Albemarle ¼ cent tax for street improvements hits roadblock

(Jeff Mayes/The News-Dispatch via AP)

ALBEMARLE — A local bill filed in Raleigh by Rep. Wayne Sasser (R-Stanly) and Rep. Ken Goodman (D-Stanly) is unlikely to proceed, after the Legislative Analysis Division of the North Carolina General Assembly staff determined it was not legally feasible.  

The opinion, provided to Stanly County Journal by Rep. Sasser, says, “no municipality in North Carolina currently has the authority to levy a sales and use tax.” This creates a problem of precedent for a city like Albemarle seeking to levy such a tax. 

In 2018, House Bill 947 was filed to allow the Town of Morrisville to hold a referendum authorizing them to “levy a ¼% sales and use tax for street improvement,” nearly an identical initiative as House Bill 68 filed this year by Sasser and Goodman. The cities of Mt. Airy and Hendersonville were later included in this bill as well. Although HB 947 passed the House State and Local Government II Committee, it stalled in House Finance and wasn’t ultimately approved.  

The Retail Merchants Association sent an email to Rep. Sasser outlining why they believe the new bill, like the one in 2018, is not legally viable. Sasser sent this on to the Legislative Analysis Division for an opinion, and they responded that, “Many of their [Retail Merchants Association] points come from a summary the Legislative Analysis Division prepared for House Bill 947, introduced in the 2018 Session of the General Assembly.”  

The opinion also outlined a couple “administrative issues” that would complicate implementing a city-level sales tax. One is that North Carolina is a “full member of the Streamlined Sales and Use Tax Agreement.” This agreement mandates that if there are multiple sales taxes in a zip code, the state must apply the lowest of them. Applying this at a municipal level, when there may be multiple municipalities in a single zip code, “could cause confusion for sellers when trying to determine the applicable sales and use tax rate.”  

Their second administrative concern is that similar confusion could occur when properties are annexed and de-annexed from municipalities. 

Rep. Sasser told SCJ that without this bill, it’s unclear how Albemarle could address its concerns about poor road conditions, which he says are the “No. 1 complaint with constituents” in the city. 

“There are not many other options, other than raising people’s property taxes,” said Sasser. “And that’s something nobody wants to do.”  

Sasser said, despite this likely setback, they will continue conversation with local officials to find other sources of funding for street improvements.  

CORRECTION: In last week’s issue, we incorrectly conflated the ¼ cent sales tax proposal for Albemarle street improvements and the ¼ cent sales tax passed by referendum for Stanly County school safety funding.