Change in Dare County Sales and Use Tax Rate

Effective July 1, 2006, the additional 1% Dare County sales and use tax for beach nourishment is repealed. See Important Notice and Reminder – April 2006 for additional information.

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: