Buyers get a break with last N.C. sales tax holiday
This weekend, local shoppers and deal-seekers statewide have a final chance to buy items ranging from book bags to ballet shoes without a sales tax.
North Carolina’s annual sales tax holiday will be in effect from Friday to Sunday — which will be the last of its kind under tax reform approved by Gov. Pat McCrory. Sanford Area Chamber of Commerce President Bob Joyce said the state has reported losing $13.5 million or more from the promotion, but both retailers and their patrons have benefited substantially.
“It’s really something people have built marketing plans around,” Joyce said. “The Chamber was very disappointed that the legislature would do away with this; we understand the budget constraints, but when you look at all of the other benefits, the intangibles, the loss in revenue is not that severe.”
The advantages that are unaccounted for, according to Joyce, are the extra employee hours that translate to additional payroll tax for the state, and purchases of non-exempt items — which shoppers also buy when they are taking advantage of the tax break.
“I’ve heard several merchants say, ‘It puts us on equal footing with Amazon,” Joyce said, referring to the Internet shopping site that doesn’t charge sales tax. “This certainly allows people with storefronts to compete with online retailers.”
The timing of the weekend coincides with the start of back-to-school shopping, and according to the N.C. Department of Revenue, clothing, footwear and school supplies of $100 or less per item are exempt, as well as school instructional materials of $300 or less per item; sports and recreational equipment of $50 or less per item; computers of $3,500 or less per item; and computer supplies of $250 or less per item.
Tablet computers and netbooks of $3,500 or less per item qualify, but basic eReaders are not considered computers and are subject to tax.
Lynwood Jones, owner of Avent & Thomas clothing store on East Main Street, said he has held his summer clearance sale on tax-free weekend for several years.
“That has proved productive,” he said. “We also get a little back-to-school business ... .”
Customers snap up sportswear, name-brand workwear, jeans and more, Jones said, and without the local 7 percent sales tax, the savings can be significant.
“I hate that this is going to be the last one,” he said, “but maybe they’ll consider changing that.”
The tax-free holiday begins at 12:01 a.m. Friday and lasts until 11:59 p.m. Sunday. For a full list of exempt items, see http://www.dor.state.nc.us/taxes/sales/holiday_exempt.pdf