Updated: Q&A on Local Sales Tax Distribution Plan

NEW: September 2016 N.C. Dept. of Revenue Webinar

Click here to view the webinar.

N.C. Dept. of Revenue staff review changes to the Sales & Use Tax Distribution Report format.

Click here to access the "Suggested Methodology for Calculating Statutory Art. 40 and 42 Set Asides for School Capital" Spreadsheet.

You may use this interactive spreadsheet to estimate county revenue under the 2015 local sales tax changes. Note that this workbook is a tool that allows you to apply your own projections of revenue growth rates and sales tax base expansion in the green cells in the bottom left corner.

Please also note that the purpose of this tool is to help counties craft budgets for the upcoming fiscal year based on their own county-specific estimates. The numbers on the spreadsheet may differ from previous projections due to updated sales tax figures. Also, the spreadsheet does not include population adjustments in future years. Keep reading for additional Q&A about the 2015 local sales tax changes.

2015 Local Sales Tax Changes Interactive Spreadsheet


A provision in the recently enacted 2015-17 budget bill, Session Law 2015-241, establishes a new local sales tax distribution plan for some local governments. The plan requires the Department of Revenue to distribute $84.8 million (plus growth in the out years) to local governments based on percentage allocations listed in the legislation (see the chart below).


County  Allocation % County Allocation % County Allocation %
Alamance  0.00% Forsyth 0.00% Orange        0.33%
Alexander 1.69% Franklin 2.44% Pamlico       0.40%
Alleghany  0.31% Gaston  1.96% Pasquotank 0.02%
Anson 0.96% Gates   0.68% Pender      1.69%
Ashe 0.62% Graham 0.31% Perquimans   0.50%
Avery 0.00% Granville   1.87% Person        0.74%
Beaufort 0.17% Greene        1.20% Pitt         0.16%
Bertie 0.94% Guilford     0.00% Polk           0.74%
Bladen 1.03% Halifax 0.76% Randolph   4.27%
Brunswick 0.00% Harnett        5.17% Richmond    0.54%
Buncombe 0.00% Haywood       0.05% Robeson    3.00%
Burke  2.19% Henderson 0.68% Rockingham   2.18%
Cabarrus 0.00% Hertford     0.47% Rowan           3.90%
Caldwell  1.72% Hoke   2.58% Rutherford   1.63%
Camden 0.48% Hyde  0.03% Sampson    2.10%
Carteret  0.00% Iredell 0.00% Scotland 0.83%
Caswell   1.35% Jackson   0.00% Stanly            1.04%
Catawba 0.00% Johnston 3.26% Stokes 1.99%
Chatham 1.58% Jones 0.63% Surry   0.00%
Cherokee 0.24% Lee 0.37% Swain   0.32%
Chowan 0.26% Lenoir  1.56% Transylvania 0.16%
Clay 0.32% Lincoln         1.74% Tyrrell           0.15%
Cleveland   1.43% Macon       0.00% Union            4.35%
Columbus  2.63% Madison    1.03% Vance          0.36%
Craven 1.01% Martin  0.31% Wake 0.00%
Cumberland 0.06% McDowell   0.68% Warren 1.01%
Currituck 0.00% Mecklenburg 0.00% Washington 0.33%
Dare 0.00% Mitchell 0.29% Watauga 0.00%
Davidson  4.96% Montgomery 1.05% Wayne 2.27%
Davie       1.14% Moore   0.00% Wilkes      1.55%
Duplin   1.97% Nash      1.16% Wilson       0.39%
Durham 0.00% New Hanover 0.00% Yadkin 1.31%
Edgecombe 1.86% Northampton 0.94% Yancey     0.52%
    Onslow 1.10%    

Here is a link to the distribution estimates calculated by the legislative Fiscal Research Division. 

The $84.8 million is collected from the counties according to the overall sales tax distribution of Articles 39, 40, and 42. The state also appropriates $17.6, which is distributed to all 100 counties [note this appropriation was repealed by S.L. 2016-94]. There is no way to specifically track how much revenue each county generates under the new sales tax base expansion.

Use of Funds

1.       Does the money have to be spent on particular things?

Yes, it does. The additional funds received under the formula have to be spent on public education, economic development, and community colleges.

2.       Will there be a formula telling us how to divide our use of these funds between the three categories?

No, there is no required distribution between the categories. The General Assembly wanted to communicate that they place high priority on these items, but did not want to set a standard formula for all counties. It is up to the local governments to determine how that money is used, as long as it is used for the three allowed investments.

3.       Can “education” include debt service for schools?

At this point, there are no specific definitions of education, so yes. But please use good judgment when determining how to use the funds.

4.       Is there a “no supplant” requirement?

No, there is not a “no supplant” requirement in the legislation. Again, use good judgment.


1.       How did the General Assembly come up with the county distribution percentages?

The specifics are covered under legislative confidentiality and have not been shared with the public or the General Assembly at large. Rep. David Lewis explained on the House floor that the percentages were chosen to assist approximately the same counties that would have seen a revenue increase from a 50/50 distribution plan.

2.       Why do the individual county percentages total to slightly more than 100% and how will that be handled?

The county percentages total to 100.02%. This is because the data used for the policy discussion were rounded to the nearest thousand. It is anticipated that the error will be corrected in one of the remaining bills of the session or early in the next legislative session. 

redistribution; sales tax; local sales tax; sales tax redistribution