North Carolina Considers Repeal of State Estate Tax

February 20, 2013

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This state tax is levied in addition to the federal tax, which is 40 percent for estates valued over $5.25 million in 2013. The federal level was established via the American Taxpayer Relief Act of 2012, passed in 2013 to avert the fiscal cliff. The state tax can be used as a deduction against the federal tax, leaving and effective rate of about 50 percent in tax liability for North Carolina residents, instead of the 40-percent tax liability residents of most of the rest of the country realize.
North Carolina would join most other states in having repealed this tax.
McGuireWoods Consulting and McGuireWoods, LLP, were involved in efforts to repeal the Virginia estate tax in 2006.
Tennessee is slated to repeal their state level estate tax in the coming years. Should North Carolina fail to repeal its tax, the Tar Heel state will be the sole southeastern US state that levies the tax on family farmers and small business owners.
Repeal of this tax is being considered individually through legislation in the House, although it may be part of a larger tax reform package being considered this year.
For more information on this, please contact Steve Horton, Harry Kaplan or Kerri Burke.