Senate Finance Committee passes improved local sales tax bill | Eastern North Carolina Now

For Immediate Release:

    The Senate Finance Committee passed a revised version of H1224 (Local Sales Tax Options/Econ. Dept. Changes) on Tuesday night that gives additional sales tax flexibility to 94 counties but limits options for Forsyth, Guilford, Mecklenburg and Wake counties. The bill allows counties to increase the local sales tax to 2.5 cents in increments of ¼ cent and gives counties the option to dedicate the new sales taxes to education, transit or general purpose or any combination of two of the three. Counties that are at 2.25 cents already could only adopt an additional ¼ cent sales tax. Counties that are currently at 2 cents could adopt either one additional ½ cent sales tax, or two additional ¼ cent sales taxes. Durham and Orange counties, which are both currently at 2.75 cents, would be granted no additional taxing authority.

    The committee heard several versions of the bill, including a previous version that would have eliminated the current authority for counties to adopt a general use quarter-cent sales tax and would instead have restricted counties to adopt a quarter-cent sales tax for education and/or a quarter-cent sales tax for public transportation. That version was approved by the Finance Committee last week but was sent back to the committee after counties raised objections to the restrictions. Finance Committee members listened to counties’ concerns over losing the flexibility of a general purpose sales tax and actually wound up giving counties the authority to adopt a general purpose sales tax of up to ½ cent. The Association thanks counties for communicating their concerns to committee members.

    The bill also places a cap on local sales taxes at 2.5 cents (Durham and Orange are excluded), which takes away existing authority to go to 2.75 cents for Forsyth, Guilford, Mecklenburg and Wake counties. The NCACC is concerned about the cap’s immediate impact on those four counties and also the future ramifications the cap could have on property taxes. The Legislature has a long history of granting to counties additional sales tax authority to help counties meet increased demand for services due to our state’s continued growth.

    The bill next goes to the Senate floor and, if approved, will be sent to the House.

    Contact: Todd McGee,

     (919) 715-7336  •  todd.mcgee@ncacc.org