the State Public School Fund for allotment by the State Board of Education, on behalf of the counties, to local school administrative units on a per pupil basis in accordance with Article IX, Section 7(b) of the North Carolina Constitution. The Secretary may retain the Department of Revenue's cost of collection, not to exceed one hundred thousand dollars ($100,000) a year, as reimbursement to the Department.

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SECTION 2.  This act is effective for taxable years beginning on or after January 1, 2026.