Increase in sales tax of no concern to residents

Retailers say a quarter-cent sales tax increase that went into effect Sunday won’t impact overall sales because residents seem indifferent to the increase, specifically in Chapel Hill and Carrboro.

Jamie Holland, owner of Apple Boutique, which is located in University Square, said she doesn’t think the higher tax will deter her customers. In fact, she said the impending increase was good for March sales because she warned customers to make purchases before it went into effect on April 1.

The increase is the result of a referendum Orange County voters passed in November 2011. It will increase taxes on most retail goods from 6.75 percent to 7 percent.

The tax is expected to increase county sales tax revenue by approximately $2.5 million, which will be equally split between education and development.

After failing in the past, the referendum to increase the tax passed with about 60 percent approval in the last election.

But some criticized the referendum’s passage because of its timing. While Chapel Hill, Carrboro and Hillsborough held 2011 town government elections, rural areas had no candidates on the ballot and expected low voter turnouts as a result — reducing their say on the tax.

But the Orange County Board of Commissioners said they put the tax on the ballot to raise money for economic development and the public school system, and those funds were needed quickly.

The revenue and spending of the funds will be tracked through a website available to the general public.

“I would anticipate it would be up and running within the next quarter,” said Gwen Harvey, Orange County assistant manager.

Harvey said the website will target residents, voters and merchants who have an interest in how the spending will unfold.

But business owners said there won’t be any major changes to how they conduct sales.

Holly Dedmond, the manager at Chapel Hill Sportswear, said the only thing her business has to do is update their cash registers.

She also said because the store’s clientele is predominantly from out of town, the increase will mostly be overlooked.

But UNC student Duncan Braid said he opposes the increase because it will affect some socioeconomic groups more than others.

“The sales tax is one of the few regressive taxes in the country, and it increases the burden on the poor,” he said.

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