Governor Perdue’s Tax Proposal

NC Income Tax

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
Address: 1414 Raleigh Rd Ste 203, Chapel Hill NC 27517
Phone: 919.636.0950 | Toll Free: 800.201.0413 | Fax: 919.493.6355 |