Local Politics

Lawmakers want to repeal transfer tax

Posted May 15, 2008
Updated May 16, 2008

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— A year after state lawmakers told counties they could ask voters to approve a land-transfer tax to help pay the costs of growth, some of the idea's former supporters want to kill it.

The option would create a 0.4 percent tax on the sales price of real estate in any county where commissioners put it on the ballot and voters approved it.

However, it's been tried 20 times so far and has lost every time, overwhelmingly in most cases.

Lawmakers last year approved the transfer tax and a quarter-cent local sales tax as two options that cash-strapped counties could explore. The idea was to raise money for growth-related needs like schools and roads without raising property taxes.

The 0-for-20 streak has apparently made an impression on lawmakers, and some have introduced House Bill 2097 to repeal the transfer-tax option.

"It tells you that's not the sort of tax that we ought to be putting on people," Senate Minority Leader Phil Berger said of the way the transfer tax has been crushed at the polls.

The Rockingham County Republican opposed the tax option last year, and he said he would support a repeal.

Some of the sponsors of this year's bill voted for the tax option last year, and Berger and others charged that their change of heart is politically motivated, since they all face re-election in six months.

"Some people could say that folks are just trying to cover themselves in an election year," Berger said.

Sponsors said the repeal bill isn't pandering to voters and represents a legitimate concern about the potential impact of the tax if it were ever approved.

Rep. Pryor Gibson, D-Anson, said North Carolina's housing market is weaker now than a year ago, and he said lawmakers should debate the merit of the tax in the current environment.

The repeal faces a slim chance of passage because House leaders who approved the tax last year don't want to take the option away from counties so soon.

Rebecca Troutman, a lobbyist for the North Carolina Association of County Commissioners, said she thinks voters deserve a choice on whether to impose the tax.

"It takes a while to educate the citizens to let them understand what the money will be used for," Troutman said.

Without more revenue options, she said, counties will be forced to turn to property taxes to meet local funding needs.

"We think (the repeal effort is) unfortunate because the demands for our infrastructure are not going away," she said.

21 Comments

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  • TechRescue May 16, 2008

    Headline is wrong - should read "Realtors and Developers want to Repeal Land Use Tax"

    Guess that's too long....

  • OhYea May 16, 2008

    Tax his land,
    Tax his wage,
    Tax his bed in which he lays.
    Tax his tractor,
    Tax his mule,
    Teach him taxes is the rule.
    Tax his cow, Tax his goat, Tax his pants, Tax his coat. Tax his ties, Tax his shirts, Tax his work, Tax his dirt. Tax his tobacco, Tax his drink, Tax him if he tries to think. Tax his booze, Tax his beers, If he cries, Tax his tears. Tax his bills, Tax his gas, Tax his notes, Tax his cash. Tax him good and let him know That after taxes, he has no dough. If he hollers, Tax him more, Tax him til he’s good and sore. Tax his coffin, Tax his grave, Tax the sod in which he lays. Put these words upon his tomb, “Taxes drove me to my doom!” And when he’s gone, We won’t relax, We’ll still be after the inheritance TAX!!

  • whatelseisnew May 16, 2008

    For those in support of these taxes, please do the following. If you are receiving a Federal Stimulus check, please write a check for that amount and send it on in to your County Tax Collectors. Indicate on your check that you are donating it for infrastructure needs.

  • ThePunisher May 16, 2008

    Yank it.

  • Beachnut May 16, 2008

    I just wish our legistators would spend just half as much of their energy finding ways to reduce spending. If they did, we wouldn't constantly need to find new sources of revenue.

  • Mac1 May 16, 2008

    Its funny to me that the land-transfer tax is somehow not considered to be a property tax...never mind that its paid by property owners just like regular property taxes! And its not like it doesn't affect non-property owners either - those costs just get passed down to renters anyway, so its not like they're unaffected by this when compared to a sales tax increase. Orange County commissioners never stopped to think that Alamance County is already a really attractive alternative for people who don't want to spend all of their income on property taxes - this would have been just another reason to live further west (or south in Chatham) and drive through or past Orange County to work and shop in Durham and Raleigh!

  • lancer May 16, 2008

    This tax was supposedly to support infrastructure increases caused by the increase in the school population. The majority of the "increase" is not generated by existing property owners, but rather by the influx of more, uhm, transient populations. This new group does not, as a general rule, own property.
    Therefore the property owners would be supporting the non owners.
    This is being forced to pay for services that were not rendered. In the real, non-political world, you would sue someone for taking your money, but not providing the service.

    The tax for schools needs to be on those who use those services.

  • TechRescue May 16, 2008

    Leave it as an option. Sooner or later, the Realtors will tire of spending hundreds of thousands a year to hoodwink people into not voting for it, and it will pass.

    What the counties should do is make it black and white. "If we pass the land transfer tax, your property taxes will go down 10% next year. If we don't they go up 10%. Do the math"

  • koolady May 16, 2008

    The only option that needs to be considered by lawmakers at every level is to reign in spending. Socialism never works and the giveaway programs that are on the books are costing taxpayers billions. The more money the politicians have, the more they want.

  • WHEEL May 16, 2008

    The Democratic controlled Legislature never saw a tax they didn't like until the population started rebelling. Time to throw the whole bunch OUT.

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