Elimination of NC Estate Tax on the Table 
Tax Committee Addresses a Top Concern of
Small Business Within First Week of Long Session

On January 29, just five days into the Long Session of the N.C. General Assembly, a legislative subcommittee met to consider whether to lower North Carolina’s estate tax rate—or eliminate the tax altogether.  This subcommittee, comprised of Sen. David Hoyle, Dept. of Revenue Secretary Norris Tolson, and representatives of the business community, is one of three that make up the State and Local Fiscal Modernization Study Commission.

The Commission is charged with reviewing North Carolina’s tax structure and making recommendations to the state legislature on tax modernization.  It is expected to make some recommendations as early as spring.  In putting North Carolina’s estate tax on the table, the Commission has the opportunity to address a top concern for North Carolina small business.

At 18 “listening meetings” held across the state in the fall, North Carolina businesses of all sizes identified their most pressing economic concerns for our State Chamber.  The two issues cited most often by businesses—particularly small businesses—were taxes and healthcare costs.  Data collected on Business Ballots, both at area meetings and through broadcast fax and email, also showed that taxes and healthcare costs are top concerns for business owners and executives in our state.

Our State Chamber’s first annual CEO poll reinforced the feedback received from North Carolina Chamber members in meetings and on Business Ballots.  Our survey of hundreds of North Carolina business owners identified taxes as “the most important issue facing businesses in North Carolina today”.  Among the taxes identified by business owners as hindrances to job creation and economic growth was the estate tax.  This is no surprise considering that small businesses make up the vast majority of businesses in North Carolina.

The estate tax has long been a wheelhouse small business issue because it can prevent privately owned companies from passing assets on to the next generation.  In many cases, families must sell their businesses because of taxes, which prevents small business growth and costs North Carolina jobs.  In some cases, privately owned companies are forced to double in size just to pay for the added tax.

“Since the majority of new jobs in our state come from small businesses,” said NCCBI President/CEO Lew Ebert, “repealing the estate tax would send the right message to entrepreneurs and small business owners already operating here.”  Roughly 75 percent of North Carolina businesses have less than 10 employees.  Approximately 85 percent have less than 20.  When you consider those with fewer than 100 employees, it’s about 95 percent of North Carolina businesses.

“Capital goes where it is treated best,” said Ebert. “Should lawmakers choose to respond to top concerns of North Carolina business owners by eliminating the estate tax, it will go a long way toward ensuring that our state maintains the best business climate in America, and will send a powerful message to small businesses in North Carolina that they are highly valued and recognized as key to job creation and economic growth here.”

The Small Business & Entrepreneurship Council’s 2006 “Small Business Survival Index” ranks North Carolina 40th among the 50 states and District of Columbia in terms of public policy climate for small business and entrepreneurship. The Index analyzes 29 government-imposed or government-related costs affecting small businesses and entrepreneurs to produce ratings for states, including taxes.  The 2006 Index marked the eleventh year that the Council has produced its state rankings.

Several NCCBI Board members serve on the State and Local Fiscal Modernization Study Commission, including incoming chair, John Atkins; past chair Sue Cole; Rusty Harris; and Randy Fraser.

Register Now for the 65th NCCBI Annual Meeting!

The 65th NCCBI Annual Meeting will truly be an historic one.  The date for this year’s meeting is March 14, 2007, and it will be held again this year at the Durham Marriott at the Civic Center.  Register now online at http://nccbi.org.  Or, you can click here to register online: http://www.nccbi.org/mx/hm.asp?id=home.

If you share our State Chamber’s mission, which is to make sure that North Carolina is—and remains—the best state in the nation in which to do business, then you won’t want to miss this year’s event.  Come witness the exciting transformation of our State Chamber!

NCCBI Annual Meeting Agenda

This year, we are launching a new and improved format for our annual meeting that will combine a morning Legislative Briefing with our luncheon event—followed by a grassroots lobbying event for local chambers and their members.

Legislative Briefing:
9:30 a.m. to 11:30 a.m.
Hear from national economists and pollsters about our State Chamber’s first annual CEO poll and Annual Competitiveness Index (a benchmark “competitive scorecard” that will compare North Carolina to other states in 90 different metrics).  Receive a 2007 State of Business in North Carolina report.  (This briefing replaces NCCBI’s traditional Legislative Conference, which will prevent our customers from the western, piedmont and eastern regions of the state from having to leave their businesses for day-long trips to the Raleigh area twice in a two-month period of time.)

Power Lunch:
Noon to 2 p.m.
Our keynote speaker will be Ken Lewis, president & CEO of Bank of America. We’ll also present our Distinguished Citizenship citation to Thomas W. Bradshaw, Jr., managing director of Citigroup Corporate and Investment Banking. We’ll present our Public Service citation to former Chief Justice I. Beverly Lake.

Business Speaks at the Capital:
2 p.m. to 5 p.m.
We’ll cap of this year’s Annual meeting off with a grassroots lobbying event at the state legislature in Raleigh where we’ll visit lawmakers on behalf of local Chambers of Commerce and their members to connect our policy objectives with employer constituents.

We look forward to seeing you at the NCCBI Annual Meeting.  Register online now at http://nccbi.org or http://www.nccbi.org/mx/hm.asp?id=home.