Possible tax increase on services - WBTV 3 News, Weather, Sports, and Traffic for Charlotte, NC

Possible tax increase on services

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CHARLOTTE, NC (WBTV) -

Susan Johnson started her pet grooming business five years ago.  It was something she's always wanted to do.

"Being with animals every single day - it's not work," she says. "It's a passion."

But Johnson's dream could be in jeopardy if the state starts taxing her services. She says customers already suffering from years of sluggish economic conditions won't be willing to pay more.

"This is not what we need right now," Johnson says. "You're certainly doing harm to the business, to the consumer, everybody concerned. I really think it's terrible thing to do at this particular point in time."

Right now, though, lawmakers in the House and the Senate are considering a plan that would add taxes to many services currently tax-free.  Not just dog grooming, but people grooming too.

If your trip to the salon got more expensive, would you continue to go? Stylist Jody Todd says that even if, say, 10% of her customers decided to cut back...

"It would definitely hurt my business," she says. "Ten percent is quite a bit. I mean, I would have to go do something else. It would affect everybody I think. It's expensive enough to get services done right now."

It would add new taxes to about 130 types of services - carpentry, lawn mowing,  health clubs, car washes...the list goes on and on.

Governor Pat McCrory did not address the issue while unveiling his budget recommendations today, perhaps due to time constraints.

"I want to let you know this process has gone on about ten weeks," McCrory said during a press conference in Raleigh on Wednesday. "Not a long period of time to build a $20 billion budget."

In the past, he has, however, said he is in favor of tax reform. McCrory's recommendations are just the beginning of what will be a long budget process.

Senator Bob Rucho, of Matthews, has said it makes sense for the state to refocus its taxing structure, focusing on services because people spend more now on them verses tangible goods.

Rucho has also supported eliminating all income taxes.

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