Andy Ellen: Tax chaos

April 14, 2014 

The April 11 editorial “ Wrong target” failed to point out that there was near uniformity among Republicans and Democrats on the Revenue Laws Study Committee that the Local Privilege License Tax needed to be reformed. These legislators recognized that the local privilege license tax was never intended to be a revenue source, and it was certainly never intended for some cities to charge certain businesses up to $20,000 like Raleigh or an unlimited amount like Durham.

Does it really take $20,000 for Raleigh to know a business is operating in Raleigh when Apex charges nothing and Garner charges $50? Cities may scream for revenue, but Durham had no problem approving $3.97 million last month to build a hotel.

The current privilege license tax structure is already harming small businesses – the family-owned business at the State Farmers Market since 1946 that saw its privilege license tax increase from $50 to over $9,000 or the independent grocery store in Longview that saw its tax increase overnight from $109 to over $4,500. This has created what Chris McLaughlin from the University of North Carolina Institute of Government calls a “hodge-podge of tax structures” and “chaos for businesses operating in multiple places.”

Andy Ellen

President, North Carolina Retail Merchants Association, Raleigh

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