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ORANGE COUNTY <br />BOARD OF COMMISSIONERS <br />ACTION AGENDA ITEM ABSTRACT <br />Meeting Date: June 15, 2010 <br />Action Agenda <br />Item No. 7 - C <br />SUBJECT: Resolution Calling for a November 2, 2010 Special Advisory Referendum <br />Concerning the Levy of a One - Quarter Cent (1/4¢) County Sales and Use Tax <br />DEPARTMENT: Manager & Financial Services PUBLIC HEARING: (Y /N) No <br />ATTACHMENT(S): INFORMATION CONTACT: <br />Resolution Calling a November 2, 2010 Frank Clifton, County Manager, 245 -2300 <br />Special Advisory Referendum Clarence Grier, Financial Services <br />Concerning the Levy of a One- Director, 245 -2453 <br />Quarter Cent (1/4¢) County Sales Michael Talbert, Financial Services, 245 - <br />and Use Tax 2153 <br />North Carolina General Statute — Article <br />46 One - Quarter Cent (1/4¢) County <br />Sales and Use Tax <br />PURPOSE: To consider a Resolution Calling for a November 2, 2010 Special Advisory <br />Referendum Concerning the Levy of a One - Quarter Cent (1/4¢) County Sales and Use Tax. <br />BACKGROUND: Local governments in North Carolina have historically relied heavily upon ad <br />valorem property taxes as their major source of revenue. For a number of years, the Orange <br />County Board of County Commissioners, the North Carolina Association of County <br />Commissioners and many other local governing boards across the state lobbied the North <br />Carolina General Assembly for legislative authority to expand counties' revenue options, <br />thereby lessening counties' reliance on property taxes. <br />During the 2007 legislative session, the North Carolina General Assembly granted county <br />boards of commissioners the authority to levy, subject to voter approval, an additional one - <br />quarter cent (1/4¢) county sales and use tax referred to as the Article 46 sales and use tax. As <br />authorized by the General Assembly, the Article 46 sales tax cannot apply to consumer food <br />purchases. There is also no legislative requirement, or mechanism, for counties to share the <br />additional one - quarter cent sales tax with municipalities. <br />On May 4, 2010 voters in Duplin, New Hanover and Onslow counties approved the additional <br />one quarter cent (1/4¢) county sales and use tax. This brings the total to 15 out of 100 counties <br />that have approved the Article 46 one quarter cent (1/4¢) county sales and use tax. <br />The Manager suggested as part of the FY2010 -11 budget process that the Board of <br />Commissioners consider scheduling a November 2, 2010 Special Advisory Referendum <br />Concerning the Levy of a One - Quarter Cent (1/4¢) County Sales and Use Tax. Although not <br />required by the North Carolina General Statutes or any other provisions, the Board held a public <br />hearing on a potential referendum and sales and use tax at the Board's June 1, 2010 regular <br />