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The Hidden Taxes in North Carolina’s Sales Tax

In a new piece about tax policy, JLF's Roy Cordato writes about North Carolina's ill-advised practice of taxing goods that are inputs into the production process.

Dr. Roy Cordato explains a key point of North Carolina tax policy that many of us don’t realize.

I am referring to the fact that North Carolina taxes final sales of products to the end consumer and business to business on sales. That is, it taxes goods that are inputs into the production process. What this means is that the price of every good and service includes the sales tax that is paid on inputs that are purchased and ultimately included in the sale of the product to the consumer. All of these taxes are embedded in the price that the consumer pays and are therefore hidden. The only tax that appears on the sales receipt and therefore the only tax that the consumer sees is the one that he or she is paying on the final price of the product at check out.

Dr. Cordato wants North Carolinians to be fully aware of who is paying what, and why reforms are necessary. Make sure you’re informed. Read the entire piece here.

Donna Martinez / VP of Marketing and Communications

Donna came to the John Locke Foundation in January 2003 after freelance writing for Carolina Journal and contributing to projects for the North Carolina Education Alliance. He...

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