N.C. Schools Pay Millions in State Sales Tax
Posted February 27, 1997
RALEIGH — North Carolina is one of only six states in the nation that forces its schools to pay a state sales tax on everything they buy. The 6 percent sales tax adds up to millions of dollars coming out of schools' budgets.
Whenever a school buys supplies, food for school lunches or materials to build or repair schools, school districts have to pay that 6 percent tax. So, 6 cents out of every school dollar, which is taxpayer money, goesbackinto state coffers.
Everything in the Wake County school district's purchasing warehouse was subject to the tax when bought. Shipments arrive every day with items from paper clips to computers.
Purchasing Director Scott Doolittle told WRAL-TV5's Bret Baier that the tax pennies per dollar spent really add up.
Wake County schools pay more than $2 million every year in state sales tax. With an average teacher salary of $31,000 per year, that tax could pay for 65 more teachers in Wake County alone (excluding benefits and other personnel costs).
Statewide, the figures are even more staggering. The North Carolina Fiscal Research Division estimates that state schools pay about $31 million a year in state sales tax.
State Rep. Fern Shubert (R, Union) has introduced a bill to change that.
As Governor Jim Hunt talks of making education the top priority in his administration, the fact that schools have to pay sales tax on their purchases is something he says he never knew about.
You may recall a $1.8 billion school bond that was passed in November. That money was intended to build new schools. State leaders say about half of that will go to labor costs, which are not subject to sales tax, but the other $900 millionistaxable. That means $54 million of that school bond money will pay sales tax. And that same $54 million could build a high school, a middle school and an elementary school.