Sales tax: you pay it, but where does it go?

Here’s an excerpt from the Asheville Citizen-Times article:

It’s bright downtown Friday and David Long of Greenville, S.C., hands Tom Williams, owner of Asheville Shades & Market Basket, $8.51 for a pair of sunglasses for his girlfriend’s 2-year-old daughter, McKenzie Hudson.

That’s $7.95 for the store and 56 cents in sales tax.

Even through tough economic times, shoppers such as Long and his girlfriend Amy Hudson, of Asheville, have continued to crowd Williams’ store and other city retailers to buy food, clothes and other merchandise. They have also paid sales tax, to the tune of more than $120 million.

That should be enough to keep municipal coffers overflowing. But instead, the city now finds itself struggling to pay for basic services, including police, road repairs and downtown sidewalk maintenance.

What makes the situation more perplexing is that about $135 million of Buncombe County’s $180 million in annual sales tax comes from Asheville businesses. But because of complex state laws only about $14 million finds its way back to the city.

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