Article 44.
Third One‑Half Cent (1/2’) Local Government Sales and Use Tax.
(Effective Until October 1, 2009)
§ 105‑515. (Effective until October 1, 2009 see Editor's note) Short title.
This Article is the Third One‑Half Cent (1/2’) Local Government Sales and Use Tax Act. (2001‑424, s. 34.14(a).)
Article 44.
Local Government Hold Harmless Provisions.
(Effective October 1, 2009)
§ 105‑515: Repealed by Session Laws 2007‑323, s. 31.16.4(a), effective October 1, 2009, and applicable to sales occurring on or after that date.
§ 105‑516. (Effective until October 1, 2009) Limitations.
This Article applies only to counties that levy the first one‑cent (1’) sales and use tax under Article 39 of this Chapter or under Chapter 1096 of the 1967 Session Laws, the first one‑half cent (1/2’) local sales and use tax under Article 40 of this Chapter, and the second one‑half cent (1/2’) local sales and use tax under Article 42 of this Chapter. (2001‑424, s. 34.14(a).)
§ 105‑516: Repealed by Session Laws 2007‑323, s. 31.16.4(a), effective October 1, 2009, and applicable to sales occurring on or after that date.
§ 105‑517. (Effective until October 1, 2009) Levy.
(a) After Vote. If a majority of those voting in a special election held pursuant to this Article vote for the levy of the taxes in a county, the board of commissioners of a county may, by resolution, 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.
(b) Without Vote. If the question of whether to levy taxes under this Article has not been defeated in a special election held in the county within two years, the board of commissioners of a county may, by resolution, 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. Before adopting a resolution under this subsection, the board of commissioners must give at least 10 days' public notice of its intent to adopt the resolution and must hold a public hearing on the issue of adopting the resolution.
(c) Effective Date. A tax levied under this Article may not become effective before December 1, 2002. (2001‑424, s. 34.14(a); 2002‑123, s. 1.)
§ 105‑517: Repealed by Session Laws 2007‑323, s. 31.16.4(a), effective October 1, 2009, and applicable to sales occurring on or after that date.
§ 105‑518. (Effective until October 1, 2009) County election on adoption of tax.
(a) Resolution. The board of commissioners of a county may direct the county board of elections to conduct a special election on the question of whether to levy local one‑half percent (1/2%) sales and use taxes in the county as provided in this Article. The election must be held on a date jointly agreed upon by the two boards and must be held in accordance with the procedures of G.S. 163‑287.
(b) Ballot Question. The question to be presented on a ballot for a special election concerning the levy of the taxes authorized by this Article must be in the following form:
[ ] FOR [ ] AGAINST
one‑half percent (1/2%) local sales and use taxes, in addition to all current State and local sales and use taxes.
(2001‑424, s. 34.14(a); 2002‑123, s. 2.)
§ 105‑518: Repealed by Session Laws 2007‑323, s. 31.16.4(a), effective October 1, 2009, and applicable to sales occurring on or after that date.
§ 105‑519. (Effective until October 1, 2009) Administration of taxes.
Except as provided in this Article, the adoption, levy, collection, administration, and repeal of these additional taxes must be in accordance with Article 39 of this Chapter. A tax levied under this Article does not apply to the sales price of food that is exempt from tax pursuant to G.S. 105‑164.13B or to the sales price of a bundled transaction taxable pursuant to G.S. 105‑467(a)(5a). (2001‑424, s. 34.14(a); 2007‑244, s. 8.)
§ 105‑519: Repealed by Session Laws 2007‑323, s. 31.16.4(a), effective October 1, 2009, and applicable to sales occurring on or after that date.
§ 105‑520. (Effective until October 1, 2009) Distribution of taxes.
(a) (Effective until October 1, 2008) Point of Origin. The Secretary must, on a monthly basis, allocate to each taxing county one‑half of the net proceeds of the tax collected in that county under this Article. If the Secretary collects taxes under this Article in a month and the taxes cannot be identified as being attributable to a particular taxing county, the Secretary must allocate one‑half of the net proceeds of these taxes among the taxing counties in proportion to the amount of taxes collected in each county under this Article in that month.
(a) (Effective October 1, 2008) Point of Origin. The Secretary must, on a monthly basis, allocate to each taxing county the net proceeds of the tax collected in that county under this Article. If the Secretary collects taxes under this Article in a month and the taxes cannot be identified as being attributable to a particular taxing county, the Secretary must allocate the net proceeds of these taxes among the taxing counties in proportion to the amount of taxes collected in each county under this Article in that month.
(b) (Repealed effective October 1, 2008 see note) Per Capita. The Secretary must, on a monthly basis, allocate the remaining net proceeds of the tax collected under this Article among 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. The Secretary must then adjust the amount allocated to each county as provided in G.S. 105‑486(b).
