Expanded sales tax could cost you money, help rural counties

GREENVILLE, N.C. (WNCT) – The proposed expansion of the state sales tax could end up costing you hundreds, and in some cases thousands, of dollars each year. It is part of the state budget that is expected to be passed by the House and signed by the governor.

Sales taxes would be expanded to cover repair, maintenance and installation services, which includes labor on car repairs and installation fees associated with things like doors, windows, and other appliances.

The expansion is expected to increase the sales tax base by $44.5 million this fiscal year, and $159.5 million next fiscal year.

Ty Grant with Pugh’s Tire in Greenville said this move could add about $7 in additional taxes on your bill for each hour of labor done on a car. He said he can’t imagine customers will be very happy.

“Anytime you change anything pricing wise, oil change prices, anything, it’s always education and teaching the customer why,” he said.

There had been discussion during the budget debates to restructure how sales taxes would be distributed, which could have cost Dare and Carteret Counties millions each year. The new proposal keeps the same distribution model, and won’t cost Dare or Carteret any money. However, they also won’t receive any of the additional funds raised by the expansion.

Those counties receiving the biggest portion of the extra funds include Duplin County at 1.97%, Lenoir County at 1.56%, Greene County at 1.2%, Onslow County at 1.1%, and Craven County at 1.01%.

“I’m very pleased,” said Republican Rep. Pat McElraft representing District 13. “Jones County still wins, I represent Jones also. Jones County wins in this, and Carteret doesn’t lose, which is great.”

Some Democrats from the East also agreed the changes will help rural counties while not hurting urban counties.

“I don’t have any problems with that,” said Democratic Sen. Don Davis representing District 5. “As a matter of fact, I think this is needed for many of our rural communities.”

Republican Sen. Harry Brown of District 6 said issues like sales tax were the reason why the budget has taken so long to finalize.

“Those things take time, and it just took a process to work through and I think in the end we came up with a good budget,” he said.

The changes to sales tax wouldn’t take effect until March. The sales tax in the state is 4.75%, but county and city tax is added to that depending on where you live.

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