LOCAL GOVERNMENT DISTRIBUTIONS UNDERSTANDING THE MONEY

Agenda Website Overview of Smaller Distributions Utilities Sales Distribution Overview of Sales Tax Distribution Specifics New Laws Proposed Legislation

Website www.dornc.com Local Government Link from Main Page Redesign Coming Soon Local Government Link from Main Page One-Stop Shop Property Tax Distribution Unit Schedule of Distributions Documentation of Distributions Made Information Unit

Smaller Distributions Quarterly Distributions Based on Populations Distributed 1 & ½ months after the end of the quarter Scrap Tire Counties Only White Goods If Eligible per DENR Solid Waste Counties and Cities

Other Distributions Alcoholic Beverage Tax Distribution Excise Tax Not Sales Tax Eligibility based on: Is it Legal to Sell Alcohol in your City/County? Distributed based on Per Capita % Distributed Once a year in May Medicaid Hold Harmless Hold Harmless from the repeal of Article 44 (1/2 % Sales Tax) Counties only Cities have the City Hold Harmless component of Sales Tax Distributed in two installments 90% estimation in March, 10% in August Can result in overpayments, that must be paid back in August

Utilities Sales Distribution Excise Tax on Piped Natural Gas – Repealed 6/30/2014 Franchise Tax on Electricity – Repealed 6/30/2014 Utility Franchise Distribution  Utilities Sales Distribution Four main components Sales Tax on Electricity Sales Tax on Piped Natural Gas Sales Tax on Telecommunications Sales Tax on Video Programming Cable, Satellite, Telecommunications PEG Channel Funding Distributed Quarterly Distributed 2 & ½ months after the quarter ends

Utilities Sales Distribution Distribution of Sales Tax on Video Programming & Distribution of Sales Tax on Telecommunication Calculated by using a combination of historical data and population data Distribution of Sales Tax on Electricity & Distribution of Sales Tax on Piped Natural Gas Calculated by using a combination of historical data and ad valorem data No longer based on location of service Historical Data (FY 2013 - 2014) is now 3 years old and should be out of statute PEG Channel Funding $4 Million per year divided up amongst all the channels $1 Million per quarter

Sales Tax Current Articles Article 39 = 1% Article 40 = ½% Article 43 = ½% Transit Tax Article 46 = ¼% County Tax Repealed Articles Article 44 & 45 Food Tax: 2% Articles 39, 40, & 42 All counties levy the basic two percent local tax. That is comprised of Articles 39, 40, & 42. Durham Mecklenburg, and Orange Counties currently levy the half percent Article 43 transit tax. 29 counties levy the extra quarter percent article 46 tax (Soon to be 31 with Jackson and Cherokee). Article 45 was for Dare county only (beach nourishment) and was repealed in 2006. Article 44 was an additional one half percent for the counties, but it was repealed in 2009. Amounts continue to populate the reports as old returns and requests for refunds are filed.

Sales Tax Allocations Articles 39, 42, 43, & 46 Point of Collection Per Capita Then Multiplied by Legislative Factors Food Article 39 Uses Historical Percentages Articles 40 & 42 Use Current Population Percentages

Distributing between the County and Cities Each County gets to choose its method of Distribution Ad Valorem Per Capita We use these percentages to distributed the allocations between the County and the Cities Except for Articles 43 and 46 which stay with the county.

City Hold Harmless The City Hold Harmless was designed to hold the cities harmless from the repeal of Article 44. Calculated using Article 39 and Article 40 amounts. The counties are required to pay the cities these amounts. These amounts also figure into the medicaid hold harmless for the counties. Confused Yet? Article 44 was distributed using an allocation that was half point of sale, and half per capita. So in order to calculate the city hold harmless, we use article 39 which is point of sale, and article 40 which is per capita.

Recent S&U Expansion 2014 Prepaid meal plans - Universities Admission Charges – Ticket Sales Service Contracts 2016 RMI: Repair, Maintenance, and Installation Charges Began 3/1/2016, March Sales, April Collections New Distribution Rules Took Effect for July 2016 Collections, June 2016 Sales Effect of the 2014 Law changes was that certain counties benefited more than others. The legislature changed the Distribution Laws for 2016 to try and help the counties that did not benefit so much from the prior law changes.

G.S. 105-524 (b) Subtract $84.8 million from all counties From Articles 39, 40, & 42 Taken Proportionately based on point of sale (c) Add the $84.8 million back to the counties Added to Article 44 Added Based on Legislative Percentages 79 Counties have a defined percentage. 21 Counties get zero. (e) Add in 17.6 million from the state portion REPEALED in the short session Since all counties lose a portion of the 84.8 million and gain a portion of the 17.6 million, they all lose 67.2 million. But they also all gain from the expansion of sales tax. The legislative percentages range from 0.02% for Pasquotank County up to 5.17% for Harnett County. When they made the law during the 2015 long session, they included a 17.6 million pool of money to go back to the counties. They repealed section (e) of this law during the short session as a provision of the budget.

G.S. 105-524 These funds are distributed between the county and cities using the same Ad Valorem % or Per Capita % used for other articles. Counties must use these funds for specific economic or education purposes In Subsequent years The 84.8 million used in part (b) and (c) may change according to yearly sales tax growth/shrinkage. In 16-17, we had 7.34% growth. So the 17-18 amount has grown to $91,022,308.00. Economic development, public education, or community colleges

Report: Article Overview Show a copy of possible Reports

Report: Article Overview

Summary Report These are the amounts that you are actually receiving. These amounts may be used for your accounting purposes.

Contact Us D. Ernest Irving (919) 814-1118 Deane.Irving@ncdor.gov Cindy Matthews, Distribution Unit Supervisor Information Unit & Property Tax (919) 814-1129 Localgovt_informationunit@ncdor.gov George Hermane, Manager Information Unit Tina Stone, Manager Personal Property Tax Doug Huffman, Manager Real Property Tax Mike Connolly, Manager Public Utilities New Director of Local Government Division: Tony Simpson