Estate Planning

Governor Perdue's Tax Proposal

By Gregory Herman-Giddens

Yesterday North Carolina Governor Beverly Perdue revealed her proposed tax plan, which is designed to raise $1.6 billion in taxes.  Here are some of the highlights:

Income Taxes

• Reduce individual income tax rates, except for a two-year "emergency surcharge" on single taxpayers with income over $500,000 and married taxpayers with income in excess of $1 million.
• Reduce the corporate income tax from 6.9% to 5.9% beginning in 2011.
• Increase the gross premium tax paid by insurance companies to 2.25%.
• Stop the corporate income tax transfer to the public school capital fund.
• Apply the franchise tax to limited liability companies.
• Repeal privilege license taxes.

Sales Taxes

• Increase state sales tax from 6.75% to 7.75% through September 2011.  Then rate would then decrease to 6.5%.
• Tax warranties, installations, repairs and some personal services.
• Tax recreation and entertainment, such as movies, concerts and amusement parks.
• Tax more online sales, courier services, and storage fees.
• Tax luxury services such as chartered jets and cosmetic surgery.
• Increase cigarette tax by 50 cents a pack, to 85 cents.
• Increase taxes on alcoholic beverages.

Tax Credits

• Small business tax reduction
• Expanded college savings credit
• Create homebuyer's credit

Compare this plan to the Senate and House proposals. 

Full post as published by North Carolina Estate Planning Blog on July 08, 2009 (boomark / email).