Orange County NC Website
Browse       Search
o Regressive <br /> o Based on ability to pay <br /> - Property Tax <br /> o More progressive <br /> o Not based on ability to pay <br /> - Land Transfer <br /> o More progressive <br /> o Based on ability to pay <br /> Ease of Collection <br /> - Sales tax is collection run by the state <br /> - Land transfer will likely be collected in the same way the deed stamp tax is <br /> collected <br /> Commissioner Gordon arrived at 6:40 p.m. <br /> 4. BOCC Questions/Dialogue with Presenters <br /> 5. BOCC Discussion of Revenue Options and Next Steps <br /> Chair Jacobs made reference to the comments about the sales tax and how it is not as <br /> regressive, and said that this is not what he has heard at this presentation. He asked for <br /> clarity on this. Roland Stephen said that the reforms contemplated by the Legislative Study <br /> Commission would address some of the regressive issues. There are people working on a <br /> radical broadening of the sales tax base, and a radical lowering of the sales tax rate. To the <br /> extent that this can be done, it will be fairer and it will keep up with the economy as it grows. <br /> This is the dream of sales tax reform at the State level. <br /> Chair Jacobs asked about the comments about the impact of sales tax on the wealthy <br /> and Roland Stephen gave an example that most older people tend to buy services, which are <br /> not taxed, rather than items. <br /> Mark Peters asked about the sales tax leakage due to internet commerce. Roland <br /> Stephen said that it is estimated to be $600 million for North Carolina. It is growing more on <br /> the side of business transactions as opposed to retail transactions. There is an effort to <br /> remedy this by the Streamlined Sales Tax Agreement, which is an agreement among states. <br /> Frank Thomas asked clarifying questions about the housing market, which were <br /> answered by Karl Smith. <br /> Ben Lloyd asked if the transfer tax would apply if the property was willed and Karl <br /> Smith said that he believes that it would not apply. His understanding is that it would apply <br /> only if there is a monetary transaction. <br /> Ben Lloyd asked about non-profits and Karl Smith said that there are lawyers at the <br /> School of Government that would know about this. <br /> David Brower asked why a land transfer tax was not simply a sales tax on real property. <br /> Roland Stephen said that essentially it is a sales tax, but it is set at a very low level. <br /> David Brower asked if there could be tax increment financing, where the tax is paid out <br /> of the incremental increase in the value. Karl Smith said that the County would not have the <br /> power to make that decision. <br /> Discussion ensued on keeping the property tax low and using an alternative revenue <br /> option. <br />