From an editorial in the (Winston-Salem) Journal on Monday:
Legislators who found it wise to end the states sales-tax holiday obviously werent at the malls Saturday.
Stores were packed with customers buying back-to-school products that qualified under the weekend amnesty.
The holiday provided a great opportunity to save while filling juniors book bag for school. But it also gave us all a price break on that new computer, tablet or mystery hardback.
The holidays popularity is a problem for the state; it deprives the Revenue Department of an estimated $13.6 million, money that legislators say is needed to balance the budget.
We dont buy that argument, and we urge legislators in their next session to reinstate the tax holiday. The $13.6 million represents a minuscule percentage of a $20.6 billion budget. There were many other ways to offset that revenue when the legislature supposedly reformed the tax structure last month. Legislators simply chose not to keep a tax break that enjoyed across-the-board support from rich and poor alike.
The tax holiday is also popular with merchants who find that it lures people away from the pool or beach for a few hours in August. Since 2002, theyve been combining their own price reductions with the tax break as a way of creating sales momentum. As a way of compounding the enthusiasm, some stores even offer to pay sales taxes, themselves, on items that dont qualify.
North Carolinas merchants now fear that their customers will drift across the state line next August and buy their goods in neighboring states that have these tax holidays. Legislators approved the tax holiday in 2001 in large part to answer South Carolinas holiday. And, theres competition from Internet shopping which often comes without the collection of sales taxes. Neither prospect is good for our retailers and the jobs they provide to our residents.
Its remarkable that Republicans ended this tax break, because these holidays were started years ago by legislatures in Republican states, and they satisfy the anti-tax sentiment of many Republican voters. The tax holiday should be reinstated here.
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