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ORANGE COUNTY <br />BOARD OF COMMISSIONERS <br />ACTION AGENDA ITEM ABSTRACT <br />Meeting Date: October 21, 2014 <br />Action Agenda <br />Item No. 6 -i <br />SUBJECT: Interlocal Agreement for the Reimbursement of Expenditures <br />DEPARTMENT: County Attorney PUBLIC HEARING: (Y /N) No <br />ATTACHMENT(S): <br />INFORMATION CONTACT: <br />John Roberts, 919 - 245 -2318 <br />PURPOSE: To authorize the Chair to execute an agreement with the Towns of Carrboro, <br />Hillsborough, Chapel Hill and various Online Travel Companies ( "OTCs ") for the collection and <br />remittance of certain occupancy taxes. <br />BACKGROUND: Approximately seven years ago various counties in North Carolina initiated <br />litigation over the failure of some OTCs to collect occupancy taxes when those OTCs reserved <br />rooms on behalf of travellers. In 2013 the legislature passed legislation (SL 2010 -31 Section <br />31.6) intended to require OTCs to collect and remit occupancy taxes. The OTCs alleged the <br />legislation was unconstitutional and ultimately prevailed on the litigation in the North Carolina <br />Appellate Courts. Even though they prevailed in the litigation the OTCs agreed to collect the <br />occupancy taxes going forward. Orange County was not a party to the litigation, but the OTCs <br />are requesting Orange County and the Towns agree to forgo litigation over any occupancy taxes <br />the OTCs allegedly failed to collect in the past and to allow them to collect occupancy taxes and <br />remit them going forward beginning January 1, 2015. <br />The Agreement is not attached and the OTCs are not named because the Agreement is <br />confidential tax information pursuant to North Carolina General Statute 105- 259(a)(2). The <br />Agreement will be provided separately to the Board of County Commissioners. <br />FINANCIAL IMPACT: There is no cost associated with approval of the Interlocal Agreement. <br />Revenues will increase due to these occupancy taxes being collected and remitted for the first <br />time. However, at this time there is no estimate how much of an increase there will be. <br />RECOMMENDATION(S): The Attorney recommends that the Board authorize the Chair to <br />execute the Interlocal Agreement. <br />