Agenda - 12-13-2005-9d - Laserfiche WebLink

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~~'~+R"s"~~, State of North Carolina ~,~ ~~~~~ ~,.y~;;,•• Department of State Treasurer ttIDnnan tt. naooRS SC¢te ¢rtid Local Government P'iia¢nce Division 'rt2cnsuRCa wad the Local Gouerrrment Conromission November 28, 2005 TO: County and School Board Officials and Certified Public Accountants FROM: T. Vance Hollomatr, Director Fiscal Management Section SUBJECT: Sales Tax Refunds and Motor Vehicle Property Taxes Sales Tax Refunds 3 During the 2005 legislative session, the General Assembly tools action to amend G.S. 164.4{c) to delete local school administrative units (LhAs) from those governmental entities eligible to receive a sales tax refund. This change is effective dui°ing the current fiscal year, so L1;As may claim a refund of sales taxes paid during the fiscal year ended June 30, 2005,. However, as G.S. 164 4(c) is currently written, L);As can not claim a refund for subsequent years. Action was also taken to require the Department of Revenue to deposit to the State Public School Pund each quarter an amount equal to the one-fourth of the prior year refund of sales taxes paid to LhAs 1ffective July 1, 200G, that amount will be equal to the refunds paid for the 2005 fiscal year adjusted by increases or decreases in State sales tax collections. These funds will be distributed to L1JAs on the basis of average daily membership. We are aware of speculation that G.S. 1644(c) may be amended to permit L);As to claim refunds for local sales taxes paid. If this change does occur we will inform local officials. The LGC issued Memorandum No, 859 on October 16, 1997 which addresses the circumstances under which sales taxes paid for the construction of school facilities, as well as for the purchase of tangible property, by a county for a L);A are eligible for a refund of sales tax under G. S 105-164.14(c), At the time that Memorandum was issued L1/As were not among the governmental units that could claim a sales tax refund.. Memorandum No. 859 stated that render the provisions of G S. 115C-521 and 522 LJ;As are responsible for the construction of school facilities and the purchase of supplies and materials. The fact that a county might issue a check in payment to a vendor° for the construction of school Facilities or the purchase of tangible property for the L);A does not result in the county assuming responsibility for those tasks. Two provisions of the General Statutes make it possible for a county to assume this responsibility for a local board of education. The fixst is the authorization under G, S 153A-158.1 for counties to acquire property for use by a Li•;A. The second way in which a county can assume this responsibility for a LRA is through an inter-local cooperation agreement between the