Receiving the piercing horn of tax reform

By Scott Mooneyham | Nov 25, 2013

RALEIGH -- When it comes to taxes, the state's current political leadership has been pushing the idea that simpler is better.

It's a nice theory.

The reality is that the complex tax code that state lawmakers revised in favor of a slightly simpler, cheaper version was born of a mishmash of policy objectives, industry and interest group carve outs, and notions of fairness that developed over 50 or even 100 years.

None of that means that policymakers shouldn't strive for simplicity.

But when they do, someone's ox can and often will be gored.

In North Carolina, a lot of oxen have been gored. Some of the owners are just now realizing it.

Movie theaters, and their ticket prices, are one example. Joining them are most other entertainment venues.

In January, the state sales tax will be applied to ticket prices at movie theaters and for admission to other forms of entertainment.

State legislators have been discussing whether the same sales tax should apply to nonprofits, like local arts councils, when they hold plays, musical events or art exhibits.

The new tax law provides no exemptions for nonprofits, and so they will soon fall under the same tax provisions, meaning the price of admission will rise between 6.75 and 7.5 percent, depending on the county and its local sales tax rate.

Some legislators are not happy with that change, and were hoping for some kind of reprieve. Instead, it looks like the Republican conductors of the tax overhaul train will move in the other direction.

They want to apply the same tax to entertainment provided by state entities.

So. by next year's State Fair, fairgoers could see the sales tax added to their ticket prices. So could attendees at the North Carolina Symphony.

After all, it is all about simplicity, treating everyone the same.

Those are easy enough words to mouth when the public isn't raising a ruckus. Soon we will see how wide and how deep any public pushback becomes, and whether that leads to a few Damascus Road conversions in favor of a bit more complexity.

Already, movie theater owners and the heads of nonprofit groups are squawking, saying they will let their customers know who is to blame.

But maybe any furor dies down. Maybe patrons don't notice the difference. Maybe they see it as just another way that consumers are always being nickeled and dimed.

Then again, more oxen are being prepped for their own piercing, whether utility customers who will see the sales tax fully applied to their power bills or the parents of college students who will likely be paying the tax on meal plans.

A tax rewrite inevitably meant there would be winners and losers.

A lot of the winners knew that they were winners the day legislators passed a tax overhaul.

A lot of the losers are only now being notified.

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