(c) Distribution Between Counties and Cities. The Secretary must divide and distribute the funds allocated under this section each month between each taxing county and the municipalities located in the county 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. No municipality may receive any funds under this subsection for a month if it is not entitled to a distribution under G.S. 105‑501 for the same month. (2001‑424, s. 34.14(a); 2007‑323, s. 31.16.3(b).)
§ 105‑520: Repealed by Session Laws 2007‑323, s. 31.16.4(a), effective October 1, 2009, and applicable to sales occurring on or after that date.
§ 105‑521. (Effective until October 1, 2009) Transitional local government hold harmless for repealed reimbursements.
(a) Definitions. The following definitions apply in this section:
(1) Local government. A county or municipality that received a distribution of local sales taxes in the most recent fiscal year for which a local sales tax share has been calculated.
(2) Local sales tax share. A local government's percentage share of the two‑cent (2’) sales taxes distributed during the most recent fiscal year for which data are available.
(3) Repealed reimbursement amount. The total amount a local government would have been entitled to receive during the 2002‑2003 fiscal year under G.S. 105‑164.44C, 105‑275.1, 105‑275.2, 105‑277.001, and 105‑277.1A, if the Governor had not withheld any distributions under those sections.
(3a) Replacement revenue. The sum of the following:
a. Fifty percent (50%) of the amount of sales and use tax revenue distributed under Article 40 of this Chapter, other than revenue from the sale of food that is subject to local tax but is exempt from State tax under G.S. 105‑164.13B.
b. Twenty‑five percent (25%) of the amount of sales and use tax revenue distributed under Article 39 of this Chapter or under Chapter 1096 of the 1967 Session Laws, other than revenue from the sale of food that is subject to local tax but is exempt from State tax under G.S. 105‑164.13B.
(4) Two‑cent (2’) sales taxes. The first one‑cent (1’) sales and use tax authorized in Article 39 of this Chapter and in Chapter 1096 of the 1967 Session Laws, the first one‑half cent (1/2’) local sales and use tax authorized in Article 40 of this Chapter, and the second one‑half cent (1/2’) local sales and use tax authorized in Article 42 of this Chapter.
(b) Distributions. On or before August 15, 2008, and every August 15 through August 15, 2012, the Secretary must multiply each local government's local sales tax share by the estimated amount of replacement revenue that all local governments are expected to receive during the current fiscal year. If the resulting amount is less than one hundred percent (100%) of the local government's repealed reimbursement amount, the Secretary must pay the local government the difference, but not less than one hundred dollars ($100.00).
On or before May 1 of each fiscal year through May 1, 2012, the Department of Revenue and the Fiscal Research Division of the General Assembly must each submit to the Secretary and to the General Assembly a final projection of the estimated amount of replacement revenue that all local governments would be expected to receive during the upcoming fiscal year. If, after May 1 and before a distribution is made, a law is enacted that would affect the projection, an updated projection must be submitted as soon as practicable. If the Secretary does not use the lower of the two final projections to make the calculation required by this subsection, the Secretary must report the reasons for this decision to the Joint Legislative Commission on Governmental Operations within 60 days after receiving the projections.
(c) Source of Funds. The Secretary must draw the funds distributed under this section from sales and use tax collections under Article 5 of this Chapter.
(d) Reports. The Secretary must report to the Revenue Laws Study Committee by January 31, 2004, and each January 31 through January 31, 2013, the amount distributed under this section for the current fiscal year. (2001‑424, s. 34.14(a); 2003‑284, s. 37.1; 2003‑349, s. 6; 2004‑124, s. 6.3; 2007‑323, s. 31.16.3(c).)
§ 105‑521. (Effective October 1, 2009) Transitional local government hold harmless for repealed reimbursements.
(a) Definitions. The following definitions apply in this section:
(1) Local government. A county or municipality that received a distribution of local sales taxes in the most recent fiscal year for which a local sales tax share has been calculated.
(2) Local sales tax share. A local government's percentage share of the two‑cent (2’) sales taxes distributed during the most recent fiscal year for which data are available.
(3) Repealed reimbursement amount. The total amount a local government would have been entitled to receive during the 2002‑2003 fiscal year under G.S. 105‑164.44C, 105‑275.1, 105‑275.2, 105‑277.001, and 105‑277.1A, if the Governor had not withheld any distributions under those sections.
