Sales tax now collected on more things in NC

Posted March 1, 2016

— Car repairs, home improvement jobs and appliance delivery and installation got a little more expensive in North Carolina on Tuesday.

State and local sales tax is now collected on some labor charges. In Wake County, that's an extra 6.75 percent for a mechanic's time or the installation fees charged by Home Depot, Lowe's Home Improvement and others.

The tax is expected to generate about $166 million in revenue for the state, but Republican lawmakers who authored the change as part of the 2015-16 state budget say it will be offset by other tax cuts.

"For the average taxpayer in North Carolina, we have saved them significantly and will continue to do so," said Rep. Jason Saine, R-Lincoln, referring to income tax cuts that also were part of the budget.

GOP-backed tax cuts have resulted in $2.66 billion less in taxes being collected since 2011, Saine said.

Sen. Bob Rucho, R-Mecklenburg, said the sales tax expansion is a necessary part of a shift from an income tax-based system to a consumption tax system that he says is better for job creation.

"We changed the system around to a pro-growth economic model. We see an increase in wages, in employment, just in overall opportunity for people," Rucho said. "The numbers don’t lie. Income is going up. Every North Carolina family at every income has seen their taxes go down."

Democrats argue that's not the case. Sen. Mike Woodard, D-Durham, said the income tax cut is saving the average family in the state only about $50 a year.

"I'm sorry, it's not there," Woodard said of the impact of the income tax cut. "You need a magnifying glass to see it in your paycheck, and you're losing it with this tax scheme that took effect today."

When the repeal of tax credits for child care and earned income are added in, the poor are paying more, he said.

"The Republican budget with its flawed tax scheme is nickel-and-diming North Carolina's middle- and low-income families," he said.

House Minority Leader Larry Hall said sales taxes hit low-income families harder as a percentage of their budget. He called the shift from income taxes to consumption taxes a bait and switch.

"Our working poor are subsidizing big tax cuts for the well-to-do," said Hall, D-Durham.

Republican lawmakers said they're considering more income tax cuts in the coming session, but Democrats said the state should use any additional money in the budget to increase pay for teachers and state employees.


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  • Shandy Scott Mar 3, 2016
    user avatar

    According to the Tax Foundations web site our overall state tax burden in one year went from the 6th highest in the country to the 34th highest. They stated in their long history it is the largest difference in one year.

  • Kim Schrock Mar 2, 2016
    user avatar

    The left wing politicians and the right wing politician in this state are part of the same bird!

  • Fanny Chmelar Mar 2, 2016
    user avatar

    View quoted thread

    Complain about those who hire them. When there's demand in the labor market, they'll come...

  • Morris Vobserv Mar 2, 2016
    user avatar

    this still allows illegal workers to do work for cash, not pay income tax on it and now skip this sales tax also...so we added a tax that only affects the legal businesses ans patrons while illegal workets and companies just got another 6.75% price quote advantage

  • Fanny Chmelar Mar 2, 2016
    user avatar

    Remember when uninformed yet passionate conservatives were cheering about their "win" in the midterms?

    Remember when rational folks were warning them of what they just did, but their "vote against Obama" was all that was important to them?

  • Evan Morris Mar 2, 2016
    user avatar

    So I get to pay 6.75% more on repairs to keep my 10 year old car running so the rich are better able to buy their new BMWs every other year.

    Welcome to the Second Gilded Age,

  • Fred Holt Mar 1, 2016
    user avatar

    Yep - if you spend most or all of your salary, you likely didn't get that max income rate cut - but you sure will get all the nickel and dimes on the spending side - that the "upper crust" that pushed this through will never notice. If you voted republican and notice these extra taxes on you - you failed yourself.

  • Melanie Lane Mar 1, 2016
    user avatar

    well done republican voters - but feel good that Art Pope and his brethren are now paying less, enjoy paying their share.