GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1991

S	1 

SENATE BILL 825

Short Title:  Allow New Inheritance Tax Credits.	(Public)
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Sponsors: Senator Daniel.
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Referred to:  Finance.
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April 24, 1991

A BILL TO BE ENTITLED
AN ACT TO ALLOW INHERITANCE TAX CREDITS FOR PROPERTY TRANSFERRED TO NONRELATIVES AND COLLATERAL RELATIVES.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 105-5 reads as rewritten:
"§ 105-5. Rate of tax – Class B.
(a)	 Where the person or persons entitled to any beneficial interest in such property shall be the brother or sister or descendant of the brother or sister, or shall be the uncle or aunt by blood of the person who died possessed as aforesaid, at the following rates of tax (for each one hundred dollars ($100.00) or fraction thereof) of the value of such interest:
First  $5,000	 4 percent
Over $5,000 and to $10,000	 5 percent
Over $10,000 and to $25,000	 6 percent
Over $25,000 and to $50,000	 7 percent
Over $50,000 and to $100,000	 8 percent
Over $100,000 and to $250,000	10 percent
Over $250,000 and to $500,000	11 percent
Over $500,000 and to $1,000,000	12 percent
Over $1,000,000 and to $1,500,000	13 percent
Over $1,500,000 and to $2,000,000	14 percent
Over $2,000,000 and to $3,000,000	15 percent
Over $3,000,000	16 percent
(b)	An inheritance tax credit of four hundred fifty dollars ($450.00) is allowed against the tax imposed by this Article on the transfer of property to a Class B beneficiary.  This credit is allowed to Class B beneficiaries in the following order:
(1)	Persons who are less than 18 years old, and persons who are at least 18 years old and who are single, are unable to support themselves because of mental or physical incapacity, and either are members of the decedent's household or, because of their mental or physical incapacity, live in an institution.
(2)	Other Class B beneficiaries.  The status of a beneficiary is determined as of the date of the decedent's death.
When two or more beneficiaries are equally entitled to the credit, the credit shall be allocated among those beneficiaries on a pro rata basis according to their tax liability.  The credit allowed by this subsection may not exceed the amount of tax imposed by this Article."
Sec. 2.  G.S. 105-6 reads as rewritten:
"§ 105-6. Rate of tax – Class C.
(a)	Where the person or persons entitled to any beneficial interest in such property shall be in any other degree of relationship or collateral consanguinity than is hereinbefore stated, or shall be a stranger in blood to the person who died possessed as aforesaid, or shall be a body politic or corporate, at the following rates of tax (for each one hundred dollars ($100.00) or fraction thereof) of the value of such interest:
First $10,000	 8 percent
Over $10,000 and to $25,000	 9 percent
Over $25,000 and to $50,000	10 percent
Over $50,000 and to $100,000	11 percent
Over $100,000 and to $250,000	12 percent
Over $250,000 and to $500,000	13 percent
Over $500,000 and to $1,000,000	14 percent
Over $1,000,000 and to $1,500,000	15 percent
Over $1,500,000 and to $2,500,000	16 percent
Over $2,500,000	17 percent
(b)	An inheritance tax credit of four hundred dollars ($400.00) is allowed against the tax imposed by this Article on the transfer of property to a Class C beneficiary.  This credit is allowed to Class C beneficiaries in the following order:
(1)	Persons who are less than 18 years old, and persons who are at least 18 years old and who are single, are unable to support themselves because of mental or physical incapacity, and either are members of the decedent's household or, because of their mental or physical incapacity, live in an institution.
(2)	Other Class C beneficiaries.  The status of a beneficiary is determined as of the date of the decedent's death.
When two or more beneficiaries are equally entitled to the credit, the credit shall be allocated among those beneficiaries on a pro rata basis according to their tax liability.  The credit allowed by this subsection may not exceed the amount of tax imposed by this Article."
Sec. 3.  G.S. 105-23(b) reads as rewritten:
"(b)	Exception. – An inheritance tax return is not required to be filed for an estate (i) whose beneficiaries are all either Class A beneficiaries, as described in G.S. 105-4(a), or the surviving spouse, and (ii) whose gross value, including the value of transfers over which the decedent retained an interest and the value of gifts made within three years before the decedent's death, as provided in G.S. 105-2(3), is less than the amount specified in the following table:Estates of Decedents Dying
an estate whose gross value does not exceed two hundred fifty thousand dollars ($250,000) and in which the gross value of all transfers to Class B beneficiaries does not exceed ten thousand dollars ($10,000) and the the gross value of all transfers to Class C beneficiaries does not exceed five thousand dollars ($5,000).
For the purpose of this subsection, the gross value of an estate and of transfers from an estate includes the value of transfers over which the decedent retained an interest and the value of gifts made within three years before the decedent's death, as provided in G.S. 105-2(a)(3)."
Sec. 4.  This act becomes effective July 1, 1991, and applies to the estates of decedents dying on or after that date.