Mecklenburg sales tax hike kicks in. You’re going to pay more for these things
Folks shopping in Mecklenburg County are about to see the cost of many items tick up.
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The county’s sales tax rate will increase by 1% on July 1, from 7.25% to 8.25%.
Voters approved the increase by a margin of 52.1% to 47.9% in November through a referendum. It’s expected to generate more than $19 billion over 30 years to fund a bevy of road, train and bus projects across Mecklenburg.
While many groceries are exempt, the full sales tax rate still applies to a variety of everyday goods and services. And not everything at the grocery store is subject to a reduced rate.
Exactly how much more families will pay depends on their spending habits.
In North Carolina, customers must pay sales tax on “tangible personal property,” which the state Department of Revenue defines as “personal property that may be seen, weighed, measured, felt, or touched or is in any manner perceptible to the senses.”
Sales tax also applies to certain digital items and specified services.
The full sales tax rate applies to common items including:
But some items are taxed at a different rate.
Retail sales of liquor “other than mixed beverages,” for example, are subject to a 7% sales tax.
“Qualifying food items” — which include many grocery items such as dairy products, meat and produce — are charged only a 2% sales tax rate. But other foods — including prepared food, soft drinks and candy — are subject to the full sales tax rate of the county.
The state legislature is considering a bill that would exempt diapers, wipes and feminine hygiene products from sales tax.
Mecklenburg County’s new 8.25% sales tax rate includes a 4.75% state sales tax rate, plus a 2% local sales tax and a now 1.5% transportation tax.
Under the new rate, someone will pay $8.25 in sales tax on a $100 item or $1.65 in sales tax on a $20 purchase.
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The city of Charlotte previously estimated the “average” Mecklenburg County household would pay an additional $20 a month in sales tax if the 1-cent increase was implemented, or an annual increase of $240. The city estimated a “lower-income” household would pay an additional $11 a month, or $132 in a year.
But the exact financial impact depends on what people buy.
Someone buying a new laptop that retails for $1,199 will pay about $12 more in sales tax under the increased rate, a jump from $86.93 to $98.92. The sales tax charged on a blouse on sale for $29.75 at a department store would go from $2.16 to $2.45.
One’s grocery bill wouldn’t increase at all if they were only buying pantry staples such as milk, eggs and bread. But it would go up if they were buying soda or a prepared food item.
The state legislation that authorized the sales tax referendum laid out how the influx of new revenue can be spent. It calls for 40% to go to train projects and 20% to the region’s bus system. The other 40% will be divided between Charlotte and Mecklenburg’s six towns for road projects.
Rail and bus projects will be overseen by the new Metropolitan Public Transportation Authority, which is taking over governance of the Charlotte Area Transit System from the city of Charlotte and Metropolitan Transit Commission.
At the top of the rail project list is the Red Line, a commuter rail line from uptown to the Lake Norman-area towns in north Mecklenburg. Legislators ordered the transit authority to complete at least 50% of the Red Line, which has been in the works for decades, before completing any other rail projects unless an unforeseen, extraordinary event upends the project.
Other rail projects slated to get funding from the sales tax increase are:
CATS is also planning $3.8 billion in bus projects, including increasing frequencies on its 15 busiest bus routes to 15 minutes or less, buying new buses and improving bus stops. The bus money is also expected to fund an expansion of CATS’ microtransit program — a rideshare-like service currently operating in select parts of north Charlotte and Lake Norman-area towns — to 19 other parts of the county.
It’s up to Charlotte and the towns to decide how they want to spend their cuts of the new funding for road projects.
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