(3a) Replacement revenue. The sum of the following:
a. Fifty percent (50%) of the amount of sales and use tax revenue distributed under Article 40 of this Chapter, other than revenue from the sale of food that is subject to local tax but is exempt from State tax under G.S. 105‑164.13B.
b. Twenty‑five percent (25%) of the amount of sales and use tax revenue distributed under Article 39 of this Chapter or under Chapter 1096 of the 1967 Session Laws, other than revenue from the sale of food that is subject to local tax but is exempt from State tax under G.S. 105‑164.13B.
(4) Two‑cent (2’) sales taxes. The first one‑cent (1’) sales and use tax authorized in Article 39 of this Chapter and in Chapter 1096 of the 1967 Session Laws, the first one‑half cent (1/2’) local sales and use tax authorized in Article 40 of this Chapter, and the second one‑half cent (1/2’) local sales and use tax authorized in Article 42 of this Chapter.
(b) Distributions. On or before August 15, 2008, and every August 15 through August 15, 2012, the Secretary must multiply each local government's local sales tax share by the estimated amount of replacement revenue that all local governments are expected to receive during the current fiscal year. If the resulting amount is less than one hundred percent (100%) of the local government's repealed reimbursement amount, the Secretary must pay the local government the difference, but not less than one hundred dollars ($100.00).
On or before May 1 of each fiscal year through May 1, 2012, the Department of Revenue and the Fiscal Research Division of the General Assembly must each submit to the Secretary and to the General Assembly a final projection of the estimated amount of replacement revenue that all local governments would be expected to receive during the upcoming fiscal year. If, after May 1 and before a distribution is made, a law is enacted that would affect the projection, an updated projection must be submitted as soon as practicable. If the Secretary does not use the lower of the two final projections to make the calculation required by this subsection, the Secretary must report the reasons for this decision to the Joint Legislative Commission on Governmental Operations within 60 days after receiving the projections.
(c) Source of Funds. The Secretary must draw the funds distributed under this section from sales and use tax collections under Article 5 of this Chapter.
(d) Reports. The Secretary must report to the Revenue Laws Study Committee by January 31, 2004, and each January 31 through January 31, 2013, the amount distributed under this section for the current fiscal year. (2001‑424, s. 34.14(a); 2003‑284, s. 37.1; 2003‑349, s. 6; 2004‑124, s. 6.3; 2007‑323, s. 31.16.3(c).)
§ 105‑522. (Effective until October 1, 2009) City hold harmless for repealed local taxes.
(a) Definitions. The following definitions apply in this section:
(1) Eligible municipality. A municipality that was incorporated on or before October 1, 2008, and receives a distribution of sales and use taxes under G.S. 105‑472.
(2) Hold harmless amount. Fifty percent (50%) of the amount of sales and use tax revenue allocated under G.S. 105‑486 for distribution to a municipality.
(b) Requirement. A county is required to hold the eligible municipalities in the county harmless from the repeal of the local sales and use taxes formerly imposed under this Article. The Secretary must add an eligible municipality's hold harmless amount to the amount otherwise allocated to the municipality for distribution under this Subchapter. To obtain the revenue for the hold harmless distribution, the Secretary must reduce the amount otherwise allocated to a county for distribution under Article 39 of this Subchapter or under Chapter 1096 of the 1967 Session Laws by the hold harmless amounts for the municipalities in that county. (2007‑323, s. 31.16.3(f); 2008‑134, s. 14(a).)
§ 105‑522. (Effective October 1, 2009) City hold harmless for repealed local taxes.
(a) Definitions. The following definitions apply in this section:
(1) Eligible municipality. A municipality that was incorporated on or before October 1, 2008, and receives a distribution of sales and use taxes under G.S. 105‑472.
(2) Hold harmless amount. The sum of the following amounts allocated for distribution to a municipality for a month:
a. The amount of sales and use tax revenue allocated under G.S. 105‑486. This calculation determines the effect of repealing a one‑half percent (1/2%) sales and use tax distributed on a per capita basis.
b. An amount determined by subtracting twenty‑five percent (25%) of the amount of sales and use tax revenue allocated under G.S. 105‑472 or Chapter 1096 of the 1967 Session Laws from fifty percent (50%) of the amount of sales and use tax revenue allocated under G.S. 105‑486. This calculation determines the effect of distributing a one‑quarter percent (.25%) tax on the basis of point of origin instead of on a per capita basis.
(b) Requirement. A county is required to hold the eligible municipalities in the county harmless from the repeal of the local sales and use taxes formerly imposed under this Article. The Secretary must add an eligible municipality's hold harmless amount to the amount distributed to the municipality under this Subchapter. To obtain the revenue for the hold harmless distribution, the Secretary must reduce each county's monthly allocation under G.S. 105‑472(b) or under Chapter 1096 of the 1967 Session Laws by the hold harmless amounts for the municipalities in that county. (2007‑323, ss. 31.16.3(f), 31.16.4(c); 2007‑345, s. 14.4(a); 2008‑134, ss. 14(a), 15(c), (f), (g).)
