Calling the budget passed by the North Carolina General Assembly “a step backwards for North Carolina,” Gov. Bev Perdue vetoed the bill. As previously reported (TAXDAY, 2011/06/07, S.29), the bill would have adopted federal adjusted gross income rather than federal taxable income as the starting point for computing North Carolina personal income tax, enacted a new net business income tax deduction, and retroactively modified the capital stock base for purposes of determining a taxpayer’s corporate franchise tax liability. However, absent from the bill was the extension of the temporary income tax surcharge and the temporary increase in the sales and use tax rates that were enacted in 2009. In her veto message, Gov. Perdue contended that “by extending less than a penny of the sales tax, North Carolina can avoid severe cuts to our schools and other crucial programs.”
Subscribers can view Gov. Perdue’s press release announcing the veto.
Press Release, Governor Bev Perdue’s Office, June 12, 2011