North Carolina sales tax holiday
Since 1996 when New York State enacted the first sales tax holiday, similar initiatives have gained popularity in a growing number of states. Typically, sales tax holidays last for a weekend—usually in the beginning of August to coincide with back-to-school sales—and items such as school supplies, books, and clothing are included in the temporary tax break.
However, like all other tax exemptions, sales tax holidays come at an expense and the state of North Carolina has recently decided that the costs are too high to justify. The state’s sales tax holiday was first implemented in 2002 and was scheduled to take effect during the first weekend in August. It included items such as clothing, footwear, school supplies, sporting equipment, and computers. According to a notice posted by the North Carolina Department of Revenue, none of these will qualify for the annual tax holiday.
The repealing of the sales tax holiday represents just one aspect of a large scale budget overhaul negotiated by state lawmakers in recent weeks. The incentive is straightforward: repealing the tax holiday is estimated to save North Carolina more than $13 million in lost revenue, a sizable amount of money for a state struggling to balance its budget.
The state sales tax in North Carolina is presently 4.75%, but in most districts the actual rate hovers around 7%. Since the average parent with children in school is expected to shell out a sizeable amount of money on school supplies in the upcoming weeks, the new policy will be felt by large number of North Carolina families.
Even without the tax holiday, there is some good news on the horizon for North Carolina residents in need of school supplies. That’s because retailers are reaching out to consumers directly, offering back-to-school sales under the banner of “Better Than Tax Free” to fill the void left by the tax holiday.
For example, the Concord Mills outlet will offer all consumers a 10% discount on their purchases during the weekend of July 25 –27, which is an ever greater incentive for consumers than the past sales tax holidays. So even though the tax holiday may have been repealed, residents can still take advantage of lower prices by choosing to shop in Concord, North Carolina, during this weekend promotion. Alternatively, consumers can benefit from sales tax holidays by shopping in the neighboring states of South Carolina, Virginia, and Tennessee during the weekend of August 1-3.
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