Are there separate State and County distribution methodologies?

Yes. There are two distinct sales tax distributions; a) State-wide and b) County-wide.

The state collects local sales taxes (Articles 39, 40 and 42) and distributes them to counties using two different formulas. Articles 39 and 42, which account for 1.5%, are distributed on a point of delivery basis. The point of delivery benefits counties with strong commercial bases. The remaining .5% from Article 40 is distributed on a per capita basis. The per capita basis methodology pools the .5% of Article 40 State-wide tax proceeds and allocates based on the relative population of each county.

Counties then distribute sales taxes to municipalities using one of two methods; either on a per capita basis or ad valorem basis. The Orange County Board has approved a distribution based on a per capita basis but can choose to change its distribution method each April. The per capita basis allocates revenues based on municipalities' population relative to the County-wide population. The ad valorem basis allocates based on municipalities' property tax rate relative to the County-wide total property tax rate.

The Article 43 (transit tax) is not shared with other local governments and is instead managed by GoTriangle on behalf of Orange County. The Article 46 quarter-cent tax is, by agreement from the BOCC, split between Economic Development initiatives and the public school systems in the county. It is also not shared directly with other local governments.

Show All Answers

1. What is the total Orange County Sales Tax rate?
2. Is Food Exempt from Sales Tax?
3. Are there separate State and County distribution methodologies?
4. Are remote sellers required to collect sales and use tax on sales made via the Internet?
5. Who is considered a remote seller?
6. When making a sale, does the merchant collect tax for the state that you are located in or the state where the customer is located?
7. How do merchants determine where the sale occurred?
8. Is this a new tax?
9. What is Nexus in North Carolina?