North Carolina losing money online

Online shopping for collegiate sports merchandise is causing the state to lose a significant amount of sales tax revenue.

Universities like UNC that have hired out-of-state companies to manage their websites do not charge sales tax for merchandise purchased online.

UNC administrators are now considering adding a sales tax to the online purchases to prevent further loss of money for the state.

Rick Steinbacher, associate athletic director for UNC, said the University hopes to come up with a solution — possibly adding a sales tax — this week.

“We have been working with the University Council and Finance and Administration,” he said.

The company that runs the University’s online merchandise website is maintained by CBS Sports.com College Network, which has locations based outside North Carolina.

Because of its location, the company has no incentive to charge a sales tax.

Chapel Hill Sportswear sells University merchandise on Franklin Street.

The store sells through the University’s athletic gear site.

Store manager Holly Dedmond said orders that are shipped outside of the state are not charged a sales tax.

A few stores down from Chapel Hill Sportswear, Tarheel Bookstore charges the North Carolina sales tax. The company running its website has an office in North Carolina.

Manager of the store Christian Campbell said that stores like Chapel Hill Sportswear are drawing customers because they don’t have to charge the extra 7.75 percent tax.

“All I can do is voice my opinion and write to my congressman,” he said.

Shipments sent out of state do not have the sales tax, and it is technically the responsibility of out-of-state consumers to report the tax, Campbell said.

N.C. Rep. Paul Stam, R-Wake, said that many people justify not charging sales tax online because they think the government is not providing the same services in cyberspace as they would for a store, like police protection and public parking.

According to the state’s constitution, tax transactions can only take place when there is a connection to the state, he said.

Stam said that though having no sales tax is hurting the state, the lower prices are beneficial to customers.

“The policy benefits the university by being able to sell cheaper items and it benefits the people that pay for the items,” Stam said.

Though it’s cheaper for buyers, Stam said he hopes that the policy will change in order to help the state.

“North Carolinians should be the last ones to try to avoid that tax,” Stam said.

Contact the State & National Editor at stntdesk@unc.edu.