Most of you have seen steps by various jurisdictions to close their budget gaps. In different situations, jurisdictions have pursued tax rate increases, stricter enforcement of existing laws, changes in the tax base, amnesty programs, etc. Over the last week, I've seen two local jurisdictions take opposite approaches to increasing revenues.
First, North Carolina recently announced an increase in the local sales tax rate for Duplin and Robeson Counties. The increase is 0.25% making the new local rate 2.25% and the new combined state and local rate 8%. Look for additional rate increases as we head into 2011 as the beginning of the year is one of the most common periods for new rates to be effective.
On the flipside, the City of Birmingham, Alabama recently announced a sales tax amnesty program that runs through November 30, 2010. The program includes sales tax, occupational tax, sellers use tax, consumers use tax, lease tax, business license liability, and interest with the waiver of penalty. This program applies to registered and non-registered tax payers alike. As I've previously stated, expect additional amnesty programs as states look to close their budget gaps.
Now I won't claim to be an expert in the local politics in these two scenarios, but I love amnesty programs in general. They tend to promote a more business friendly environment. I walk away feeling better about someone giving me something (waiver of penalty for example) vs. wanting something more from me (increased tax rate). Either way, expect both of these programs to increase local revenues.