Increase in Sales Tax Hardly Noticed
Sales taxes on dry goods, beer, wine and cigarettes climbed Tuesday, but Moore County shoppers took it all in stride.
A check with several retailers shows that most folks were either philosophical about the hike or simply did not notice it.
On Tuesday, the sales tax climbed one cent to 7.75 cents in Moore County and most other counties in North Carolina.
"Most customers didn't even notice it," said Elizabeth Minor, Peebles department store manager. "I didn't hear the first complaint."
Monique Fairley, an employee at Bo's Food Store in Southern Pines, also heard no complaints.
"But I think they probably didn't know about it," Fairley said.
Bo's, a supermarket, sells beer, wine and cigarettes as well as food and general merchandise. The one-cent increase in the sales tax does not apply to food, but the store also sells a variety of other taxable goods.
The tobacco tax rose 10 cents on a pack of cigarettes. The tax on beer went up 4.8 cents for a six-pack, and the tax on wine went up four cents a bottle.
Ajala Van Dyke, general manager of Staples, also heard no complaints and said the only reaction she heard was surprise. Van Dyke said apparently many customers were not expecting the tax increase.
At Staples, which specializes in office equipment and supplies, the one-cent increase in the sales tax represents "a tremendous increase" for such high-ticket items as computers and printers, she said.
Personnel at Big Lots and Quality Mart in Aberdeen likewise reported no complaints from customers. Big Lots sells general merchandise, including tobacco products. Quality Mart is a convenience store and filling station that sells beer and cigarettes, among other items.
Patrick Coughlin, president of the Moore County Cha-mber of Commerce, said he had received no negative feedback about the higher taxes. He, too, was philosophical about the increases.
"As much as people hate to see taxes go up, most people realize that this was inevitable," Coughlin said. "The business community has accepted it as a foregone conclusion that we had to accept a tax increase somewhere."
Coughlin said he has seen no data indicating that the one-cent sales tax increase will adversely affect retail sales.
The Chamber executive said "the writing on the wall" had been there for state coffers for some time, and the budget crunch of this past year reflects acceptance of that reality.
"Every time Wall Street sneezes, everybody thinks they have a cold," Coughlin said, adding that slow sales reflect the frail economy more than a backlash from a sales tax increase.
"Despite signs of recovery, people are slow to spring back into the marketplace," he added.
"The one-cent sales tax increase is probably the least controversial and most equitable tax," he said.
Coughlin admitted that the sales tax does weigh more heavily on the low-income family, who must devote a major percentage of income to purchasing the basics. On the other hand, Coughlin said the state will pick up huge hunks of revenue when someone buys such big items as a new Mercedes.
Some relief will come Oct. 1 when one-fourth of the sales tax will disappear, when the Medicaid Relief Act closes out, marking the final step in the transition of the Medicaid burden from counties to the state.
It also means that a special quarter-cent sales tax will be dropped, according to Lisa Hughes, Moore County's finance officer. Hughes says that no part of the new tax increases comes back to the county.
Because of the sluggish economy, the county's collection of local option sales taxes has dropped sharply in the past year. The one-fourth cent drop on Oct. 1 is expected to equal the loss of $1 million in revenue to the county, but she reports that the county stands to gain $4 million by relinquishing the Medicaid burden on a permanent basis.
"Overall we're breaking even," she said.
Of the 7.75 percent sales tax, only 2.25 percent is returned to the county, according to Hughes. When Oct. 1 arrives, and the quarter-cent local tax is removed, the total tax will become 7.50 percent, with the county receiving 2 percent.
Tax increases were imposed by the 2009 legislative session to help offset the state's rapidly tumbling revenue shortfall and to balance a teetering budget. They are part of a $1 billion tax increase package, coupled with broad spending cuts.
Contact Florence Gilkeson at 693-2479 or by e-mail at email@example.com.
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