NC Senate Tentatively Approves Bill That Would Limit Wake County, Cap Sales Tax At 7.25%

Jul 23, 2014

North Carolina's sales tax would be capped at 7.25 percent in most of the state under a plan tentatively approved by the Senate on Wednesday afternoon.

The North Carolina senate has tentatively approved a plan to limit the sales tax to 7.25 percent in most of the state.
Credit Luz Bratcher via Flickr

The proposal would make it easier for most counties to raise sales taxes to the limit. It would also pull back the ability some counties currently have to implement raises above that limit.

The purpose is to even out sales taxes and create fairness between populous and not-so populous areas, bill supporters say.  

Sen. Jerry Tillman (R-Randolph), says many people in rural places don't spend their money there.

"You know where they go when they go to spend their money? They go to Charlotte and Raleigh, where they got shopping malls," Tillman told the Senate on Wednesday.

"Lord, we got some counties that don't have anything over four or five little strip malls. And some of them don't have that. They don't have a major shopping center."

Opponents say the bill targets four urban counties that currently have the ability to increase sales taxes to 7.5 percent -- especially Wake, where county commissioners have considered using a sales tax raise to build a light rail system.

But Sen. Josh Stein (D-Wake) says the measure would be a burden on his county. Under current law, Wake County voters could choose to raise sales taxes to 7.5 percent.

"You all are taking over the position of local county commissions," Stein says. "You're taking over, actually, the position of the more than two million residents of Mecklenburg, Wake, Guilford and Forsyth. It's about 2.5 million people. You're saying your judgment is superior to theirs."

The bill also aims to incentivize business growth in North Carolina. It helps give grants for new and growing companies and creates a new fund to help job recruiters close deals with new big employers.

The Senate would have to give final approval of House Bill 1224, and the House of Representatives would have to ratify it before it can be sent to Gov. Pat McCrory for signature.