The new law is part of a major tax code overhaul that was recently passed by state lawmakers.
Based on their county sales tax rate, consumers will now be paying the same percentage for the new ‘labor tax’ on services like car repairs and home repairs (including roofing, painting, carpet installation, and appliance repairs).
North Carolina’s sales tax rates range from 6.75 percent to 7.5 percent and vary by county, meaning that a car repair that includes $200 in labor fees will cost up to $15 more starting today.
Many Charlotte area auto repair shops are now worried that customers will start heading across the state line to save money on a labor tax for pricey repairs (especially since many drivers are already crossing the state line to get cheaper gas). Some drivers have started buying their motor oil online, saying that they will now be changing it at home.
State lawmakers added the new service tax so they could lower certain income and corporate taxes, in addition to helping poor schools throughout the state. About $84.8 million in new revenue will be divided among 79 suburban and rural counties for schools, community colleges and economic development projects.