As Democratic candidates for North Carolina governor rally around the goal of raising the state sales tax, you might be interested to read what the Tax Foundation says about the state’s sales tax rate compared to neighboring states.
Look at the state sales tax rate alone, and here’s what you find:
- Tennessee (7 percent) — No. 2 in the nation
- South Carolina (6 percent) — No. 16
- Virginia (5 percent) — No. 31
- North Carolina (4.75 percent) — No. 35
- Georgia (4 percent) — No. 38
Add in local sales taxes, and the picture changes a bit:
- Tennessee (9.45 percent) — No. 1
- South Carolina (7.13 percent) — No. 18
- North Carolina (6.85 percent) — No. 23
- Georgia (6.84 percent) — No. 24
- Virginia (5 percent) — No. 43
Before advocates use these numbers to declare that a 0.75-percentage point increase in the N.C. sales tax rate would be reasonable, they should remember that Tennessee has no income tax and that South Carolina has a lower income tax rate than its northern neighbor.
With the latest data available (which is admittedly old fiscal 2009 data), the Tax Foundation assessed North Carolina as having a steeper overall tax burden than its neighbors.
That’s before any mention of raising the sales tax rate again.
Rather than raise the rate, perhaps lawmakers should consider sales tax reform.
