This week the NC Senate released their version of NC tax reform.
In fact, there are two competing Senate plans.
1) Sens. Bob Rucho and Bill Rabon, Senate Bill 677 (correction should be 669)
2) Sens. Dan Clodfelter and Fletcher Hartsell, Senate Bill 394
Link to article3) And the House Bill 998, previously discussed
Sales TaxThe current state sales tax is 4.75 percent, plus 2 percent (or more) by the local governments. The typcial total sales tax rate is 6.75 percent.
All three plans lower the sales tax rate, but expand the base by applying it to more services.
1) The Rucho plan would raise the state's portion to 5 percent while lowering the local portion to 1.5 percent. The plan expands it to the most services and applies sales tax to prescription drugs, which are not currently taxed. It also raises the tax on groceries from 2 percent to the full 6.5 percent.
2) The Clodfelter plan would lower the state's portion to 4.5 percent, lowering the overall rate to 6.5 percent also. The plan does not change the sales tax on prescriptions or groceries.
3) The House plan would keep the state portion of sales tax at 4.75 percent but would lower the local portion by 0.1 percent. And expands it to the least services. The plan does not change the sales tax on prescriptions or groceries.
Other notes:The Rucho plan (1) would remove tax exemptions for nonprofits and charities. It also would charge state income tax on Social Security benefits that are subject to federal taxes. That most often occurs when a retiree has multiple sources of income (not just SS).EngineerJim2013-06-03 11:54:08