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RALEIGH -- North Carolina is one of 22 states that imposes some sort of estate or inheritance tax. A proposal, still in draft form in the General Assembly, could repeal the tax.

“It's come to the forefront because of what is happening in Washington and also because of what we are doing in the state because of tax modernization,” said Sen. Robert Rucho, a Mecklenburg County Republican.

The legislative Revenue Laws Committee is bringing in advocates on both sides of this issue, to help determine if the tax is necessary or excessive.

Edwin McLenaghan with the North Carolina Budget and Tax Center said a repeal is a bad idea.

“This is one of the worst times to talk about cutting taxes,” said McLenaghan. “When we have consistently faced budget shortfalls and are already having problems funding our public investments in education, in health services and in public safety.”

McLenaghan points out that very few are affected by the tax. In fact, in the most recent data from 2009, only about 120 families in North Carolina had to pay it.

In order to qualify for the tax, you have to surpass the multi-million dollar exemption level, and he said he believes those are the families who can afford to pay.

“It's basically a backstop for the income tax,” said McLenaghan. “We all have to pay the income tax, so the estate tax is really important to have, so that all those assets that have never been taxed ,so that they get taxed.”

Supporters of the repeal point out that while it doesn't affect many, it is costly to those who it does affect. Changes could be necessary to be fair to those who currently qualify for the tax.

State lawmakers said discussions are still in a preliminary phase for a repeal and it will likely be part of a larger debate of a tax system overhaul for the state.