NC Sales Tax Holiday

The 3-day Sales Tax Holiday in North Carolina is scheduled to run from 12:01 am on Friday, August 3 until midnight on Sunday, August 5, 2012. But there is no guarantee that there will be one in 2013 or the year after that. As North Carolina continues to struggle to balance the state’s budget, many programs are on the chopping block and the Sales Tax Holiday could very well be one of them. This is the year to “Make it Matter!”

NCRMA has consistently reached out to remind legislators that the reason North Carolina first enacted a Sales Tax Holiday was that legislators and retailers alike watched North Carolina citizens cross the 40 border counties into surrounding states and return with shopping bags of both items exempt and non-exempt from sales tax during the Sales Tax Holiday. Legislators realized that these shoppers were buying gas, eating meals and staying the night somewhere other than North Carolina.

A study conducted in the state of Florida (Economic Impact Analysis of the 2010 Back to School Sales Tax Holiday; Washington Economics Group, Inc.) found that rather than costing states money the Sales Tax Holiday actually increases state revenues through sales tax on ancillary purchases, trips to the food court, increased hotel room nights, as well as increased jobs and payroll taxes that come from these jobs. The absence of sales tax obviously drives purchases as is evidenced by Amazon which enjoys a “sales tax holiday” 365 days a year to the detriment of main street retailers. 

If NCRMA members are approached by the media for a sales-tax-holiday interview, consider adding to your statement the importance of the event to your retail business and our state. Emphasize that this one weekend free of sales tax is one in which you can provide the best value to your customers who are still struggling in a down economy while also competing on a level playing field against online-only retailers.

The state’s lawmakers will be watching and reading this year – Make It Matter.

Attached you will find the list of taxed and not-taxed items for North Carolina to help you and your employees prepare for this temporary exemption from sales and use tax. [NOTE: No new changes this year.

If you have additional questions regarding the Sales Tax Holiday, please feel free to contact us at (919) 832-0811 or you can click on the link below for a recent issue of The Retailer explaining how to apply the law to certain retail transactions.

http://www.ncrma.org/12.05.01_Retailer.pdf