Article 40.

First One-Half Cent (1/2) Local Government Sales and Use Tax.

105-480.  Short title.

This Article shall be known as the First One-Half Cent (1/2) Local Government Sales and Use Tax Act. (1983, c. 908, s. 1; 2002-123, s. 8(b).)

 

105-481.  Purpose and intent.

It is the purpose of this Article to afford the counties and cities of this State an opportunity to obtain an added source of revenue with which to meet their growing financial needs, and to reduce their reliance on other revenues, such as the property tax, by providing all counties of the State that are subject to this Article with authority to levy one-half percent (1/2%) sales and use taxes. (1983, c. 908, s. 1.)

 

105-482.  Limitations.

This Article applies only to counties that levy one percent (1%) sales and use taxes under Article 39 of this Chapter or under Chapter 1096 of the 1967 Session Laws. (1983, c. 908, s. 1; 1993, c. 485, s. 25.)

 

105-483.  Levy and collection of additional taxes.

     Any county subject to this Article may levy one-half percent (1/2%) local sales and use taxes in addition to any other State and local sales and use taxes levied pursuant to law.  Except as provided in this Article, the adoption, levy, collection, distribution, administration, and repeal of these additional taxes shall be in accordance with Article 39 of this Chapter.  In applying the provisions of Article 39 of this Chapter to this Article, references to "this Article" mean Article 40 of this Chapter.  The exemption for building materials in G.S. 105-468.1 does not apply to taxes levied under this Article. (1983, c. 908, s. 1; 1993, c. 485, s. 26.)

 

105-484.  Form of ballot.

(a)        The form of the question to be presented on a ballot for a special election concerning the additional taxes authorized by this Article shall be: "FOR additional one-half percent (1/2%) local sales and use taxes" or "AGAINST additional one-half percent (1/2%) local sales and use taxes."

(b)        The form of the question to be presented on a ballot for a special election concerning the repeal of any additional taxes levied pursuant to this Article shall be: "FOR repeal of the additional one-half percent (1/2%) local sales and use taxes" or "AGAINST repeal of the additional one-half percent (1/2%) local sales and use taxes." (1983, c. 908, s. 1.)

 

105-485:  Repealed by Session Laws 1991, c.  689, s. 318.

 

105-486.  Distribution of additional taxes.

(a)        County Allocation. - The Secretary shall, on a monthly basis, allocate the net proceeds of the additional one-half percent (1/2%) sales and use taxes levied under this Article to the taxing counties on a per capita basis according to the most recent annual population estimates certified to the Secretary by the State Budget Officer.

(b)        Adjustment. - The Secretary shall then adjust the amount allocated to each county under subsection (a) by multiplying the amount by the appropriate adjustment factor set out in the table below. If, after applying the adjustment factors, the resulting total of the amounts allocated is greater or lesser than the net proceeds to be distributed, the amount allocated to each county shall be proportionally adjusted to eliminate the excess or shortage.

County                                                                                                              Adjustment Factor

Dare                                                                                                                                            1.49

Brunswick                                                                                                                                   1.17

Orange                                                                                                                                        1.15

Carteret and Durham                                                                                                                  1.14

Avery                                                                                                                                          1.12

Moore                                                                                                                                          1.11

Transylvania                                                                                                                                1.10

Chowan, McDowell, and Richmond                                                                                          1.09

Pitt and New Hanover                                                                                                                1.07

Beaufort, Perquimans, Buncombe, and Watauga                                                                       1.06

Cabarrus, Jackson, and Surry                                                                                                      1.05

Alleghany, Bladen, Robeson, Washington, Craven, Henderson,                                               1.04

       Onslow, and Vance

Gaston, Granville, and Martin                                                                                                    1.03

Alamance, Burke, Caldwell, Chatham, Duplin, Edgecombe,                                                    1.02

       Haywood, Swain, and Wilkes

Hertford, Union, Stokes, Yancey, Halifax, Rockingham, and                                                   1.01

       Cleveland

Alexander, Anson, Johnston, Northampton, Pasquotank, Person,                                             1.00

       Polk, and Yadkin

Catawba, Harnett, Iredell, Pamlico, Pender, Randolph, Stanly, and                                         0.99

       Tyrrell

Cherokee, Cumberland, Davidson, Graham, Hyde, Macon,                                                      0.98

