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N.C. Schools Pay Millions in State Sales Tax

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RALEIGH — North Carolina is one of only six states inthe nation that forces its schools to pay a state sales tax on everythingthey buy. The 6 percent sales tax adds up to millions ofdollars coming out of schools' budgets.

Whenever a school buys supplies, food for school lunches or materials tobuild or repair schools, school districts have to pay that 6 percenttax. So, 6 cents out of every school dollar, which is taxpayer money,goesbackinto state coffers.

Everything in the Wake County school district's purchasing warehousewas subject to the tax when bought. Shipments arrive every day with itemsfrom paper clips to computers.

Purchasing Director Scott Doolittle told WRAL-TV5'sBret Baier that the tax penniesper dollar spent reallyaddup.

Wake County schools pay more than $2 million every year in state salestax. With an average teacher salary of $31,000 per year, that taxcouldpay for 65 more teachers in Wake County alone (excluding benefits andother personnel costs).

Statewide, the figures are even more staggering. The North Carolina FiscalResearch Division estimates that state schools pay about $31 million ayear in state sales tax.

State Rep. Fern Shubert (R, Union) hasintroduced a bill to change that.

As Governor Jim Hunt talks of making education the top priority in hisadministration, the fact that schools have to pay sales tax on theirpurchases 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 halfof that will go to labor costs, which are not subject to sales tax, butthe other $900 millionistaxable. That means $54 million of thatschool bond money will pay sales tax. And that same $54 million couldbuild a high school, a middle school and an elementary school.

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