Cumberland County commissioners will consider a resolution Monday that would change the county’s sales tax distribution method, according to a March 26 memorandum from County Attorney Rick Moorefield.
The county previously participated in an interlocal sales tax agreement with the governing bodies of other municipalities in Cumberland County, the proposed resolution states. That agreement began in 2003 and will end June 30, 2025. Under the agreement, the county used the “per capita” method of sales tax distribution, meaning municipalities did not have to give back a portion of their sales tax proceeds to the county, according to the UNC School of Government.
Now, the county is considering switching to the “ad valorem” method.
The per capita method looks at population, allocating revenues based on each municipality’s population compared to the county’s population. In comparison, the ad valorem method allocates revenue based on each municipality’s property tax rate compared to the county’s property tax rate, according to Orange County.
State law requires that, if counties wish to change from one method to another, they pass a resolution in April, two fiscal years before the switch would take effect.
The county gave notice to local municipalities in June that it planned to change to the ad valorem method, according to a news release.
The change would take effect July 1, 2025, the memorandum states.
In other business:
The board will meet Monday at 9 a.m. at the Cumberland County courthouse.
Reporter Lexi Solomon can be reached at lsolomon@cityviewnc.com or 910-423-6500.
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