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ORANGE COUNTY <br />BOARD OF COMMISSIONERS <br />ACTION AGENDA ITEM ABSTRACT <br />Meeting Date: April 3, 2001 <br />Action Agenda <br />Item No. ~- o~ <br />SUBJECT: Amendment to Ordinance Implementing a Gross Receipts Tax on Rental <br />Vehicles Exem t from Pro ert Tax <br />DEPARTMENT: Revenue/Attorney PUBLIC HEARING: (Y/N) No <br />ATTACHMENT(S): <br />Amended Ordinance <br />6/6/00 Original Adopted Resolution <br />Draft Interlocal Agreement <br />INFORMATION CONTACT: <br />Geof Gledhill, ~T32-2196 <br />Jo Roberson, ext 2725 <br />TELEPHONE NUMBERS: <br />Hillsborough 732-8181 <br />Chapel Hill 968-4501 <br />Durham 688-7331 <br />Mebane 336-227-2031 <br />PURPOSE: To consider amending an ordinance adopted by the Board on June 6, 2000 that <br />implemented a gross receipts tax on certain rental vehicles to replace the ad valorem tax on <br />such vehicles that was rescinded by the North Carolina General Assembly during its 2000 <br />legislative session. <br />BACKGROUND: The County Attorney has rewritten an ordinance that incorporates technical <br />corrections, definitions, and an appeal mechanism into the gross receipts tax ordinance that the <br />Board approved on June 6, 2000. On May 17, 2000 Governor Hunt signed legislation (Senate <br />Bill 1076) enacted by the General Assembly that substituted a gross receipts tax for property <br />taxes on leased or rented motor vehicles. The law authorizes counties to levy a gross receipts <br />tax of up to 1'/2 % on short-term leases or rentals, and repeals the property tax on vehicles <br />subject to such lease or rental. Municipalities have been granted authority to levy the same <br />amount of tax, in addition to any levied by counties. The law provides that permission to levy <br />the gross receipts tax takes effect on July 1, 2000. <br />As a result of the short timeframe between the bill's approval and the date when the Board <br />needed to implement the ordinance, the County relied on the North Carolina Association of <br />County Commissioners' model resolution as the basis for its action to implement the ordinance. <br />Since that time, it has been noted that several provisions of the ordinance needed correction or <br />amplification. For example, the original ordinance provided for the imposition of a penalty of <br />$10 per day for willful failure to file required reports and/or to pay the required taxes. The <br />amended ordinance incorporates the statutory provision that the penalty shall be 10% of the tax <br />due. <br />Another provision of the amended ordinance would permit the Tax Collector, for good cause <br />shown, to hear appeals from taxpayers and to compromise or forgive any portion of the tax. A <br />