Survey of Anticipated Pay Changes
NEW! FY 2024-25 survey results are available. In April 2024, NCACC and the North Carolina League of Municipalities (NCLM) released the results of our annual joint survey of local governments about their planned salary changes for the upcoming fiscal year. The full survey results break the findings down by population size group and region. Statewide, of the local governments that responded:
- 87% plan to provide a cost-of-living adjustment (COLA) and/or a merit increase for the upcoming budget year.
- 29% plan to provide a COLA in the FY 2024-25 budget, with the statewide average COLA being 3.6%.
- 44% have either recently made market adjustments to their pay plans or will be conducting or implementing the results of pay and classification studies in the upcoming year.
NCACC thanks all local governments who responded to the survey. We appreciate your time in helping make this the most useful and timely report possible for you and your peers. We also thank NCLM for its extensive work in preparing the report.
- NCACC thanks the 235 local governments that responded to the 2024-25 survey, including 39 counties.
Budget and Tax Survey
NEW! FY 2023-24 survey results are available. In April 2024, NCACC released the results of our annual Budget and Tax Survey, which we conduct annually to gather financial information on county budgeted expenditures and tax resources, including in-depth information on school appropriations. Please note that these are self-reported data, and do not reflect audited expenditures, revenues, or other county information.
Property Taxes
Coming soon.
Sales Taxes
Sales taxes are the second largest revenue source for North Carolina counties, making up approximately 14% of county General Fund revenue. Counties set their own sales tax rates with voter approval, but the state collects and redistributes local sales tax dollars. NCACC staff are available to guide counties on sales tax referenda, revenue projections, and other sales tax issues.
- Sales Tax Articles and Rates
North Carolina has a 4.75% state sales tax rate. In addition, counties are authorized by North Carolina General Statute Chapter 105, Articles 39-46 to levy up to 5 sales taxes, with rates that range from 0.25% to 1%.
Article Rate Distribution Restrictions Shared with Towns Counties Levying Notes Article 39 1% (1¢) Point of Sale N/A Yes 100 Counties Article 39, 40, and 42 together are commonly referred to as "The First 2¢" Article 40 0.5% (1/2¢) Per Capita Counties must use 30% on school capita. Yes 100 Counties Article 39, 40, and 42 together are commonly referred to as "The First 2¢" Article 42 0.5% (1/2¢) Point of Sale Counties must use 60% on school capita. Yes 100 Counties Article 39, 40, and 42 together are commonly referred to as "The First 2¢" Article 43 0.25% (1/4¢) or 0.5% (1/2¢) Point of Sale 100% to transit. Yes, if a city runs a transit system. 4 Counties Rate is 0.5% for Durham, Forsyth, Guilford, Mecklenburg, Orange, and Wake Counties (0.25% in all other counties). Article 46 0.25% (1/4¢) Point of Sale N/A No 46 Counties All 100 counties levy the first 3 sales taxes, usually called “the First 2¢.” In addition, nearly 50 counties levy at least one of the two additional taxes:
Tax Rate Counties (As of January 1, 2023) 6.75%
4.75% State; 2.00% First 2¢Alamance, Alleghany, Avery, Beaufort, Bladen, Brunswick, Burke, Caldwell, Camden, Carteret, Caswell, Chowan, Cleveland, Columbus, Craven, Currituck, Dare, Davie, Franklin, Gates, Granville, Guilford, Henderson, Hoke, Hyde, Iredell, Johnston, Lenoir, Macon, McDowell, Mitchell, Nash, Northampton, Pamlico, Pender, Perquimans, Person, Polk, Richmond, Scotland, Stokes, Transylvania, Tyrrell, Union, Vance, Warren, Washington, Watauga, Wayne, Wilson, Yadkin, Yancey 7.00%
4.75% State; 2.00% First 2¢; 0.25% Article 46Alexander, Anson, Ashe, Bertie, Buncombe, Cabarrus, Catawba, Chatham, Cherokee, Clay, Cumberland, Davidson, Duplin, Edgecombe, Forsyth, Gaston, Graham, Greene, Halifax, Harnett, Haywood, Hertford, Jackson, Jones, Lee, Lincoln, Madison, Martin, Montgomery, Moore, New Hanover, Onslow, Pasquotank, Pitt, Randolph, Robeson, Rockingham, Rowan, Rutherford, Sampson, Stanly, Surry, Swain, Wilkes 7.25%
4.75% State; 2.00% First 2¢; 0.50% Article 43Mecklenburg, Wake 7.50%
4.75% State; 2.00% First 2¢; 0.50% Article 43; 0.25% Article 46Durham, Orange
- Sales Tax Referenda
Local Sales Tax Referenda
To levy either the Article 43 Transit Sales Tax or the Article 46 Optional Quarter Cent Sales Tax, a county Board of Commissioners must receive voter permission by holding a referendum. NCACC is available to guide counties on the referendum process. In addition, the section below provides an FAQ on the local option sales tax, a sample Board of Commissioners resolution, and historical referenda results from across the state.
- Frequently Asked Questions
- Model Resolution (PDF)
- Sample Educational Materials (PDF)
- Medicaid Hold Harmless Payments
In 2007, the North Carolina General Assembly enacted S.L. 2007-323, which granted “Medicaid relief” to counties, ended county authority to levy the Article 44 sales tax, and created Medicaid hold harmless payments. NCACC has compiled several resources to help counties understand these payments
- Understanding Medicaid Hold Harmless Payments (presentation)
- School of Government Local Finance Bulletin
- Department of Revenue Medicaid Hold Harmless data (scroll way down)
Occupancy Taxes
Most counties levy an occupancy tax on rental accommodations, such as hotel rooms and vacation rentals. Although the General Statutes broadly outline occupancy tax guidelines (G.S. 153A-155), they do not authorize the tax. Instead, each county must first receive explicit taxing authority from the General Assembly. Occupancy tax collections are remitted to the local government; usually, the authorizing legislation requires the county to establish a Tourism Development Authority (TDA) to manage and allocate most or all of the tax proceeds.
- Sample Occupancy Tax Resolutions
In counties that have received authority from the General Assembly to levy or modify an occupancy tax, the Board of Commissioners must first pass an authorizing resolution and hold a public hearing. NCACC has compiled these sample resolutions from three counties as examples.
Contact Information
For more information about NCACC’s budget, tax, and finance information or for help, please contact Fiscal and Policy Research Director Denise Canada at (919) 715-0045.