§ 105-522. City hold harmless for repealed local taxes. - North Carolina Statutes

§ 105‑522.  City holdharmless for repealed local taxes.

(a)        Definitions. – Thefollowing definitions apply in this section:

(1)        Eligiblemunicipality. – A municipality that was incorporated on or before October 1,2008, and receives a distribution of sales and use taxes under G.S. 105‑472.

(2)        Hold harmlessamount. – The sum of the following amounts allocated for distribution to amunicipality for a month:

a.         The amount of salesand use tax revenue allocated under G.S. 105‑486. This calculationdetermines the effect of repealing a one‑half percent (1/2%) sales anduse tax distributed on a per capita basis.

b.         An amount determinedby subtracting twenty‑five percent (25%) of the amount of sales and usetax revenue allocated under G.S. 105‑472 or Chapter 1096 of the 1967Session Laws from fifty percent (50%) of the amount of sales and use taxrevenue allocated under G.S. 105‑486. This calculation determines theeffect of distributing a one‑quarter percent (.25%) tax on the basis ofpoint of origin instead of on a per capita basis.

(b)        Requirement. – Acounty is required to hold the eligible municipalities in the county harmlessfrom the repeal of the local sales and use taxes formerly imposed under thisArticle. The Secretary must add an eligible municipality's hold harmless amountto the amount distributed to the municipality under this Subchapter. To obtainthe revenue for the hold harmless distribution, the Secretary must reduce eachcounty's monthly allocation under G.S. 105‑472(b) or under Chapter 1096of the 1967 Session Laws by the hold harmless amounts for the municipalities inthat county.  (2007‑323,ss. 31.16.3(f), 31.16.4(c); 2007‑345, s. 14.4(a); 2008‑134, ss.14(a), 15(c), (f), (g).)