Orange County NC Website
Browse       Search
<br />CCM Economics, LLC Orange County Tax Equity Page 43 <br /> <br />Appendix B <br />Consider the hypothetical situation of Mr. Smith and Mr. Jones. Mr. Smith is renting and <br />living in a house owned by Mr. Jones. The house is located in Mebane so that Mr. Smith is <br />living in Mebane. However, Mr. Jones, the owner of the property, actually lives in Georgia and <br />receives the tax bill at his home address in Atlanta, Georgia. Mr. Jones pays the property tax bill <br />which is used by Orange County government to provide government services to Mr. Smith. Mr. <br />Smith, an Orange County resident, pays none of the property tax but receives the benefits of the <br />Orange County provided government services. Mr. Jones, a Georgia resident, pays all of the <br />Orange County property tax, but receives none of the Orange County provided government <br />services. In situations like this, Orange County is in effect, exporting its tax burden to Atlanta, <br />Georgia.24 <br />It is possible under special conditions that some of the property tax burden that Mr. Jones <br />faces can be shifted to Mr. Smith in the form of higher rent on the property so that in effect, Mr. <br />Smith is ‘paying’ part of the property tax via higher ‘rent’. Also, it is possible that Mr. Jones <br />will still receive some of the benefits of the Orange County government provided services even <br />if he doesn’t live in Orange County. This could occur through government provided benefits that <br />indirectly help Mr. Jones through lower homeowners insurance costs, increased property values, <br />etc. In effect, Orange County has now ‘exported’ some of the government provided benefits <br />derived from the property tax. Since there is no data on these special conditions, they are <br />ignored. For simplicity, it is assumed that Orange County is exporting its tax burden to any <br />property tax payer who doesn’t live in Orange County. Furthermore, it is assumed for this study <br />that any resident of a municipality within Orange County who owns property in another part of <br /> <br />24 The concept of tax exportation by local and state governments is well understood, but it can be difficult t o <br />quantify the exact amount of a tax that is truly exported. <br />80