As North Carolina legislators work to finalize a budget, the state’s massage therapists and spa owners wait to see if a proposed plan to require sales tax on massage and other services comes to fruition.

Proponents of the tax say it will generate about $150 million for the state by this time a year from now.

A June 23 article in Raleigh’s newspaper, The News & Observer, noted, “For decades, the state’s economy has been shifting from retail goods and manufacturing toward service industries. Proponents of tax reform say tax codes that do not include services are outdated … ‘States put these systems together when the country was a predominantly goods-based economy,” said Bert Waisanen, a fiscal analyst for the National Council of State Legislatures. “We are now a service-based economy.'”

Opponents of the proposed tax say it will place an undue burden on small-business owners who are already feeling the impact of a sluggish economy.
 
[Spas] in Greensboro have been forced to downsize or cut staff or pay due to the strain of local financial woes suffered by their clients,” North Carolina spa consultant Felicia Brown told MASSAGE Magazine. “I can only imagine the impact on the rest of the spa and healing arts professionals in our state … adding a tax to personal services such as the ones offered by these businesses and professionals will hurt them even more.”

Brown suggests massage therapists contact their legislators with input on the proposal.

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