The bill was approved by a vote of 64-43 after House members narrowly approved an amendment that would exempt homeowners who purchase the products for their gardens. The measure would continue to exempt farmers from paying the tax.
The legislation would earmark $700,000 of the money for research on turfgrass at the state's agricultural universities.
The bill was supposed to generate an additional $5 million in revenue, but it's unclear whether that's changed with the home garden amendment introduced by Rep. Rex Baker, R-Stokes.
Rep. Pryor Gibson, D-Montgomery and a bill sponsor, said the amendment would be difficult to enforce because it would require cashiers to ask every person who buys seed or fertilizer how it would be used before determining whether the person should be taxed.
But Baker said businesses already have to differentiate between farmers and nonfarmers under the current law. The amendment passed 56-52.
A similar provision to tax seed and fertilizer purchases was placed in the Senate budget proposal this spring but it was removed from the final spending package. The House bill now will head to the Senate.
Fertilizer and seed purchases had not been taxed in North Carolina because traditionally farmers had bought the overwhelming majority of the goods. With the explosion of golf courses, lawn care businesses and home improvement over the last few decades, the pattern of purchases changed, leading officials to consider assessing a sales tax.
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