Democrat Josh Stein wants to bring back tax-free holiday. Does it really help families?
North Carolina hasn’t offered a tax holiday in a decade, but Democratic gubernatorial nominee Josh Stein says he wants to revive the idea.
Stein, the current attorney general, announced his plan last week to implement a tax-free weekend, give teachers stipends for school supplies and to provide free meals to all North Carolina public school students if he’s elected governor.
The state had an August tax-free weekend for 11 years until former Republican Gov. Pat McCrory and the Republican-controlled legislature cut it in 2014 as part of a larger plan that reduced individual income tax in North Carolina. Stein said the back-to-school tax cuts are just one part of his plan to alleviate high costs of living for North Carolina families.
“We can do more than one thing at one time,” he said at a news conference at Central Piedmont Community College in Charlotte. “This is a concrete proposal that will help families who are stretching their budgets during the month before school starts to be able to afford just a little bit more.”
During tax-free holidays, families can buy certain school supplies, often including clothes and computers, without having to pay sales tax. In Mecklenburg and Wake counties, this means saving 7.25% on an item. Sales taxes range from 6.75% to 7.5% across North Carolina.
In Mecklenburg County, a family spending $100 all on qualified school supplies could save $7.25 on taxes compared to a normal weekend.
The savings for taxpayers also means less revenue for state government. In 2012, the state lost around $13.6 million in revenue from the tax holiday, according to previous Charlotte Observer reporting.
A spokesperson for Republican Lt. Gov. Mark Robinson’s campaign for governor called the proposal a “cheap election-year stunt.”
“Stein is a far-left career politician who has been voting for higher taxes and wasteful spending for years — the same failed policies that drive the crippling inflation that makes it more expensive for families getting ready to go back to school,” Mike Lonergan wrote in a statement to the Observer.
Proponents of the holiday say it helps families save money and supports business while boosting the economy. Stein said North Carolina residents travel to neighboring states with a tax free weekend, including to South Carolina and Tennessee, to do their back-to-school shopping.
A representative from the North Carolina Retail Merchants Association told The Charlotte Observer in 2013 the tax free holiday created a massive boost in income for retailers each year. In 2015, representatives from SouthPark and Northlake malls told the Observer many stores would offer discounts in lieu of the holiday in order to attract back-to-school shoppers.
But critics say tax free holidays are nothing more than flashy political tactics that distract from more substantial tax reforms that could be more beneficial.
A 2024 article from The Tax Foundation, a nonpartisan tax policy nonprofit, says the holidays do not increase school-year shopping done at local stores. Instead, they consolidate shopping that would otherwise be done across many weeks to just one weekend. It also said the conversation regarding tax-free weekends often ignores the burden sales tax may place on people all year.
Across the county, 19 states will hold at least one tax free holiday in 2024, according to The Tax Foundation.
In South Carolina, there’s not as much buzz around tax-free weekend today as there was when it was implemented in 2000, said Sherry East, the president of the South Carolina Education Association. But stores are still busy, she said, and she occasionally avoids shopping during the holiday because of crowds.
“I do think it’s a benefit to our families here in South Carolina, and it’s kind of a marketing tool to get people out because… you may or may not get all tax free items,” East said.
East said there’s been more debate recently in South Carolina around whether tax free holidays are beneficial for the state. But for the average family, she said the weekend can be a good way to save.
McCrory told the Observer a tax free weekend revival not attached to a comprehensive plan can be “a gimmick.”
“I think it ought to be combined as a package,” he said. “Is it part of a total plan with an overall strategy... or is it just limited to appeal to a certain segment of voters and to get a lot of free publicity?”
In addition to a tax free weekend, Stein proposed a yearly $300 stipend for teachers who he said are spending their own money buying school supplies like crayons and glue sticks for their classrooms.
Stein also said he would offer free meals to every public school student in the state, making sure children have access to nutritious, locally-sourced foods during the school day.
“Public education is not a Republican issue. It is not a Democratic issue. It is not a concern of independent voters alike. It is a North Carolina issue,” he said. “It’s time we stand up for North Carolina’s children.”
This story was originally published August 21, 2024 at 6:00 AM with the headline "Democrat Josh Stein wants to bring back tax-free holiday. Does it really help families?."
