Local News

State Lawmakers Want To Streamline N.C. Tax Codes

Posted January 28, 2003

— A group of lawmakers has just completed a study of North Carolina's tax code and suggests the state is losing a lot of money in uncollected sales tax.

North Carolina may soon benefit from the collection of sales taxes on goods bought over the Internet. State Sen. John Kerr, D-Wayne, said the state loses $100 million a year in lost sales taxes.

""The mail-order houses who do not have a nexus or have a building with employees in this state are avoiding the collection of the sales tax," he said.

A revenue laws study commission approved a package of recommendations that will streamline North Carolina's tax code, and perhaps eliminate some of the confusion on what is subject to a sales tax and what is not.

For example, prescription drugs are not taxed the same as the medications sold over the counter. There is also no state sales tax on groceries, but consumers pay the full state sales tax on prepared food at the store.

For the 89 counties that have the additional half-cent sales tax in place, those counties are still collecting 2 percent under the local sales tax option.

State Rep. Paul Luebke, D-Durham, said streamlining the sales tax code has its benefits.

"The opportunity to lower some taxes -- I, for one, would love to have no sales tax on groceries at all," he said.

Lawmakers will tackle whether to allow a statewide half-cent sales tax to expire in July. Gov. Mike Easley has suggested the tax stay on the books because the state needs the money.


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