N.C. Residents Expected To Take Advantage Of Sales Tax Holiday

North Carolina has joined many other states across the country, trying to spur a flagging economy and give consumers a break with a three-day, sales tax-free holiday. However, there is a catch.

The no sales tax option is only in effect for back-to-school items, such as clothes, shoes and computers.

There are also some price limits for the no sales tax option. Shoppers can buy clothing and school supplies up to $100 per item, sporting equipment up to $50 per item and computer equipment, including accessories and educational software, up to $3,500 per item.

Despite the restrictions, shoppers said they are pleased to get items tax-free.

"I think it's a good incentive. It gets people to feel a little bit more relaxed about spending," shopper Juliette Storr said. "They know they have to do it. It's a requirement. If you have kids, you have to go back to school. It helps in terms of saving a few dollars."

The tax-free holiday did cause a major headache at every Target store in the state on Friday.

Officials said the stores were not able to set up their cash registers to take off the taxes on certain items. At some stores including one in Charlotte, customers were charged state sales taxes on everything for a short time while shoppers at other stores received items tax-free.

Business owners also believe the sales tax holiday will be a major financial boost.

"[It] should be huge. All indicators are that it should really set all-time records," said Steve Roper, general manager of CompUSA.

"Add new components to the computer, add new features to the computer, upgrade those computers down the road, I think will add to the coffers of the state," said Bob Koncius, sales manager of PC Warehouse.

North Carolina is just the latest state offering a sales tax-free holiday. Connecticut, Georgia, Iowa, New York, Pennsylvania, South Carolina, Texas and West Virginia as well as the District of Columbia have the holiday.

Florida cancelled this year's sales tax-free holiday because of budget troubles. Twenty-one other states are considering sales tax holiday bills.

When the General Assembly approved the sales tax holiday last year, it estimated it would lose $12 million in state and local sales taxes. Some experts say it should be a shot in the arm for many businesses that will pay off for the state in the long run.