Orange County NC Website
Browse       Search
ORANGE COUNTY <br /> BOARD OF COMMISSIONERS <br /> ACTION AGENDA ITEM ABSTRACT <br /> Meeting Date: April 0, 2010 <br /> Action Agenda <br /> Item No. 7—a <br /> SUBJECT: Sales Tax Distribution Method for Fiscal Year 2010-2011 <br /> DEPARTMENT: Financial Services PUBLIC HEARING: (YIN) No <br /> ATTACHMENTS): INFORMATION CONTACT: <br /> Attachment 1. Property Tax Levies for Clarence Grier, (919) 245-2453 <br /> 201 0-2011 (Preliminary Michael Talbert (919) 245-2153 <br /> Orange County Levies) <br /> Attachment 2. Orange County Sales Tax <br /> Distribution Options 2009- <br /> 2410 <br /> Attachment 3. Property Tax Rate Impact <br /> by Local Government of <br /> Change in Sales Tax <br /> Distribution <br /> PURPOSE: To review Sales Tax Distribution Options and to confirm that the Orange County <br /> distribution of local option sales tax will remain based on Population for Fiscal Year 201 0-2011. <br /> BACKGROUND: The Board of County Commissioners was first granted the option of a 1 cent <br /> Local Government Sales and Use tax by the General Assembly in 1971. Article 39, which allows <br /> the County to levy the tax, also spells out two different options for the County to select for <br /> distribution of the funds between the County and municipalities. This distribution option not only <br /> applies to the original 1 cent sales and use tax, but to all local government sales and use tax <br /> ,levied in Orange County. <br /> The first option is to distribute the sales tax collected based on population. The formula takes <br /> the County's population and adds all individual municipal populations. The percent of each <br /> individual municipalities population divided by that grand total is used to allocate the sales tax <br /> revenue. This method has been used by Orange County for at least the last 20 years. <br /> The second option is to distribute the sales tax collected based on the Ad Valorem Property Tax <br /> Levied by each taxing unit of local government. Attachment 1 lists the 2009-2010 Property Tax <br /> Levies by taxing unit of local government and is furnished by the North Carolina Department of <br /> Revenue. Orange County is the taxing unit of local government for not only Orange County, but <br /> for all special tax districts located in Orange County. Attachment 2 provides an estimate of sales <br /> tax revenues distributed within Orange County by municipality. Under option one, only the <br />