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Tuesday, 02 April 2024
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Written by John Hood
I think the North Carolina General Assembly deserves loads of credit for making our tax code friendlier to growth, investment, and freedom. In one respect, however, the state still imposes too heavy a load. It requires too many out-of-state retailers to collect and remit sales taxes. Lawmakers ought to fix this problem when they reconvene April 24.
Yes, I know it may sound odd to prioritize a tax change that, by definition, won’t benefit businesses based here. But hear me out. Our current filing threshold is unfair and out of step with that of most Southeastern states. Moreover, changing it will have only a modest impact on our future revenues.
First, some background. Until fairly recently, a state or local jurisdiction couldn’t really compel a company to charge and remit sales taxes unless it was headquartered or had a substantial physical footprint in the jurisdiction.
The rise of online commerce rendered that standard increasingly hard to defend. In 2018, the U.S. Supreme Court issued a pivotal decision in a case called South Dakota vs. Wayfair. Rather than requiring a physical presence in a jurisdiction to establish a “nexus” for tax purposes, the majority ruled that it would be enough to have a significant economic presence in the jurisdiction.
In other words, if a company in Oregon does a substantial amount of business with consumers in North Carolina, the company ought to be required to collect and pay sales tax to North Carolina. Otherwise, competing retailers in North Carolina have to shoulder higher compliance costs and charge higher prices (because there’s a sales tax embedded in them).
Moreover, the argument goes, that governments charge sales taxes in order to pay for public services. While it makes intuitive sense that businesses with a physical presence in a jurisdiction collect taxes to help pay for the services that make their operations possible, even remote sellers and their customers benefit from some public services (one example might be courts for adjudicating potential disputes) and thus ought to have a role in financing those services. Rightly or wrongly, the four-justice majority agreed.
Now, Wayfair doesn’t allow governments to compel all retailers in the country to collect and remit sales taxes, regardless of how much business they do within a given jurisdiction. The justices ruled that small retailers ought not be unduly burdened, though they left it up to states to set the minimum thresholds that would trigger sales-tax liability.
Manish Bhatt, a senior policy analyst at the Tax Foundation, observed in a recent study that states with sales taxes have chosen three different solutions. Twenty-five states — including our neighbors South Carolina, Tennessee, and Georgia — use a minimum dollar amount of retail sales as the threshold. Another 19 states, including North Carolina, require that retailers with a minimum revenue or a minimum number of retail transactions in their jurisdictions collect and remit sales taxes. Finally, Connecticut and New York require both a minimum revenue and a minimum number of transactions to trigger sales-tax liability.
Bhatt argued that the transactions threshold should go. “Establishing economic nexus through transactions alone is quite burdensome,” he wrote, “as compliance costs associated with collection and remittance requirements could be greater than the business transacted.”
North and South Carolina illustrate the difference. Both states have set the minimum sales figure at $100,000 a year. But only North Carolina requires that out-of-state retailers with less than $100,000 in annual sales still file taxes if they conduct at least 200 transactions in the current or prior year.
If your company is doing less than $100,000 in sales here, your “economic presence” in North Carolina is minuscule. Our sales-tax rule may make you doing business here a waste of your time. I’d rather let North Carolinians decide from whom they buy goods and services. Our state should adopt South Carolina’s standard.
Editor’s note: John Hood is a John Locke Foundation board member. His latest books, Mountain Folk and Forest Folk, combine epic fantasy with early American history (FolkloreCycle.com).
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Tuesday, 26 March 2024
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Written by Staff Report
Easter Sunday is a significant day on the Christian calendar. Easter Sunday will be celebrated on March 31, and many of those celebrations will feature some notable traditions.
Some traditions are undoubtedly familiar to practicing Christians, while others might come as a surprise. As Easter approaches, faithful Christians and others intrigued by the holiday can consider these notable traditions from around the globe.
Easter witches
Witches are typically associated with Halloween, but they play a role in celebrating Easter in Finland. According to the Finland Promotion Board, Easter traditions in the northern European nation feature a mixture of religious references with customs related to the arrival of spring.
It is not unheard of for young Finnish children, particularly girls, to dress up as Easter witches the Sunday before Easter and go from door to door requesting treats in exchange for offerings designed to drive away evil spirits. The FPB notes that it is even common for children in western Finland to don their witch outfits and roam on Easter Sunday.
Fireworks in Florence
The folk tradition of Scoppio del Carro "Explosion of the Cart" takes place in Florence, Italy. The Uffizi Gallery reports that this tradition can be traced to the First Crusade in 1099. During the first Easter in Jerusalem, Crusaders gave the blessed fire to the people as a symbol of purification.
That custom has endured in Florence, where each Easter Sunday morning around 10 a.m. a candle is lit in the church of Santi Apostoli. That same candle is then used to light an antique cart loaded with fireworks, marking the beginning of a display that lasts around 20 minutes.
The Carpets of Semana Santa
Carpets might not be the first thing most Easter celebrants think of when pondering the holiday, but that might be the case for anyone who ever spent the holiday in Antigua, Guatemala. Guatemala's Semana Santa "Easter Festival" features detailed carpets of colored sawdust adorning a Good Friday processional route.
Preparation for the colorful and stunning display begins months in advance as the intricate carpets require ample time to produce.
Whips in the Czech Republic
Among the more unique Easter traditions takes place each Easter Monday in the Czech Republic. In adherence to this tradition, known locally as pomlizka, boys, and sometimes men, gather willow branches and braid them together into whips.
The whips are then decorated with ribbons before boys visit girls (or men visit women) whom they know and lightly tap them with the whips. The tradition is believed to bring women luck, vitality and fertility.
These are just some of the unique traditions many Christians adhere to as part of their Easter celebrations.
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