States Reconsider Death Taxes

Estate Tax

North Carolina repealed its intangible, inheritance and gift taxes within the last decade or so, but still maintains an estate tax with an exemption equal to the federal amount (currently $5.12 million).  These changes have made North Carolina more appealing to wealthy individuals, but our relatively high income tax still drives some folks to Florida, which has no income tax (or estate tax).  A few of my clients have changed their domicile to Florida in order to save income taxes, particularly with regard to sale of a business or other event where a great deal of capital gain is realized.

Other states, such as our neighbor to the West, Tennessee, are also looking a repealing certain taxes to prevent flight of of wealthy residents to other states.  See this Wall Street Journal article.  Tennessee does not tax earned income, however, which might make it appealing to highly paid professionals who spend most of their income!
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