NC House Members May Consider Lowering Local Business Tax, Classifying E-Cigs As Non Tobacco

May 15, 2014

Mack MckLamb, president of Dunn-based grocery chain Carlie C’s, testified before lawmakers this year saying the Local Privilege License Tax unpredictable across the state. 'We operate sixteen stores in 12 different cities that have 12 different methods to do it,' he said.
Credit Charlie C's

Some North Carolina lawmakers want to limit a tax cities can charge local businesses.

State lawmakers have been trying to resolve this for more than 10 years: A tax that businesses have to pay cities to set up shop there.

On Thursday, a committee sent a bill to the House of Representatives limiting the tax to $100.

But some cities say that cuts an important source of revenue. Charlotte, for instance, would lose more than $8 million.

On the other hand, businesses such as grocery stores say the tax targets them unfairly and is unpredictable from one city to the next.

As the Associated Press explains it:

Lawmakers have studied for years the jumble of local taxes, which hurts economic development within some cities, said Rep. Julia Howard, R-Davie, the finance committee's senior chairwoman. It's time to fix the problem, she said.

"If you just want to keep kicking the can on down the road, we can do that — that's the easiest thing to do," Howard said.

This bill examines at least 10 more taxes. It classifies e-cigarettes as non-tobacco products and taxes them at five cents per milliliter, as opposed to 45-cents per pack of regular cigarettes.

Manufacturers say e-cigarettes are a tobacco derivative, but not tobacco. The Food and Drug Administration has not classified this new industry.

"My concern is, is this a move from the industry to get in before they’re regulated and get in at 5 cents? And also, having this particular product, is it a derivative of tobacco?" asked Rep. Becky Carney, D-Mecklenberg County, after the bill was approved. "We need to have that information provided for us."

The bill may be up for vote on Tuesday.