THE VIRGINIAN-PILOT 
              Copyright (c) 1997, Landmark Communications, Inc.

DATE: Wednesday, January 1, 1997            TAG: 9701010265
SECTION: LOCAL                   PAGE: B2   EDITION: NORTH CAROLINA 
SOURCE: ASSOCIATED PRESS 
DATELINE: RALEIGH                           LENGTH:   36 lines

STATE TAX ON FOOD IS CUT TO 3 PERCENT TODAY

Coupon clippers and other penny-wise grocery shoppers had a good reason for waiting to go to the supermarket this week, and it wasn't to take advantage of after-Christmas bargains at department stores.

The state sales tax on food and non-prescription drugs drops from 4 percent to 3 percent on Wednesday, and that means a little more money in consumers' pocketbooks.

``If a consumer waits to do this week's big shopping until Wednesday, that $100 worth of groceries will cost a dollar less,'' state Rep. Paul Luebke said Monday.

The Legislature agreed this year to reduce the state's portion of the sales tax on food to 3 percent on Jan. 1. The 2 percent tax levied by local governments will remain the same.

Luebke and others want to do away with the tax completely.

``The sales tax on food is no different than the salt tax and the tax on tea that caused the American Revolution,'' said Albert Sawyer, a board member of the N.C. Consumers Council. ``It's time we have another American Revolution and get rid of the food tax. It's a sin.''

The sales tax on food was created 35 years ago as a temporary measure to finance education programs, but it has been around ever since.

Luebke said two-thirds of state lawmakers support repealing the entire tax and that the other third would sign on if definitive ways were found to make up the loss of revenue.

Meanwhile, corporations also are getting a tax break with the dawning of the new year. Their state income tax rate will drop from 7.75 percent to 7.5 percent.

KEYWORDS: SALES TAX FOOD TAX