NC Income and Sales Tax Changes Considered
The North Carolina Senate Finance Committee is reviewing a plan to cut income and sales taxes while instituting new sales taxes on certain services.
For income taxes, the top rate would drop from 7.75% to 7.5%, while the lowest rate would decrease from 6% to 5.25%. The calculation of income taxes would also be made easier, using the federal adjusted gross income without having to make further changes to determine the NC taxable income. Credits would be allowed for charitable contributions and home mortgages, and the child tax credit would increase $25 to $125.
Corporate income tax rates, currently 6.9%, would be reduced over a two year period to 4.5%, but limited liability companies would be required to pay franchise taxes. The could be bad news for for LLC owners, would are currently required to $200 annually to the state for the privilege of operating the company.
And, to the benefit of professionals and other business owners, state and local privilege licenses would be eliminated.
Finally, the state sales tax would be lowered from 6.75% to 6.00%. Many counties, however, have local rates than are higher. Sales taxes would be instituted on heretofore untaxed services/items such as building repairs, extended warranties, and downloaded music and software.
I have written and written to everyone concerning EVERYONE paying taxes - when I say EVERYONE I mean even illegal immigrants that get by without paying anything - the reason is very simple - the employer uses an IRS form 1099-misc which requires the employer (contractors-lawn care - farmers etc) to issue a form that only states how much was paid to the sub contractor - no taxes -Fed-State-Med- SSN - are taken out - if this form was eleiminated and employers were required to take out and pay these taxes quarterly-monthly - and in some cases bi-monthly - immagine what an impact that would make to help cover our short fall as well as make sure everyone pays their part for education and health care - of course it would have an impact on the amount of money that is sent home to Mexico as it would remain here -MJ
What is the NC tax situation with respect to conversion of an IRA to a Roth in 2010. Can the income be distributed over the yrs 2011 and 2012 as in the case of Fed taxes?
RESPONSE: I'm not aware that NCDOR has issued any guidance on this issue.