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ORANGE COUNTY <br />BOARD OF COMMISSIONERS <br />ACTION AGENDA ITEM ABSTRACT <br />Meeting Date: April 23, 2013 <br />Action Agenda <br />Item No. 7 -d <br />SUBJECT: Sales Tax Distribution Method for Fiscal Year 2013/2014 <br />DEPARTMENT: Financial Services PUBLIC HEARING: (Y /N) No <br />ATTACHMENT(S): <br />Attachment 1. Property Tax Levies for <br />2012 -2013 (Preliminary <br />Orange County Levies) <br />Attachment 2. Orange County Sales Tax <br />Distribution Options 2012- <br />2013 <br />Attachment 3. Property Tax Rate Impact <br />by Local Government of <br />Change in Sales Tax <br />Distribution <br />INFORMATION CONTACT: <br />Clarence Grier, (919) 245 -2453 <br />PURPOSE: To review Sales Tax Distribution Options and to consider options for the Orange <br />County distribution of local option sales tax for fiscal year 2013/2014. <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 <br />allows 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 21 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 2012 -2013 Property Tax <br />Levies by taxing unit of local government 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. <br />