What are the temporary taxes?

A sales tax and an income tax on the wealthy that were instituted to make up a budget shortfall in 2001.

After an economic downturn, revenue from North Carolina's existing taxes was lower than expected. To make up the loss, Gov. Mike Easley proposed two tax hikes that August.

Under the final budget approved by the legislature, the sales tax rose by a half cent and the income tax on the wealthy — single taxpayers making more than $120,000 or married couples making more than $200,000 — went up a half of a percent.

The two taxes were renewed in 2003 and 2005, but in 2006 lawmakers voted to phase out half of the increases on both taxes. The rest was set to expire in 2007.

However, the final 2007 budget made the quarter-penny sales tax hike permanent, putting the combined local and state sales tax in most of the state at 6.75 percent.

The budget also set the income tax hike on track to expire at the end of the year, putting the tax rate for top income earners at 7.75 percent.