County fairs may slip through new tax loophole
Posted June 5, 2014
Raleigh, N.C. — The state House gave preliminary approval Thursday to bill that would exempt county agricultural fairs from collecting sales tax on tickets for entertainment events, and some lawmakers said they expect other exemptions to follow.
The move comes one week after Gov. Pat McCrory signed a package of adjustments lawmakers made to the sweeping tax reform legislation they passed last summer.
"This is the beginning of the unraveling of all the hard work you did last year," said Rep. Julia Howard, R-Davie.
Howard, the chairwoman of the House Finance Committee, and other top Republicans spoke out against House Bill 1201, which was backed by Rep. Bryan Holloway, R-Stokes, saying they tried to eliminate loopholes last year and don't want to start bringing them back.
"This is the first step toward treating the same things differently," said Rep. David Lewis, R-Harnett. "We did make a commitment that we were going to treat the same things the same way. This bill goes in the opposite direction."
Rep. Becky Carney, D-Mecklenburg, said she was in a subcommittee last year that decided against exempting county fairs, state attractions such as the North Carolina Zoo and most nonprofit events from collecting sales tax. She said that, if fairs were granted a loophole, she planned to seek similar exemptions for nonprofits.
Rep. Jonathan Jordan, R-Ashe, said he feared for-profit groups running a fair would get a tax break under the bill.
The debate got to the point that House Majority Leader Edgar Starnes tried to kick Holloway's bill back to the Finance Committee for more debate.
"It's beginning to tilt it to who has the clout to get an exemption for his special interest," said Starnes, R-Caldwell.
Starnes withdrew his motion after several Republican lawmakers said the measure should be voted up or down and not just buried in committee.
"These fairs need to stick around," Holloway said. "They're big, big things for our small communities."
The House voted 64-50 for the exemption. A final vote, along with a vote on the amendment Carney vowed to bring forward for nonprofits, is expected next Tuesday.