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4,004 at <br /> FINANCE DEPARTMENT ,y <br /> ORANGE COUNTY <br /> GORDON R. BAKER <br /> DIRECTOR <br /> MEMORANDUM <br /> To: Acting County Manager <br /> From: Finance Director <br /> Subject: New Sales Tax Law <br /> Date: September 30, 1987 <br /> The new sales tax law changes the definition of the "point of sale". The previous <br /> law referred to a sales and use tax. Under the old law, a consumer in one County <br /> that ordered merchandise from a vendor in another County only paid the 3% State <br /> sales tax with the purchase. The consumer was required to voluntarily report this <br /> transaction to the Department of Revenue and pay the local "use" tax to the State <br /> for the benefit of the County in which the goods were actually to be used. Needless <br /> to say, most consumers did not report and pay this tax. (This happens when an- <br /> individual makes a purchase by mail order from a vendor in a County other than the <br /> County in which that individual resides.) The new law will require the vendor to <br /> collect the local option tax at the point of sale for the County in which that <br /> vendor is located. <br /> The new law contains a formula designed to factor a County's collection up or down <br /> so that every County will realize a 2 to 2.2% increase in sales tax collections <br /> beginning with the quarterly distribution received in August, 1988. This formula <br /> will benefit Orange County. Otherwise, this law would have had a negative impact for ... <br /> us. <br /> Also, a committee will study the benefits of consolidating the local option sales <br /> into a single State sales tax levy. If consolidation occurs, local governments <br /> would receive a share of the State excise tax on liquor (approx. $9.5 mil) . <br /> 106 EAST MARGARET LANE • HILLSBOROUGH, NORTH CAROLINA 27278 • 919/732-8181 <br />