Yadkin commissioners have voted to send a sales tax increase to referendum, according to County Manager Aaron Church.
In a 5-0 vote Sept. 3 the board approved a one-quarter percent sales tax increase proposal, according to Commissioners’ Chairman Kevin Austin.
The tax would be in addition to the current 2-percent sales tax the county receives.
Austin said the tax would make it an even 7 cents sales tax in Yadkin County.
“I think Elkin and Wilkes both have that already, so if you think about it, our citizens … if they’re crossing the border they’re already paying that tax in other counties. And of course people coming here are not paying it,” Austin said.
The tax, if approved in the Nov. 5 referendum, would not be levied on unprepared food like groceries, nor on medicine or gasoline like the current 2-percent tax is.
Austin said he thinks the tax excludes unprepared food like groceries but does tax prepared food. Restaurants and fast food locations would be affected.
According to an agenda abstract provided by Church, the sales tax revenue would not be shared among cities in the county – the county would retain the entire amount generated from the quarter percent increase.
For instance, customers at the Subway in East Bend or the Arby’s in Jonesville would pay the tax, which would be sent back to the county instead of the town it was purchased in.
The increase in taxes amounts to roughly $400,000, according to Austin.
The vote came after a Aug. 13 vote of 9-3 by the Yadkin Republican Party’s executive committee in favor of supporting the commissioners if they decided to vote for a referendum.
Republican Party Chairman Bodie Wingler told Republicans in that meeting that the tax would help those who don’t own property pay their fair share - and might help lower property taxes in the county.
Austin said, “We would probably want this increased sales tax to accompany a reduction in property tax, so we would probably – at least I would support, and I think the rest of the board kind of feels this way too – but we would … implement when and if we could have a property tax reduction.”
When asked if the tax would be implemented only if property taxes were reduced, Austin said, “That’s my personal feeling and I’m pretty sure the rest of the board, I think I’m speaking for the entire board when I say that.”
Commissioners Frank Zachary, Marion Welborn and David Moxley told the Yadkin Republican Party in an Aug. 13 meeting that they could not promise the reduction, but Bodie Wingler highlighted the board’s previous tax reductions as a sign that the commissioners would work toward the property tax goal.
Austin said the board of commissioners have previously reduced the overall budget by a sizable amount.
“I think the overall budget was cut probably $2.5 million, something like that,” Austin said. “And the property tax rate has been cut, it used to be 74 cents and now it’s 67.9 … over two different cuts.”
Several Yadkin residents have asked The Ripple why there was no public hearing prior to the vote.
The item was not listed on the main agenda but was included in the consent agenda, which was also approved by the board by a vote of 5-0.
“Although we are not required to hold a public hearing, the public can certainly address the board during the public comments portion of our meeting,” Austin said.
Austin said General Statute 105-537 on levying sales taxes does require a 10-day public notice prior to the vote to levy, provided that the question passed the referendum.
The vote will be held on Election Day this November, with the actual tax being levied beginning in April, 2014. if the referendum passes.
Austin said the referendum would be the only item on the ballot for many residents, with only town elections for mayor and town commissioner up for vote in Yadkinville, East Bend, Jonesville and Boonville.
The changes in voter laws in North Carolina prevent issues from being raised except on primaries or general election days, Austin said. The changes require the referendum to take place either in November or May, with the vote likely coming on Election Day this November – Nov. 5 this year from 6:30 a.m. until 7:30 p.m.
The referendum will cost the county approximately $12,000 to open and man the polling places in the other precincts in the county, according to Austin.
He said the money would be worth it if the tax code could be updated and the expected $400,000 could be saved by taxpayers a year sooner.
“If we can save them $400,000 on property tax a year sooner it’s definitely worth that additional expense of holding it this year versus next May or next November,” Austin said.
If the referendum is approved the commissioners must give the N.C. Department of Revenue 90 days advance notice before levying the tax. Austin said the tax must begin being levied on the beginning of a fiscal year quarter.
For instance, if the referendum passes in November the county could begin collecting in April, 2014, and begin distributions in July.
If the referendum fails the commissioners can bring the proposal up again, with “no limitation on the number of attempts,” according to the abstract agenda Church provided.
There is also no “cooling period” between the referendum’s first attempt and any subsequent votes, meaning the commissioners can call for an additional vote immediately if the measure fails.
The county may initiate an education campaign to tell voters the purpose of the tax, as was done in a similar campaign for a general obligation bond the abstract agenda said.
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