Legislators’ plan would tax more services, phase out income tax

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WINSTON-SALEM, NC -- Two republican state lawmakers support a plan to add sales tax to more services in North Carolina in order to eventually phase out the state income tax for individuals and corporations.

Sen. Bob Rucho (R- Mecklenburg) and Rep David Lewis (R- Harnett) are proposing the addition of about 130 new taxable services to the list of services for which the state already charges sales tax.

The selected services are from a 2007 survey by the Federation of Tax Administrators.

They include landscaping, dating services, health clubs, tanning salons, shoe repair, tuxedo rental, pool cleaning and maintenance, photocopy service, and downloading books, music, and movies online.

John Kupsa, a personal trainer at the Rush Fitness Complex in Winston-Salem, says increased gym fees are bad news for him.

"The clients have to pay for personal training sessions on top of what they pay every month. If the membership is more expensive it basically kills personal training," Kupsa said.

Next door at Nu Expression, there's worry too. The company handles graphic design, social media, web presence, and print and copy services for large businesses.

Director of Web Development Brian Leimone said customers won't understand that the state tax on his services is bringing a lower-income tax with it.

"They just see the higher price, and they go to competition online or out-of-state," Leimone said.

At this point, there is no bill draft for this concept. It's just an idea being discussed.

A list of the Tax Administration's potentially taxable goods and services can be found here.


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