Repealing county powers
Bill would stymie

tax authority
By Scott Nicholson
nicholson@wataugademocrat.com

With a land-transfer tax proving unpopular with voters, the General Assembly may be removing it as a revenue option for local governments.

House Bill 2097, which passed shortly after the primary election last month, would repeal county authority to enact the land-transfer tax, which is added to the cost of a land or home purchase and is also known as a “deed tax.”

The tax has been opposed by Realtor groups and those who say it will add to the cost of homes. Rep. Cullie Tarleton (D-Watauga) said the repeal proposal was fueled by a state Realtor’s association and is unlikely to become law.

Last year, the General Assembly granted counties the authority to levy either a quarter-cent sales tax or a land transfer tax of up to 0.4 percent.

The new bill was referred to the Committee on Rules, Calendar, and Operations of the House. A similar Senate bill is in the Finance Committee.

Clay County and Polk County have already scheduled referendums on the land-transfer tax this year.

Eight counties have approved a local sales-tax option, though referendums have failed this year in 18 other counties. Cumberland and Haywood counties gained voter approval May 6 to levy an additional quarter-cent sales tax.

An option to approve an 0.4-percent land transfer tax failed in referendums in four other counties this year, including Ashe, during the primaries. Voters in a total of 21 counties have already shot down the option, with Ashe County coming the closest to adopting it, getting 45 percent of the vote.

Opponents of the transfer tax have focused on direct-mail campaigns that characterize the transfer tax as a “home tax,” even though it applies to all property sales.

According to projections of the North Carolina Association of County Commissioners, a land-transfer tax would generate $3.06 million in Watauga County while a quarter-cent local sales tax would generate an additional $1.8 million.

Under the General Assembly’s legislation last year, county commissioners would have to put either or both measures before voters as a referendum before they could be adopted.

Tarleton said the N.C. Association of Realtors “would very much like to see that taken away from county commissioners,” he said, though he doubts there would be enough votes for the repeal to pass. “Frankly, I’d be surprised if it finds its way out of committee.

“The argument by the board of Realtors is that has been on the ballot in a number of counties and hasn’t passed,” he said. “To me, it’s sort of like basic democracy. It’s putting the decision in the hands of the people and letting the people decide. So far, they don’t want it.”

The four main sponsors of the bill all have personal interest in land transfers. Three Democrats are builders or developers while the Republican is a farmer. Fifteen of the bill’s 18 cosponsors are Republican.