Sales Tax State Activity Update - January 2004

North Carolina Implements One-Half Cent Sales Tax

The North Carolina General Assembly has enacted legislation authorizing all counties to levy an additional one-half cent local option sales and use tax beginning on December 1, 2002. To date 89 counties out of North Carolina 100 counties have adopted the new local option sales tax.

The additional ½% county sales and use tax does not apply to construction materials purchased to fulfill a lump-sum or unit-price contract entered into or awarded before the effective date of the levy or entered into or awarded pursuant to a bid made before the effective date of the levy. The new local rate will apply only to sales of tangible personal property and other transactions that are subject to the State 4½% rate of sales or use tax. Sales of food that are subject to the 2% county rate of tax are not subject to the additional ½% tax or to State sales or use tax.

The following 78 counties have adopted resolutions to levy the additional ½% local sales and use tax effective December 1, 2002: Alamance, Cumberland, Jackson, Rowan, Alexander, Dare, Jones, Sampson, Alleghany, Davidson, Lenoir, Scotland, Anson, Davie, Lincoln, Stokes, Ashe, Duplin, Martin, Surry, Avery, Durham, McDowell, Transylvania, Beaufort, Edgecombe, Mitchell, Tyrrell, Bertie, Forsyth, Montgomery, Union, Bladen, Gaston, Nash, Vance, Brunswick, Gates, Northampton, Wake, Buncombe, Graham, Orange, Warren, Burke, Granville, Pasquotank, Washington, Caldwell, Greene, Pender, Watauga, Camden, Halifax, Perquimans, Wayne, Carteret, Harnett, Person, Wilkes, Catawba, Haywood, Pitt, Wilson, Chatham, Hertford, Polk, Yadkin, Chowan, Hoke, Randolph, Yancey, Cleveland, Hyde, Richmond, Columbus, Iredell, Robeson.

The following 11 counties have adopted resolutions to levy the additional ½% local sales and use tax effective January 1, 2003: Cherokee, Franklin, Madison, Rutherford, Craven, Guilford, Mecklenburg, Swain, Currituck, Lee, Onslow.

The full text can be found at: http://www.dor.state.nc.us/taxes/sales/countyrate.html (Department of Revenue, NC Hot Topics, Increase in County Sales and Use Tax Rate) 01/03

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