Cost of car, home repair going up thanks to new NC tax

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A new sales tax on labor goes into effect March 1.

A new tax is coming to North Carolina starting March 1.

Consumers can expect to pay more to hire someone to repair their homes or vehicles.

It's all because the state will add sales tax to the cost of labor.

Durham resident Phyllis Glassgow doesn't like that one bit. She's getting an oil change at Tri-City Auto Repair.

"Just another tax," Glassgow said.

The state will add sales tax to labor costs Tuesday - the measure passed last general session, and will be a part of the state's new budget.

A $20 oil change at Tri-City Auto Care will cost Glassgow a couple dollars more.

But she's more concerned about labor-intensive repairs that will dig deeper into her wallet.

"I have to keep maintenance up on my vehicle to make sure that I have reliable transportation," Glassgow said.

The sales tax rate varies depending on where you live.

Durham residents pay 7.5 percent -- some of the highest sales taxes in the Triangle.

Ken McCormick owns the Tri-City Auto Care. He's telling customers about the change. And admitted he doesn't like it either.

"When you have a $200 sale, two-hundred dollars in labor, that's 15 dollars or so that you are adding to the ticket." McCormick said.

"People are still struggling just to get by and to get their cars fixed now," McCormick added. "I work with people every day that have to look at every dollar they spend."

The sales tax will also expand to clothing and shoe repairs, professional car wash detailing, painting and plumbing.

The state estimates the tax will generate $84.8 million in revenue.

ABC11 spoke with one of the bill's sponsors, Rep. Linda Johnson, a Republican.

She says the money will go toward education and economic recovery projects in rural parts of the state.

Late Monday, North Carolina GOP director Dallas Woodhouse issued a statement on the tax:

"Since Republican leaders repealed the Democrat enacted sales tax increase in 2011, citizens have seen one billion dollars EACH and EVERY year stay in their pockets. Combined with reductions and flattening of income taxes, including creation of a zero income tax bracket, taxpayers in all income brackets have seen tangible tax relief and will continue to do so. Our state's Republican leadership has instituted historic tax relief and reform that is growing our economy and putting more money in the pockets of North Carolinians."

Democratic Party Chair Patsy Keever also released a statement:

"Starting today, Governor McCrory is once again raising taxes for small businesses and middle class families. Since entering office, Pat McCrory has repeatedly prioritized special interests and giant corporations over hardworking families and small businesses. For most North Carolinians, Governor McCrory's disastrous choices have resulted in new taxes, stagnant wages, and less educational opportunity. That's why so many families are ready to choose a new governor this November."

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