A measure that would have gutted local governments’ abilities to collect and use sales tax money has apparently been rewritten to allow local governments to retain that power, though it still unfairly shifts some of that revenue away from localities that collect the tax.
The original bill, Senate Bill 369 — which someone with a rather wry sense of irony dubbed the Sales Tax Fairness Act, was co-sponsored by State Sen. Shirley Randleman of Wilkesboro —who represents Surry County at the General Assembly — and was touted as a way to more fairly distribute sales tax revenue throughout the state.
According to bill supporters in the state senate, it would have shifted how sales tax revenue is distributed throughout North Carolina. At present, sales tax money largely remains in the locality in which it is collected. If you buy something in Mount Airy, then Mount Airy gets that sales tax revenue, even if you live in Winston-Salem. Under the new plan, at least according to its supporters, it would distribute that money based on state population, rather than location of the sale.
Those supporting the bill claimed most localities in the state would benefit, while a few of the larger metropolitan areas that serve as shopping destination points might suffer.
Upon closer examination, Senate Bill 369 did nothing of the sort. What the bill did do was wrest the sales tax away from local governments, making it a purely state tax, with a promise from the state legislators that they would distribute that money across the state according to county population figures.
This was another blatant power grab by the General Assembly — which has been meddling in strictly local affairs throughout North Carolina since the GOP came to power in 2010 — only this time it would have hurt nearly every locality in the state. Municipal governments would have lost this revenue entirely because it would be distributed to county governments. And those very county governments would never really know if the money was coming — North Carolina has a long history of raiding certain dedicated funding streams (lottery and roads among them) in order to balance the general fund budget.
As one can imagine, local governments across the state were almost universally against this move, including our own county and municipal governments here in Surry County.
The bill has been rewritten to leave the revenue stream as a local sales tax that can be collected by county and states, which largely restores the sales tax to what it was before the proposal. One item that still remains is that of distribution — the proposal calls for the distribution of this tax money to be reconfigured so that it eventually is allocated according to a formula based 80 percent on local populations and 20 percent on point of sale.
While the bill is much more palatable than in its original form, this is still unfair. If certain communities across the state have evolved into commercial or tourist centers that attract larger numbers of people, they are paying for that daily and weekly influx of visitors. Infrastructure, law enforcement, EMS work are just a few of the additional costs put on these localities.
It seems only fair sales tax money — all sales tax money — should remain in the communities where the sales are made.