North Carolina moves to tax downloads, online buying, income

RALEIGH — Legislative leaders reached a basic agreement on a tax plan late Wednesday that limits a proposed 2 percent income tax surcharge to North Carolinians who earn more than $250,000 a year.

"There's a broad agreement," said Bill Holmes, spokesman for House Speaker Joe Hackney, a Chapel Hill Democrat. "There are still a couple small things they want to talk about. It's an agreement in principle."

The plan otherwise resembles a compromise that fell apart last week but that includes a 1-cent increase in the sales tax, a 10-cent-per-pack increase in the cigarette tax, higher taxes on alcohol and a tax on digital downloads and online purchases. It raises $990 million for the state.

The proposal fell apart last week because the 2 percent surcharge, which is applied to the taxpayer's income tax liability, was imposed on everyone.

Gov. Beverly Perdue and some lawmakers objected to raising the income taxes on middle- and lower-income North Carolinians. Perdue was briefed on the revised plan by legislative leaders Wednesday morning.

"She is basically on board," said Sen. David Hoyle, a Gaston County Democrat and co-chairman of the Senate Finance Committee.

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