HomeMy WebLinkAboutAgenda - 03-11-1998 - 8ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: March 11, 1997
SUBJECT: Reimbursement of Sales Taxes Paid for School Construction
Action Agenda
Item No. ~
DEPARTMENT: Finance
PUBLIC HEARING: (Y/N) No
BUDGET AMENDMENT: (Y/N) No
ATTACHMENT(S): INFORMATION CONTACT:
Local Government Commission Memorandum Ken Chavious Ext. 2453
NCGS 153A-158.1
TELEPHONE NUMBERS:
Hillsborough 732-8181
Chapel Hill 968-4501
Durham 688-7331
Mebane 227-2031
PURPOSE: To discuss the potential for the County to claim sales tax refunds on School
Construction Projects.
BACKGROUND: The Local Government Commission (LGC) issued a memorandum to Counties
and Local Boards of Education in October 1997 covering issues related to the State School bond
and sales taxes. According to the memorandum, the Attorney General has issued an opinion that
Counties can claim refunds of sales taxes on school projects if certain conditions are in place. One
of the major conditions is that the County have statutory authorization to acquire and own property
for use by a School Administrative Unit (NCGS 153A-158.1). Orange County received this
authorization in 1994.
The County has received sales tax refunds on the McDougle Elementary School Project. The total
amount of refunds requested for this project was $190,119. Of these request the amount actually
approved by the Department of Revenue was $173,336. The County has been audited by the
Department of Revenue on two occasions with the auditor's focus mainly on the McDougle
construction project. These audits resulted in the differences between the amounts requested and
actual receipts. It is important to note that the County's sales tax refunds for school projects
occurred prior to the issuance of the Attorney General's opinion. The Department of Revenue
initially questioned the County's ability to request the refund on school construction. After
reviewing the documents establishing the relationships between the County and the School Board
the and property ownership, the auditors concurred that the refund request was indeed appropriate.
Approximately $126,000 of these sales tax refunds have been used in the McDougle project budget
to assist in some of the one time start up costs.
County staff will outline the highlights of the reimbursement provisions laid out by the LGC, and
respond to questions the Boards may have.
RECOMMENDATION(S): The Manager recommends that the Boards receive the reports and
provide appropriate direction to the respective staffs regarding sales tax reimbursements for school
construction.