§ 105‑523. (Effective until October 1, 2009) County hold harmless for repealed local taxes.
(a) Intent. It is the intent of the General Assembly that each county benefit by at least five hundred thousand dollars ($500,000) annually from the exchange of a portion of the local sales and use taxes for the State's agreement to assume the responsibility for the non‑administrative costs of Medicaid.
(b) Definitions. The following definitions apply in this section:
(1) City hold harmless amount. The hold harmless amount determined under G.S. 105‑522 for the eligible municipalities in a county.
(2) Hold harmless threshold. The amount of a county's Medicaid service costs and Medicare Part D clawback payments assumed by the State under G.S. 108A‑54 for the fiscal year, less five hundred thousand dollars ($500,000).
(3) Repealed sales tax amount. Fifty percent (50%) of the amount of sales and use tax revenue allocated under G.S. 105‑486 for distribution to a county.
(c) Requirement. If a county's repealed sales tax amount plus its city hold harmless amount for a fiscal year exceeds the county's hold harmless threshold for that fiscal year, the State is required to hold the county harmless for the difference by paying the amount of the difference to the county. The Secretary must withhold from sales and use tax collections under Article 5 of this Chapter the amount needed to make the county hold harmless payments required by this section.
(d) Method. The Secretary must estimate a county's repealed sales tax amount, city hold harmless amount, and hold harmless threshold for a fiscal year to determine if the county is eligible for a hold harmless payment. The Secretary must send to an eligible county with the distribution made under G.S. 105‑472 for March of that year an amount equal to ninety percent (90%) of its estimated hold harmless payment. At the end of each fiscal year, the Secretary must determine each county's hold harmless payment for that year. The Secretary must send by August 15 the remainder of the county's hold harmless payment for the fiscal year that ended on June 30. The Secretary of the Department of Human Resources must give the Secretary of Revenue the data needed to determine a county's hold harmless threshold. (2007‑323, s. 31.16.3(f); 2008‑134, s. 15(a).)
§ 105‑523. (Effective October 1, 2009) County hold harmless for repealed local taxes.
(a) Intent. It is the intent of the General Assembly that each county benefit by at least five hundred thousand dollars ($500,000) annually from the exchange of a portion of the local sales and use taxes for the State's agreement to assume the responsibility for the non‑administrative costs of Medicaid.
(b) Definitions. The following definitions apply in this section:
(1) City hold harmless amount. The hold harmless amount determined under G.S. 105‑522 for the eligible municipalities in a county.
(2) Hold harmless threshold. The amount of a county's Medicaid service costs and Medicare Part D clawback payments assumed by the State under G.S. 108A‑54 for the fiscal year, less five hundred thousand dollars ($500,000).
(3) Repealed sales tax amount. The sum of the following amounts allocated for distribution to a county for a month:
a. The amount of sales and use tax revenue allocated under G.S. 105‑486. This calculation determines the effect of repealing a one‑half percent (1/2%) sales and use tax distributed on a per capita basis.
b. An amount determined by subtracting twenty‑five percent (25%) of the amount of sales and use tax revenue allocated under G.S. 105‑472 or Chapter 1096 of the 1967 Session Laws from fifty percent (50%) of the amount of sales and use tax revenue allocated under G.S. 105‑486. This calculation determines the effect of distributing a one‑quarter percent (.25%) tax on the basis of point of origin instead of on a per capita basis.
(c) Requirement. If a county's repealed sales tax amount plus its city hold harmless amount for a fiscal year exceeds the county's hold harmless threshold for that fiscal year, the State is required to hold the county harmless for the difference by paying the amount of the difference to the county. The Secretary must withhold from sales and use tax collections under Article 5 of this Chapter the amount needed to make the county hold harmless payments required by this section.
(d) Method. The Secretary must estimate a county's repealed sales tax amount, city hold harmless amount, and hold harmless threshold for a fiscal year to determine if the county is eligible for a hold harmless payment. The Secretary must send to an eligible county with the distribution made under G.S. 105‑472 for March of that year an amount equal to ninety percent (90%) of its estimated hold harmless payment. At the end of each fiscal year, the Secretary must determine each county's hold harmless payment for that year. The Secretary must send by August 15 the remainder of the county's hold harmless payment for the fiscal year that ended on June 30. The Secretary of the Department of Human Resources must give the Secretary of Revenue the data needed to determine a county's hold harmless threshold. (2007‑323, s. 31.16.4(d); 2007‑345, s. 14.4(b); 2008‑134, s. 15(a), (d), (f), (h).)
§§ 105‑524 through 105‑534: Reserved for future codification purposes.