(a) Definitions. - The following definitions apply in this section:
(1) Local government. - A county or municipality that received a distribution of local sales taxes in the most recent fiscal year for which a local sales tax share has been calculated.
(2) Local sales tax share. - A local government's percentage share of the two-cent (2) sales taxes distributed during the most recent fiscal year for which data are available.
(3) Repealed reimbursement amount. - The total amount a local government would have been entitled to receive during the 2002-2003 fiscal year under G.S. 105-164.44C, 105-275.1, 105-275.2, 105-277.001, and 105-277.1A, if the Governor had not withheld any distributions under those sections.
(3a) Replacement revenue. - The sum of the following:
a. Fifty percent (50%) of the amount of sales and use tax revenue distributed under Article 40 of this Chapter, other than revenue from the sale of food that is subject to local tax but is exempt from State tax under G.S. 105-164.13B.
b. Twenty-five percent (25%) of the amount of sales and use tax revenue distributed under Article 39 of this Chapter or under Chapter 1096 of the 1967 Session Laws, other than revenue from the sale of food that is subject to local tax but is exempt from State tax under G.S. 105-164.13B.
(4) Two-cent (2) sales taxes. - The first one-cent (1) sales and use tax authorized in Article 39 of this Chapter and in Chapter 1096 of the 1967 Session Laws, the first one-half cent (1/2) local sales and use tax authorized in Article 40 of this Chapter, and the second one-half cent (1/2) local sales and use tax authorized in Article 42 of this Chapter.
(b) Distributions. - On or before September 15, 2013, the Secretary must multiply each local government's local sales tax share by the estimated amount of replacement revenue that all local governments are expected to receive during the current fiscal year. If the resulting amount is less than one hundred percent (100%) of the local government's repealed reimbursement amount, the Secretary must pay the local government fifty percent (50%) of the difference, but not less than fifty dollars ($50.00).
On or before August 15, 2013, the Department of Revenue and the Fiscal Research Division of the General Assembly must each submit to the Secretary and to the General Assembly a final projection of the estimated amount of replacement revenue that all local governments would be expected to receive during the upcoming fiscal year. If, after May 1 and before a distribution is made, a law is enacted that would affect the projection, an updated projection must be submitted as soon as practicable. If the Secretary does not use the lower of the two final projections to make the calculation required by this subsection, the Secretary must report the reasons for this decision to the Joint Legislative Commission on Governmental Operations within 60 days after receiving the projections.
(c) Source of Funds. - The Secretary must draw the funds distributed under this section from sales and use tax collections under Article 5 of this Chapter.
(d) Reports. - The Secretary must report to the Revenue Laws Study Committee by January 31, 2014, the amount distributed under this section for the current fiscal year. (2001-424, s. 34.14(a); 2003-284, s. 37.1; 2003-349, s. 6; 2004-124, s. 6.3; 2007-323, s. 31.16.3(c); 2013-360, s. 6.17.)
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Last modified: March 23, 2014