Tax tobacco, beer, not N.C. newspapers

Gov. Mike Easley is proposing a lot of new sales taxes, including a 7 percent tax on newspaper circulation, as part of his plan to balance the state budget. As you might expect, we oppose that tax and urge our lawmakers to continue the exemption that has always been there for newspapers in North Carolina. We could make the usual argument that putting a tax burden on newspapers weakens an industry that plays a vital role in ensuring the free flow of information to the public. Lawmakers don’t always listen to such lofty arguments, so here are some more practical reasons:
· Most of the newspapers in North Carolina, such as the Lincoln Times-News, are small businesses. Of the 200 members of the North Carolina Press Association, 150 are community newspapers that publish weekly, or at most, three times a week. Of the 49 daily newspapers, 41 have circulations under 35,000. These small businesses contract with individual citizens to deliver news and information that benefits their communities.
· Such a tax will be impractical because it will impact those who deliver papers. These are almost universally people who do not now pay sales tax on other items, so it isn’t just a matter of writing the state a check for a different amount.
· A few years ago Texas rescinded sales tax collection on newspapers because it was an administrative nightmare.
· Most newspapers, like other businesses, will pass a sales tax on to their customers, the readers.
· Taxing newspaper circulation would be inequitable. There is no tax to be paid by TV viewers or radio listeners.
· No reader buys his newspaper for its weight in newsprint and ink. A newspaper is a collection of informative stories. A sales tax amounts to a tax on the process of informing people about what’s going on in the world.
· Most other states do not tax newspapers.
We concede the state needs to balance the budget. There are other ways to do it, such as that proposed by Senate President Marc Basnight. He has said the answer to that problem is an increase in cigarette tax and beer sales. Certainly, these are industries whose services to the public are not near as important as that provided by North Carolina’s newspapers.