- Associated Press - Wednesday, June 1, 2016

RALEIGH, N.C. (AP) - The major-party candidates for North Carolina governor called Wednesday for changes to newly expanded sales taxes, which add to the cost of car repairs and other blue-collar services but don’t hit white-collar work such as accounting and legal advice.

Republican Gov. Pat McCrory and Democratic Attorney General Roy Cooper spoke separately to about 100 small business owners who were in Raleigh to lobby the General Assembly for help for mom-and-pop companies. Both touched on the new sales taxes, a sore point for the state chapter of the National Federation of Independent Business.

Businesses that perform repair, maintenance, and installation services became subject to collecting sales tax three months ago. Now they’re required to collect sales tax from each customer, account for the money and turn it over to the state.

These services include reupholstering furniture, patching tires, mending clothes, troubleshooting computer software, repairing cell phones, tinting vehicle windows and tuning up autos, lawnmowers and chain saws.

Small-business owners object to being pressed into service as tax collectors, NFIB state director Gregg Thompson said.

A survey of the group’s members last year found more than eight of 10 opposed expanding North Carolina’s sales tax to include business and professional services.

A former Republican legislator himself, Thompson said he knows lawmakers were aiming to offset corporate and personal income tax cuts with the more sales taxes. But taxing only blue-collar work and not the services provided for and used by wealthier people is unfair, he said.

“Tax none or all,” Thompson told The Associated Press. “It’s just not fair to make the smaller business owner, who has the most difficult time, become a tax collector for the state and not those who have accounting firms.”

McCrory said he wants some modest changes to the expanded sales tax, which he opposed but signed into law anyway as part of last year’s budget package. But he said he doesn’t yet know what changes to make, and declined to comment on whether it’s fair to tax blue-collar work while exempting white-collar services.

“I think we just need to make some modifications to correct any potential small deficiencies that were in past reforms,” McCrory said.

Cooper also didn’t suggest what changes he would make, but acknowledged that the services tax has been confusing for small businesses.

“That has hit every day working people very hard,” he said.

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Follow Emery P. Dalesio on Twitter at http://twitter.com/emerydalesio . His work can be found at http://bigstory.ap.org/content/emery-p-dalesio .

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