Sales tax increase means consumers should act fast

by Sarah Rice (srice@wsbt.com)

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Sales tax in Indiana will go up to 7 percent beginning April 1, 2008

Sales tax in Indiana will go up to 7 percent beginning April 1, 2008. (WSBT photo)

By WSBT News1

SOUTH BEND — If you shop in Indiana, you'll soon be forking over more money for just about everything, except food.

The new property tax relief plan includes a 1 percent hike in the sales tax. It will go to 7 percent.

So if you're in the market for big ticket items, you better act now.

With three kids, Stephanie Mead is no stranger to spending money.

"Every time the season hits you have to buy new clothes because they grow," she said. "I spend an average of $50 a month on clothes." That doesn't even include clothes for Mom and Dad.

According to the U.S. Department of Labor, the average family spends $1,874 a year on clothes. With the 1 percent increase, families will be spending $18.75 more. Some consumers say these increases won't have much of a impact on their budget.

"But when we get ready to do a big purchase like a car or anything of that magnitude it really is going to hurt," said consumer Susan Pearson.

At car dealerships like Gurley Leep GMC, the average price for a new car is $40,000.

After the increase people will pay $400 more in sales tax. That's why dealers are offering a special sale.

"It can provide a substantial savings to people if they do act before the end of the month, especially on the new vehicles with some of the prices on them," said Gurley Leep GMC General Manager Tom Tenhove.

At the beginning of April Gurley Leep anticipates consumers may hesitate to buy.

"It definitely is going to impact and have us trying to hold off," said Pearson.

The sales tax increase takes effect April 1.

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