CALABASH, NC (WBTW) – A new tax went into effect in North Carolina Tuesday. Customers now have to pay for the cost of labor. The tax applies to repair, maintenance and installation services.
Knosys Computer Technician Paul McDonough hung a sign up Tuesday to remind people of the new labor tax.
“It’s now going to cost our customers more money just to get a simple repair done,” McDonough said.
Tax rates vary by county.The state charges a 4.75% sales tax, added to Brunswick County the total increases to 6.75%.
According to McDonough, a simple repair at Knosys costs $88, add sales tax and customers are charged an extra $6.
“We’re not raising our rates, but the cost is reflecting that,” explains McDonough.
McDonough’s business is located two minutes from the state line. He’s worried customers might drive to South Carolina for repairs.
“We would like to hope that our key clients, the ones that are repeat customers, will accept the added cost,” he said.
The labor tax is expected to bring in about $84.8 million in revenue for the state. Republicans hope the added sales tax will off-set the cost of lowering income taxes.
Sales tax now covers:
- Car repairs
- Car washes performed by a person
- Oil changes
- Flooring installation
- Clothing alterations performed by a retailer
- Shoe repair
- Tombstone or monument installation
- Appliance installation
- Modular home installation
Services excluded:
- Self-service and machine car washes
- State vehicle inspections
- Home repairs where the contractor isn’t selling materials
- Advertising
- Veterinary services
- Nail and hair services
- Pet care
- Lawn mowing
- Service contracts on cars
