Final tax-free holiday weekend coming Friday
North Carolina businesses and residents will enjoy the last tax-free holiday this weekend.
A provision in the tax bill passed by the N.C. General Assembly and signed into law last week by Gov. Pat McCrory ends the state’s popular tax-free weekend effective next year.
“It’s probably the third-busiest shopping day of the year,” said state Sen. Floyd B. McKissick Jr., a Democrat for Durham and Granville counties. “I hate to see us losing it.”
McKissick said the holiday was valuable for small businesses as well as low-income families, who wait for the tax-free weekend to buy expensive school supplies.
“The vast majority of people I see out there are buying things are kids in school,” he said.
The state holiday, which began in 2002, takes place at 12:01 a.m. on the first Friday
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of August until 11:59 p.m. on Sunday. The tax-free statute applies to clothing items of $100 or less, school supplies of $100 or less, and computers costing $3,500 or less, according to the N.C. Department of Revenue.
State Rep. Nathan Baskerville, a Democrat for Vance, Warren and Granville counties, said the holiday has become a tradition for families going back to school, especially low-income families in his district.
“It’s regrettable that the sales tax holiday is coming to an end after a decade,” he said.
The new tax law, House Bill 998, cuts corporate income tax rates and lowers personal income taxes to a flat rate. It also limits state spending by $2.3 billion over the next five years.
Andy Ellen, president of the N.C. Retail Merchants Association, said his organization was generally in favor of the tax bill, particularly the cuts to personal and corporate income taxes that could make the state more attractive to big companies and small businesses.
Still, Ellen said he hoped the state holiday would continue after 2013.
“We are concerned that consumers will go across the border, to South Carolina or Virginia, where the tax-free weekend is still in effect,” Ellen said.
Ellen said state businesses will lose out on taxable purchases that are made along with the tax-free items.
“Often times, we see parents buy a $1,000 laptop for their student, for example, and then use the $67.50 savings on a microwave or comforter (which are not tax-exempt items),” Ellen said.
But the three-day holiday can cost the state millions. During last year’s holiday, North Carolina lost about $13.6 million in tax revenue, according to the N.C. Department of Revenue.
Ellen and his organization still plan to push for the holiday’s reauthorization. The NCRMA created a Facebook page on July 18 called “Save NC Sales Tax Holiday” to draw attention to the state’s last tax-free weekend.
“It’s our job to educate consumers and policymakers as to why the holiday should be authorized going forward,” he said.
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