The 2004 session of the General Assembly enacted legislation that provides
Dare County with authority to levy an additional 1% local sales and use
tax for beach nourishment. In accordance with the provisions of the legislation,
the Dare County Board of Commissioners adopted a resolution levying the
additional 1% sales and use tax effective January 1, 2006.
Effective January 1, 2006, the total local rate of tax in
Dare County will increase from 2½% to 3½%, resulting in a combined
State and local rate of 8%. The additional 1% county tax will apply only
to sales of tangible personal property and other transactions that are subject
to the State 4½% rate of sales or use tax. Sales of food that are
subject to the 2% county rate of tax are not subject to the additional
1% Dare County tax or to State sales or use tax.
The legislation provides that the additional 1% county sales and use
tax does not apply to construction materials purchased to fulfill a lump-sum
or unit-price contract entered into or awarded before the effective date
of the levy or entered into or awarded pursuant to a bid made before the
effective date of the levy. Form E-589C, Affidavit to Exempt Contractors
from the Additional 1% Dare County Sales and Use Tax, or other sufficient
documentation is to be used by contractors or subcontractors who are engaged
in performing contracts exempt from the additional tax.
The sales and use tax returns for the period October 2005 through September
2006 contain a “1% Additional County Rate” line which will
be used for reporting and remitting the additional Dare County sales and
use tax starting with returns for periods beginning January 1, 2006. Supplies
of these returns are distributed annually to monthly filers during the
month of October and to quarterly filers during the month of December.
Taxpayers who are liable for remitting tax for more than one county should
file Form E‑536, Schedule of County Sales and Use Taxes. A line has
been added for reporting the Dare County Additional 1% Tax. An 8% tax chart
is available below.
The following resources provide additional information on the tax increase: