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2010 LOCAL OPTION SALES AND USE TAX - FAST FACTS

Related Documents:
Sales Tax Fact Sheet.pdf
Letter from Parent of Monte Sano student

General

  • Authorized in 2007 by the North Carolina General Assembly as part of reform legislation.
  • Local option requires the approval of voters for counties to enact.
  • Tax is ¼ of one cent (or ¼ %).  This means an additional 25-cents on every $100 taxable purchase.
  • Not everything is taxed.  The following items are NOT taxed:
    • Non-prepared foods
    • Gas and Diesel
    • Vehicle Purchases
    • Prescription Medications
    • Farm seed
    • Services
    • Other items which are not currently taxed.

Passage History

  • The Onslow County sales tax failed twice in 2008.
  • In 2008, the county did not designate the use of potential revenues from the tax.

Important Factors to Consider

  • Counties in North Carolina have historically held control over only one revenue source:  Property Taxes.
  • Onslow County is unique in that 40% of Onslow's land mass is not taxable due to the location of federal property and the state's Hofmann Forest.
  • Of the remaining taxable property, around 74% is residential.  This poses a real challenge for the county as many houses do not generate enough property tax to pay for the services consumed by the people that live there.
  • For example:  the average sale price of a home in Onslow County is around $168,000.  That house generates $994 per year in property taxes.  At the same time, however, Onslow County spent around $1,350 per year for every child enrolled in Onslow County Schools.
  • Onslow's school system grows an average of 350 students every single year.  That is a new school every 3 years.
  • In North Carolina counties, not cities, are responsible for funding schools.  Schools are only one of the many services that are being stretched by our growing population.  Among others are fire and rescue services and law enforcement.
  • High birth rates, coupled with military and other growth has already made us the 11th largest county out of the 100 in our state.  And we are still one of the fastest growing counties today.
  • The growing population coupled with the possibility of continued state budget cuts and unfunded state mandates make it extremely important to spread the cost of local government to all citizens, rather than just a few.
  • Sales taxes are paid by everyone that buys things in the county, not just property owners.

Changes for 2010

  • Commissioners have specifically designated that the sales tax will now be used for three purposes.
  • New sales tax revenues will allow the County to roll-back property taxes 2 cents, with 1 cent rolling back in 10-11 and the second cent rolling back in 11-12.  This means over $2 Million going to property tax relief when sales tax revenues reach 100% of collections.
  • In year 1, sales tax collections will be at 50% since implementation takes 6 months.  Therefore, it is not possible to roll back 2 cents in year one.  The property tax rollback amount would be more than the total estimated sales tax collections in this first year.
  • Year 2 of collections will provide a full 12 months of revenue.  Therefore, the second cent will be rolled back.
  • Of the remaining funds, 50% will be used for public safety (such as fire, paramedics, and law enforcement).  This equates to approximately $1 Million per year.
  • The other 50% will be used to fund public education.  This equates to approximately $1 Million per year.

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