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NORTH C::AROLINA A!E~SOCIATION OF COUNTY P. O. BOX 1488 · RALEIGH, NORTH CAROLINA 27602 · TELEPHONE 919/832-2893 Bulletin #27 Thursday,-July-2Lj..1983 ONE-HALF PERCENT LOCAL OPTION SALES TAX IS ENACTED INTO LAW H 426, ~e"lf2%l~dp'tion s~lee ~a~'~ill, was enacted in~o law today. The law is effective. As noted last week, the House and Senate passed different versions of H 426, and a special Conference Committee was appointed to resolve the differences in the two approaches. Co-chaired by Rep. Dwight Quinn (Cabarrus) and Senator Marshall Ranch (Gaston), the .Conference Committee met late Monday night and~ about 12:25 a.m, Tuesday morning hammered ou~ a compromise bill. The compromise was spelled out in a conference report which was reported back to each chamber on Tuesday (for first reading), and was then passed in each house on separate readings on Wednesday and Thursday. The final vote for H 426 in the House was 72 to 18; in the Senate the vote was 33 to 10, House members of the Conference Committee were: Quinn, Bowen, Hunter~ L~ks, Murphy, Rabon, and Watkins. Senate conferees were: Ranch, Duncan, Elton Edwards. Hunt~ Jenkins, Staton, and Warren. The Association appreciates the.willingness of the coafere~s~to work out a compromise measure. ' ' MAJOR FEATURES OF H 426 The major features of the legislation as enacted are as follows: Local Option: Each of the 100 6~%t'ie's is Authoriz~~ 6o ~nAht':th~ 1/2% ~Al~an~ use..tax either by dicect,!imp0s£fi~R~6~ the ~ following an'affirmative ~vdte in'~'dO~n~y-wid~r~ferendu~ c~lle~ county commissioners. Legal pro~edgres to be fdllowed by a county in enacting the tax are generally the same procedures set out in the present 1% local option sales tax law (G.S. 105-465 and 105-466 contained in Article 39 of G.So Chapter 105). ,~ollection; Collection of the tax,will'be made by the State Department 6f R~venua. !Di§'lributioh'6f the net proceeds of'the tax will-b~ made:to the taxing counties and municipalities on a qua~lyTbasis. !'Pe~LCapita'"Distribdtlo~'To County Areas: The net revenue generated by the I/2% sales and use tax will be distributed to the taxing counties on a~per-capita basis according to the most recent annual population estimates as certified by t~aState Budget Off$cer, For example, if 50 counties have enacted the tax, if the total population of the 50 counties is .2,000,000 people, and if county Y has a population of 50,000'people, then county Y will receive 2½%.(50,000 ~- by 2,000,000) of the distributable proceeds. The per-capita approach is used to distribute only the new I/2% sales and use tax revenue to each participating county.area. The already existing I% local sales tax is not affected by the new ~egislation and continues to be distributed on a point of collection basis. - Over -