(RALEIGH) -- A legislative study committee is looking into what should be done with North Carolina's estate tax.  The panel is considering a repeal of the tax which, according to fiscal analyst Jonathan Tart, will be reduced in line with the federal tax.

"For 2011 and 2012 the state's up to $5 million that is not subject to the North Carolina tax.  Unless the Feds change the law, that exemption amount is reduced from $5 million down to $1 million," said Tart.

The committee did not make any recommendations but heard arguments for and against the repeal  A representative of the N.C. Budget and Tax Center said a repeal would take revenue away from the state, while a speaker from the Civitas Institute told the committee that allowing a reduced tax would bring in taxes from more eligible farms and businesses.