Is your state still fully taxing retirement pay? MOAA National serves in an advisory capacity for state-specific issues such as income tax exemption. Please contact your local MOAA council as state legislation must originate at the state level.

The North Carolina MOAA chapters are among several groups leading a fight to exempt the retirement pay of all government employees, including servicemembers, from that state's income tax.

The bill would even the playing field for those retirees, some of whom already receive an exemption under the so-called “Bailey Amendment,” a North Carolina Supreme Court decision to exempt state taxes for government employees who served at least five years before 1989. This is the latest effort to equalize the exemption.

“I think we have the 'haves' and the 'have nots,'” said Col. Jeri Graham, USA (Ret), who serves on MOAA's board of directors. “It's a fairness thing. We have a lot of people in North Carolina that were able to get that benefit. Now we have all the new people that are retiring from all those federal, state, and local jobs that don't have that benefit. We're trying to equalize that benefit for everyone.”

[RELATED: MOAA's Military State Tax Report Card (link for Premium/Life Members)]

The Equal Tax Treatment of Government Retirees bill is backed by the several groups working as a coalition called The 4th Branch. The coalition was formed in 1995 and earned nonprofit status in 2000.

The bill is expected to be introduced during the state's next legislative session. Meanwhile, Graham is calling on all government retirees in North Carolina, as well as current military and federal employees, to sign a petition in support of the bill and to contact their state legislators and ask for their support.

“It's been a challenge,” Graham said. “We are pushing this every year because we believe it's the right thing to do.”

North Carolina touts its status as a military-friendly state, with presence of active duty troops across all branches. This bill, Graham said, could bolster that reputation.

The bill could entice servicemembers who serve at installations in North Carolina to stay after leaving service and could attract veterans from other states that don't offer a tax break. According to research funded by The 4th Branch, retirees bring about $2.50 into state economy for every $1 they are exempt from paying on in state taxes.

“People are making choices,” Graham said. “We love our military in this state and we want to keep them in this state and we want to attract them to live in this state. They are great citizens. People have choices, and part of what they consider is the financial benefit of moving to this state versus that state.”

Amanda Dolasinski is MOAA's staff writer. She can be reached at amandad@moaa.org. Follow her on Twitter @AmandaMOAA.