Reality Check: No Tax-Free Holiday Weekend
People shopping for back to school this weekend won't be getting a tax break. North Carolina ended the sales tax holiday to help pay for lower tax rates.
Back to school shoppers again, breaking down the lists. This upcoming weekend, the first in August, traditionally a sales tax holiday in North Carolina for many school items. But this year the shopping spree is not tax free, and no big loss for some.
If you do the math, if a shopper spends $100 on tax free items that's a savings of anywhere from $6.75 to $7.50, depending on your counties tax rate.
Shopper Sarah Woody says the savings wasn't worth it. "It really didn't matter to us... We would rather just come and spend our leisure time and trying to get our sales here with the good prices anywhere and not have to fight the crowds."
The state did away with the holiday and other tax loopholes to help pay for lowering everyone's state income tax. "We cut income taxes for the wealthy and we cut corporate income taxes. In order to do that we had to increase our tax base," says Democrat State Senator Terry Van Duyn.
Some despised the deal. Democrat State Senator Terry Van Duyn says cutting the holiday will hurt some families. "We are not in favor of shifting the tax burden from the well healed to working people," he says.
The sales tax holiday cost the state an estimated $13 million in revenue. State revenue is about $20 billion, so the holiday only amounted to a small fraction of total revenues. A tax break some say wasn't high on their list.
The tax holiday started in 2002. Republicans argue a flat and lower income tax rate of 5.75% and a higher standard deduction, which begins in January, will make up for the lost savings.
By: Frank Fraboni
Follow Frank on Twitter @FRABONZ