Businesses fret over tax plan

June 23, 2009 3:39:51 PM PDT
Some small business owners are keeping a close eye on the North Carolina Legislature these days - watching to see if they may be collecting sales taxes for the first time ever.Some Democrats in the General Assembly want to help balance the state budget by targeting 55 services for sales tax collection.

Manicures, pedicures, and hair-styling could be on the list.

At one salon in Raleigh, some customers told Eyewitness News a new sales tax on manicures and pedicures could be enough to make some clients walk.

"Once the price goes up, I think it's something people are going to cut right out of their budget," offered customer Heba Salama.

"We're going to feel it. And as a small business owner, doing everything and anything to stay afloat until the economy turns, this is going to hurt," said salon owner Lainie Panos.

Lawmakers backing the expanded sales tax also promise to bring down the tax rate. And some customers like the idea if the new taxes help divert budget cuts from schools.

"If they use it for the school system, I think it would be a good cause. If it's going for a good cause, them I'm for it," said salon customer Lynn McLeod.

But Panos wanted to know why lawmakers want to single out specific services. Why - for example - a salon and not a lawyer?

"Who are the people who make these decisions? What did they use to be?" she asked.


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