Sales tax goes up tomorrow

North Carolina's sales tax rises tomorrow by a penny from 6.75 percent in most counties to 7.75 percent.

The increase was pushed by Gov. Beverly Perdue and adopted by legislative leaders, all Democrats, as part of a $1 billion tax increase package and a series of spending cuts to balance the state budget this year.

The local portion of the sales tax can vary, as in Mecklenburg County, which includes and additional 1/2-cent transit tax. Its rate will be 8.25 percent starting tomorrow. Alexander, Catawba, Cumberland, Haywood, Martin, Pitt, Sampson, and Surry Counties will have rates of 8 percent.

The sales tax accounts for about 30 percent of state revenue, but it also is the quickest source when legislators are looking for a cash infusion. Consumers start paying it right away, while income tax increases are mostly paid the following year.

The sales tax is criticized as disproportionately burdening middle and lower class taxpayers and also because the tax base for it is shrinking. Consumer spending has been shifting toward services, many of which are not taxed.