       Rutherford, Scotland, and Wilson

Ashe, Bertie, Franklin, Hoke, Lincoln, Montgomery, and Warren                                            0.97

Wayne, Clay, Madison, Sampson, Wake, Lee, and Forsyth                                                      0.96

Caswell, Gates, Mitchell, and Greene                                                                                        0.95

Currituck and Guilford                                                                                                               0.94

Davie and Nash                                                                                                                          0.93

Rowan and Camden                                                                                                                   0.92

Jones                                                                                                                                           0.90

Mecklenburg                                                                                                                               0.89

Lenoir                                                                                                                                          0.88

Columbus                                                                                                                                    0.81

(c)        Distribution Between Counties and Cities. - The amount allocated to each taxing county shall then be divided among the county and its municipalities in accordance with the method by which the one percent (1%) sales and use taxes levied in that county pursuant to Article 39 of this Chapter or Chapter 1096 of the 1967 Session Laws are distributed.

(d)       No municipality may receive any funds under this section if it was incorporated with an effective date of on or after January 1, 2000, and is disqualified from receiving funds under G.S. 136-41.2. No municipality may receive any funds under this section, incorporated with an effective date on or after January 1, 2000, unless a majority of the mileage of its streets are open to the public. The previous sentence becomes effective with respect to distribution of funds on or after July 1, 1999. (1983, c. 908, s. 1; 1985 (Reg. Sess., 1986), c. 906, s. 2; 1987, c. 832, s. 6; 1987 (Reg. Sess., 1988), c. 1082, s. 2; 1999-458, s. 7; 2001-427, s. 13(b), (c).)

 

105-487.  Use of additional tax revenue by counties.

(a)        Except as provided in subsection (c), forty percent (40%) of the revenue received by a county from additional one-half percent (1/2%) sales and use taxes levied under this Article during the first five fiscal years in which the additional taxes are in effect in the county and thirty percent (30%) of the revenue received by a county from these taxes  after the first five fiscal years in which the taxes are in effect in the county may be used by the county only for public school capital outlay purposes as defined in G.S. 115C-426(f) or to retire any indebtedness incurred by the county for these purposes.

(b)        Repealed by Session Laws 1998-98, s. 31, effective August 14, 1998.

(c)        The Local Government Commission may, upon petition by a county, authorize the county to use part or all its tax revenue, otherwise required by subsection (a) of this section to be used for public school capital needs, for any lawful purpose. The petition shall be in the form of a resolution adopted by the Board of County Commissioners and transmitted to the Local Government Commission. The petition shall demonstrate that the county can provide for its public school capital needs without restricting the use of part or all of the designated amount of the additional one-half percent (%) sales and use tax revenue for that purpose.

In making its decision, the Local Government Commission shall consider information contained in the petition concerning not only the public school capital needs, but also the other capital needs of the petitioning county. The Commission may also consider information from sources other than the petition. The Commission shall issue a written decision on each petition stating the findings of the Commission concerning the public school capital needs of the petitioning county and the percentage of revenue otherwise restricted by subsection (a) of this section that may be used by the petitioning county for any lawful purpose.

Decisions of the Commission allowing counties to use a percentage of their tax revenue that would otherwise be restricted under subsection (a) of this section for any lawful purpose are final and shall continue in effect until the restrictions imposed by that subsection expire. A county whose petition is denied, in whole or in part, by the Commission may subsequently submit a new petition to the Commission.

(d)       For purposes of determining the number of fiscal years in which one-half percent (%) sales and use taxes levied under this Article have been in effect in a county, these taxes are considered to be in effect only from the effective date of the levy of these taxes and are considered to be in effect for a full fiscal year during the first year in which these taxes were in effect, regardless of the number of months in that year in which the taxes were actually in effect.

(e)        A county may expend part or all of the revenue restricted for public school capital needs pursuant to subsection (a) of this section in the fiscal year in which the revenue is received, or the county may place part or all of this revenue in a capital reserve fund and shall specifically identify this revenue in accordance with Chapter 159 of the General Statutes.  (1983, c. 908, s. 1; 1993, c. 255, ss. 1, 3; 1998-98, s. 31; 1998-186, s. 1; 2009-395, s. 1.)