1. Taxation & Other Revenue at the State & Local Level J. Worley Civics

2. Revenue Through Taxation State Income Tax State Income Tax Tax paid by the people of NC to the state based on their percentage of annual income Tax paid by the people of NC to the state based on their percentage of annual income Corporate Income Tax Corporate Income Tax Requires corporations to pay a percentage of their yearly profits to the state Requires corporations to pay a percentage of their yearly profits to the state Sales Tax Sales Tax Places on goods and services purchased Places on goods and services purchased Tax is equal to a percentage of the price Tax is equal to a percentage of the price 7.5% on the dollar 7.5% on the dollar

3. Revenue Through Taxation (cont.) Excise Tax Excise Tax Taxes on specific “non-essential” goods Taxes on specific “non-essential” goods Ex.- Cigarettes/tobacco, alcohol Ex.- Cigarettes/tobacco, alcohol Inheritance Tax Inheritance Tax Tax that must be paid on what one inherits from someone who dies Tax that must be paid on what one inherits from someone who dies Estate Tax Estate Tax Tax paid on the value of what a person leaves behind when they die Tax paid on the value of what a person leaves behind when they die Must be done before transferred to the heir Must be done before transferred to the heir

4. Revenue Through Taxation (cont.) Property Tax Property Tax Taxes paid on owned items (Home & Land) Taxes paid on owned items (Home & Land) Usually imposed by county or municipal gov’ts Usually imposed by county or municipal gov’ts Tax assessments are done to determine amount owed Tax assessments are done to determine amount owed Estimated value of the property Estimated value of the property

5. Revenue Through Fees & Fines Licenses & Permits Licenses & Permits Monies paid to receive items of necessity or permission Monies paid to receive items of necessity or permission Ex.- Driver’s License, Fishing License, Building Permit Ex.- Driver’s License, Fishing License, Building Permit User Fees User Fees Charged to people who benefit from the use of public facilities Charged to people who benefit from the use of public facilities Disposal Fees Disposal Fees Paid for the removal of waste (Trash, Oil, etc.) Paid for the removal of waste (Trash, Oil, etc.)

6. Revenue Through Fees & Fines (cont.) Impact Fees Impact Fees Fee paid by a contractor when expanding or building something that helps pay for some of the costs the gov’t will have to take on Fee paid by a contractor when expanding or building something that helps pay for some of the costs the gov’t will have to take on

7. Other Ways to Get Revenue State & Municipal Bonds State & Municipal Bonds Issued in exchange for cash Issued in exchange for cash Pays the bond holder back with interest later Pays the bond holder back with interest later Intergovernmental Revenue Intergovernmental Revenue Money received by all levels of gov’t in form of grants, shared revenue, and special programs Money received by all levels of gov’t in form of grants, shared revenue, and special programs Federal Grants In Aid Federal Grants In Aid Federal money granted to the state to help take care of things like Medicaid, highways, disaster relief, & special community programs Federal money granted to the state to help take care of things like Medicaid, highways, disaster relief, & special community programs

8. Expenditure of the Revenue Gov’t has to stay on top of their finances just like everyone else does Gov’t has to stay on top of their finances just like everyone else does Money brought in to the state is spent to help the state in many different ways Money brought in to the state is spent to help the state in many different ways The NC Budget outlines the items that are needed to run the gov’t and needed to help aid the state in all aspects of its development The NC Budget outlines the items that are needed to run the gov’t and needed to help aid the state in all aspects of its development Budget shows possible expenditures & revenue Budget shows possible expenditures & revenue

9. Essential Questions 1. What are the different sources of revenue for NC Government? 2. How do states prioritize funding for various programs? 3. On what should NC spend a budget surplus?