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NC Budget and Tax Center

In case this news hasn’t reached readers, North Carolina residents should expect to begin paying sales taxes on their online purchases through Amazon.com (Amazon), the online retailer, beginning next month. Come February 1st North Carolina will become the 20th state in which Amazon collects a sales tax on online purchases.                

Since Amazon does not have physical, brick-and-mortar stores or operations here in North Carolina, the company is not required by law to collect a sales tax on online sales made to North Carolina residents. North Carolina taxpayers are supposed to voluntarily report their online purchases on their state income taxes and pay a “use tax”, but it appears that few taxpayers do so considering the significant loss of revenue for the state, as well as for cities and counties.

The NC Department of Revenue estimates that the state loses as much as $214 million in online sales taxes each year, according to a news report. Read More

NC Budget and Tax Center

This month, taxpayers receiving their paychecks are seeing changes in their take-home pay.  Some will see more, some less since the tax plan passed last year delivers income tax cuts depending on individual taxpayer circumstances.

The benefits from the new tax law will accrue primarily to the wealthiest taxpayers and profitable corporations. In total, the tax plan passed last year reduces revenue by nearly $525 million over the next two years. The foregone investments for our communities that will result from these tax cuts will impact us all.

Consider what could have been done to improve the classroom experience of our students in K-12 public schools if policymakers hadn’t chosen to cut taxes for the wealthy and profitable corporations. These dollars could have been used to provide a package of investments in public education such as:

  • Keeping 1 in 5 teacher assistant jobs in FY15
  • Doubling current funding for textbooks in FY15 Read More
NC Budget and Tax Center

If you dressed a wolf in sheep’s clothing, would you then believe it was a sheep?

The leadership in the General Assembly and its allies hope you will. Proponents of the state’s new tax law are trying desperately to justify it, most recently by citing pennies in tax cuts for low- and middle-income North Carolina families in 2011, hoping you’ll ignore the harm the recently passed package will cause.

Most of the 2013 tax plan goes into effect this year, and for the vast majority of North Carolinians the picture is bleak.

The Budget and Tax Center’s analysis of the plan shows that when you consider all the tax changes and compare them to previous tax law, on average, people making under $84,000 a year – the bottom 80% of North Carolina taxpayers will see their taxes go up.

In a new analysis, proponents of the plan are touting the 2011 expiration of a temporary sales tax increase as evidence that low- and middle-income earners are better off.  They fail to note that lawmakers allowed a surcharge on high-income earners to expire (a tax cut of around $200 million) in 2011 too.  The expiration of the surcharge will actually generate an even greater tax cut for high-income taxpayers.

There are other key facts that get soft-pedaled in the Locke Foundation’s analysis. Read More

NC Budget and Tax Center

More than 1 million jobless workers were deserted by lawmakers who failed to extend the federal unemployment benefits program that expired in late December. This came three weeks after the Congressional Budget Office concluded that extending emergency unemployment compensation through the end of 2014 would positively impact economic growth and job creation in the short term. Despite this report, conservative members of the US Senate blocked efforts yesterday to extend unemployment insurance at a time when long-term unemployment is at record high-levels.

To no surprise, conservatives are insisting that the extension of benefits be paid for by cuts in other programs, including those that offer support to low-income and jobless families. In exchange for their vote, some conservative Senators want to bar immigrant families from claiming the Child Tax Credit—a measure known as the Ayotte Amendment. This tactic is misguided and counterproductive. Read More

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The N.C. Education Lottery had an unusual sales pitch today, telling players that hitting it big in 2014 will mean less taxes and more winnings

In a tweet sent out this afternoon, the official state lottery Twitter account pointed out that the state’s new flat 5.8 percent income tax, which eliminated a progressive tax structure where the poorest pay a lower percentage of income taxes than those with higher incomes, is a bonus for lottery winners.

lotterytweet

The tweet links to two news releases put out by the state-run lottery that showcases how a Rocky Mount man with a $1 million Powerball ticket and a firefighter in the western part of the state are paying $7,000 to $12,000 less in income taxes in 2014 than they would have if they won in 2013.

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