NC Sales Tax takes a Hike

What does it take for a retailer to accommodate North Carolina's new, higher sales-tax rate, which takes effect today? The click of a few computer keys, at least for merchants such as Blackhawk Hardware at Charlotte's Park Road Shopping Center.

The 32-year-old business sells a broad range of merchandise, including Pyrex glassware and paint, little keychain gadgets and Big Green Egg smoker-grills. And when the store opens at 8 a.m. today, it'll all be taxed at 8.25 percent - 1 cent higher than the day before.

The store's manager is planning to arrive and switch the tax rate from 7.25 percent to 8.25 percent inside the computerized sales system about 7 a.m., following instructions from Blackhawk's information technology chief, owner Jim Wilkerson said.

"This is the easy part," said that IT guru, Tim Mack. "The hard part is all the estimates, all the special orders, all the things we've done in advance."

Wilkerson said he isn't expecting the tax hike to appreciably impact business. It might bring a bit of complication with customers who received estimates before the change for, say, cabinet hardware or door locks. The store will have to recalculate those figures under the new tax rate if the customers return wanting to proceed with a purchase. That represents about a $20 difference on a $2,000 sale, for example.

The store may take a hit, however, on special-order sales that are already paid in full but haven't yet been fulfilled. Such transactions are treated as a deposit, not an official sale, until the item arrives and the customer receives it. The store is reluctant to ask already-paid customers to pony up for the tax difference when they pick up their items, and expects to calculate the sales under the old rate.

"We're probably going to have to eat that," Wilkerson said as Mack sat at a computer Monday afternoon.

Though the tax will bring in more revenue, the only thing Wilkerson expects to really increase is the amount of money the store sends to the state every month.

Fortunately, he said, he's noticed consumers have loosened up and spent a little more in the last couple of weeks, which he attributes to less uncertainty about the economy.

Sales of higher-end paint brands have begun to recover, he said, and noticeably more people have been looking at grills, the store's biggest-ticket item.

That's encouraging, Wilkerson said, because grills are discretionary; people don't have to have them. Blackhawk sold three high-end grills, in the $800 to $1,000 range, Sunday, which helped push store sales over the same Sunday last year.

Source:Charlotte.com
By Jen Aronoff
jaronoff@charlotteobserver.com Posted: Tuesday, Sep. 01, 2009

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I highly doubt anyone will notice this sales tax increase on small purchases.....
But when it comes to real estate... They'll notice!!

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