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North Carolina Looking to Boost the Car Tax
A top lawmaker wants North Carolina to more than double its car tax.

Senator Daniel G. ClodfelterA senior North Carolina legislator is looking to more than double the tax imposed on the purchase of new and used cars. Senator Daniel G. Clodfelter (D-Charlotte), co-chairman of the Senate Finance Committee, introduced his plan to raise the vehicle sales tax from 3 percent to 6.75 percent in March. The legislation would also eliminate the practice of subtracting the value of a used, trade-in automobile when calculating the total sales price of a new car.

With the average price of a new car at $28,400, the tax would cost the average car buyer an extra $1515, including the value lost from a five-year-old trade-in.

Last year, North Carolina's 696 car dealers sold $17.3 billion worth of new and used cars. As the industry account for one-fifth of all retail sales in the state and employs 7.5 percent of its workers, dealers say that the economic impact of the proposal would be devastating.

"To ask North Carolinians to pay an additional $900 million in taxes each year would add approximately $20.00 to each consumer's monthly car payment," North Carolina Automobile Dealers Association President Robert Glaser said. "This proposal represents the single largest tax increase on car and truck consumers in North Carolina's history."

Clodfelter introduced the bill to raise revenue for the highway trust fund, allowing existing budget dollars to be used for increased spending on social programs.

Source: Senate Bill 1201 (North Carolina General Assembly, 7/6/2007)

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