State Budget: Sales Tax Expansion

The next time you buy a car, get a tune up, or bring in someone to fix a household appliance, you may be seeing an extra charge on your bill. It's all part of the new state budget and what it's doing with the sales tax. Those extra charges you'll be seeing, in the spring are part of an expansion of the current sales tax to include things that haven't been taxed before like labor costs.

Car problems. We've all had them. And getting a tune up can be pricey.

"Sometimes they'll call and they think they have enough money for it, but their bill gets a little larger. We tell them how large the bill is going to be then they ask to leave their car there for a week and pay next Friday when their paycheck comes in," said Mark Kraus, owner of Integrity Auto Repair in Salisbury.

Kruas says he’s not happy to hear that his customers' bills could get even bigger. If the state budget is signed into law, labor costs will also be taxed as part of a sales tax expansion.

"I hear from my customers now that many of them have trouble paying for car repair as it is. I see sales tax on labor - which can come to half of the bill - being another burden for lower to middle income customers that I have," said Kraus.

The new labor tax would generate extra money for the state. But where would it be spent? Dr. Michael Bitzer, Catawba College Politics professor explains.

"The legislature was very specific. It has to go to economic development, typically infrastructure, and education, k-12 or community colleges," said Bitzer.

But not all counties can count on that extra money to tune up their balance sheets. Urban counties like Mecklenburg and Iredell wouldn't get any of the money from the expanded sales tax. More rural counties, like Gaston, Union, and Rowan counties will be seeing those dollars.

"That's what this is designed to be, a stimulus to the areas that are either fast growing or in need of assistance with infrastructure like rural counties," said Bitzer.

But keep this in mind. The budget isn't set in stone quite yet. The house is set to vote on it, this Thursday and then the governor has until midnight on Friday to sign it into law.

If Governor McCrory vetoes the budget, lawmakers will have to pass another budget continuance. If that doesn't happen, they'll have to move forward without funding the government.

Here's a link to the full 429 pages of the budget.