Sales tax plan good for rural counties
Published August 16, 2015
Editorial by Rocky Mount Telegram, August 15, 2015.
A measure approved last week by the N.C. Senate that will provide more state sales tax revenue to smaller, more rural counties is certainly good news for the Twin Counties.
The plan is included in a Senate economic development bill that was separated two weeks ago from that chamber’s budget plan. The Senate distribution plan would allocate local sales taxes to counties and municipalities based more on population than the location of the sale.
The proposal has come under heavy criticism from leaders of larger urban and tourism-based counties, which stand to lose revenue under the plan, and Gov. Pat McCrory, who had promised to veto the state budget if the measure remained in it.
The measure is a compromise version of the original proposal that was included in the Senate budget, which called for 80 percent of sales tax revenue to be allocated based on population and 20 percent based on the sale location. The new version would split those allocations, with half staying in the county where the sale took place and half distributed based on population and would take effect in 2016. The compromise bill also doesn’t include any new sales taxes on services such as veterinary care, auto repairs and pet grooming that were included in the original proposal.
The legislature’s nonpartisan fiscal research staff estimates that about 80 counties would gain money and 20 counties would lose compared to revenue projections made under current law, which allocates 75 percent of sales tax revenue based on sale location and 25 percent based on population.
As staff writer Lindell John Kay reports in today’s edition of the Telegram, Nash County would receive a 9 percent increase in sales tax revenue and Edgecombe County would receive a 21 percent increase. Rocky Mount would be in line for an 8 percent increase from sales on its Nash County side and 20 percent from its Edgecombe County. Towns in Nash County also would receive an 8 percent increase and Edgecombe County towns would receive 20 percent more.
While the additional revenue will not provide a financial cure-all for the Twin Counties or other smaller, less affluent counties across the state, the shift in revenue from the wealthier, more prosperous urban counties – where many people from rural counties often travel to shop – to the state’s poorer ones certainly is a welcome step toward helping the rural areas of the state that continue to face difficult economic challenges.
While the change has its critics in the N.C. House and governor’s mansion, we urge House members to approve the measure and McCrory to sign it into law.
http://www.rockymounttelegram.com/opinion/our-views/sales-tax-plan-good-rural-counties-2955911
August 16, 2015 at 10:21 am
Richard L Bunce says:
A better plan would be to end all private business doing the governments dirty work as tax collector including sales tax and income tax withholding. Then have EVERYONE pay their use tax (for sales tax) and file estimated income taxes. Even better would be for each government taxing a resident to send them a bill each month. The support for smaller government would increase exponentially.
August 17, 2015 at 10:03 am
Frank Burns says:
It is not the responsibility of the urban counties to bolster the rural counties. The capital needs are located in the urban counties and therefore the taxes collected need to remain there. This is a dumb proposal.
August 17, 2015 at 2:55 pm
Richard L Bunce says:
Do you also agree that out of State businesses including online businesses should not collect sales taxes from NC residents and send them back to NC but collect the sales tax based on where there business is located and send the sales tax to the local/State government that imposed it?
August 21, 2015 at 8:14 am
Frank Burns says:
Yes I agree.
