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Friday, January 29, 2016

Sales Tax in North Carolina

The Radical Republican General Assembly enacted another round of tax reforms in the 2015 session, reducing some income tax rates, while expanding the state's 6.75% sales tax to include "repair, maintenance, and installation services." This is on top of the 2014 reforms, that added sales tax to admission fees for entertainment and lots of other taxes and fees.

While the income tax rate reductions will reduce the personal income tax for a family with $30,000 annual income by about $50, the expanded sales taxes will result in a greater tax burden for low income families in our state.

While not an exhaustive list, here are some of the "revenue enhancements":

  • Increase on the sales tax on electricity and natural gas from 3% to 7%
  • Sales tax on admissions charges to entertainment activities (more about that below)
  • Increases in DMV fees, including driver's license fees and vehicle registration fees
  • Community college tuition increases
The sales tax on admissions charges to entertainment activities is really interesting. The tax applies to admission tickets to movies, concerts, museums and cultural sites, guided tours at such sites, and sporting events. Exceptions include payments for "the right to participate in sporting activities." That includes greens fees and gym memberships. Also excluded is a "charge for lifetime seat rights, lease, or rental of a suite or box for an entertainment activity." So, working stiffs have to pay sales tax on the ticket to the Panthers game, but the corporation doesn't have to pay sales tax on renting the luxury box, or for the PSL to have the right to have a seat. (http://www.dornc.com/taxes/sales/impnotice062514.pdf)

Seems like the General Assembly is going out of its way to stick it to working class North Carolinians.


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