N.C. consumers get pinched from higher taxes Tuesday
Posted August 31, 2009 1:42 p.m. EDT
Updated August 31, 2009 10:03 p.m. EDT
RALEIGH, N.C. — North Carolina consumers are going to feel another pinch at the mall, the ABC store and most everywhere in between.
The state's sales tax goes up a full penny Tuesday, bringing the total rate charged in most counties to 7.75 percent. At the same time, cigarettes, beer, wine and liquor will have higher excise taxes.
The increases are part of $1 billion in new revenues the Democratic-led Legislature and Gov. Beverly Perdue agreed upon to balance the state budget.
Democrats say they aren't happy with higher taxes but said it was better than laying off more workers. Republicans and anti-tax groups say unemployed voters struggling to scrape by will feel the pain acutely.
"It is likely hitting those people who simply did not take care of a minor ticket because of financial distress to begin with,” attorney William Young said.
The cost of a traffic ticket will increase by $9 and a seat belt violation by $26. The fee for failing to appear in court will double from $100 to $200.
"They told me that if I came in tomorrow (Tuesday) it would be $100 at least on top of the court fees, so I managed to make it in on time,” recent college graduate Thomas Godwin said.
Godwin still paid $245 on Monday for a ticket and failure to appear in traffic court fee. However, the costs would have been greater on Tuesday.
“As a recent graduate, it was kind of hard to put the money together just to pay this, so I wouldn't have been able to do it tomorrow,” Godwin said.
Wake County Clerk of Court Lorrin Freeman said the extra costs may help encourage more people to show up for court.
"In Wake County, we see as many as 12 percent of people who just fail to appear on their court date,” Freeman said.
If you can't pay a ticket by the due date, the state is offering a payment plan for a $20 fee.
"We all believe in fair and open court, it is something that we all have to shoulder together," Freeman said of the extra costs.
The higher sales and income taxes are considered "temporary." The extra cent charged on every $1 in purchases expires July 1, 2011, while the income tax surcharge expires at the close of 2010.
Perdue and other Democrats hope those taxes won't be needed then if the economy turns around. But that will be a tall order, as tax analysts project revenues aren't likely to return to pre-recession levels until 2014.
The excise taxes, however, are permanent.
Cigarette taxes will increase by 10 cents per pack to 45 cents, an incremental sign of tobacco's diminishing political power in North Carolina. Just five years ago, the tax was 5 cents per pack.
But pro-tobacco forces still managed to keep the North Carolina rate among the lowest in the country. Legislators wouldn't raise the tax by the extra $1 per pack that Perdue and health advocates sought as a way to discourage teen smoking while generating more revenues.
The beer and wine tax rates essentially haven't increased in at least 30 years. Alcohol buyers may take a second look when they read sales receipts come Tuesday because they'll also have to pay the higher sales tax on their purchases, too.