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N.C. Opinions: Winston-Salem

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Restore sales tax holiday

From an editorial in the (Winston-Salem) Journal on Monday:

Legislators who found it wise to end the state’s sales-tax holiday obviously weren’t 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 junior’s book bag for school. But it also gave us all a price break on that new computer, tablet or mystery hardback.

The holiday’s 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 don’t 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, they’ve 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 don’t qualify.

North Carolina’s 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 Carolina’s holiday. And, there’s 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.

It’s 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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