Senate approves conference report on H1224 | Eastern North Carolina Now

For Immediate Release:

   •  H1224 grants flexible sales taxing authority for counties but limits overall tax levy at 2.5 cents

   •  Grandfathers in counties with current levy authority of 2.75 cents, if ballot successful on or before Dec. 31, 2014

    The Senate adopted the conference committee report for H1224 (Local Sales Tax Options/Econ. Devpt. Changes) Thursday night. This bill would grant more flexibility to counties in the use of existing sales tax authority. Counties may elect to levy up to .5% in 1/4 cent increments for education, public transit, and/or general public purposes, with voter approval. These sales tax levies do not apply to food sales and are not shared with cities.

    Six counties (Mecklenburg, Wake, Guilford, Forsyth, Orange and Durham) currently have authority to levy up to 2.75 cents in sales taxes, with one-half cent dedicated to transit purposes. Orange and Durham have already levied the one-half cent transit tax in addition to the Article 46 general purpose quarter-cent sales tax, putting their local rate at 2.75 cents. Mecklenburg has levied the half-cent transit tax. The remaining 94 counties currently have existing authority to levy 2.5 cents, but one-quarter penny must be used for transit purposes.

    This bill expands the use of the transit tax for all counties. For the 27 counties that have previously enacted the Article 46, the bill allows another quarter-cent that can be designated for transit needs, public education needs or general purposes. For the counties that have not approved the Article 46 or the transit tax, they may consider a half-cent for any of these purposes, or either two quarter-cent sales taxes for two of the three uses.

    Like earlier versions of the bill, the conference report caps overall county sales tax levies at 2.5 cents. The legislation grandfathers in Orange and Durham, who will be allowed to stay at 2.75 cents. Wake, Mecklenburg, Guilford and Forsyth will be capped at 2.5 cents unless their voters approve the Article 46 quarter-cent sales tax prior to Dec. 31, 2014. Guilford and Mecklenburg have already scheduled a referendum on the Article 46 for November, and Wake is considering it.

    The conference report is scheduled for House approval today. It contains other crucial measures for economic development and revenue laws technical corrections.

    Below is a chart that depicts these new options; each quarter-cent raises about $250 million statewide.

    Contact: Todd McGee,

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