Commissioners approve new half-cent sales tax, effective Dec. 1

The Alleghany County Board of Commissioners Monday approved instituting a new one-half cent sales tax, effective on Dec. 1 of this year.

Commissioners have noted that the tax is necessary because the state has withheld county funds from tax reimbursements, costing Alleghany more than a quarter million dollars overall. The new tax will only bring in an estimated $190,000 to $200,000 in revenues.

The sales tax increase, which raises the county's sales tax rate to seven cents on the dollar, is not in addition to a half-cent approved earlier this year. That tax, which would have taken effect on July 1 of 2003, was replaced by the tax passed on Monday. In other words, the tax increase that was approved is in lieu of that half-cent hike.

Even though the rate is going to go up to seven cents in December, if the state does not act, an unrelated statewide half-cent sales tax is scheduled to sunset in mid 2003 — meaning that the tax rate could return to 6.5 cents at that time.

In explaining the history of the sales tax, County Manager Don Adams said that under a deal made with counties in years past, the state was to have continued giving counties tax reimbursements through July 1, 2003 and then give the counties access to a half-cent sales tax. The state was planning to use the tax to pay the reimbursements through that date. However, the state reneged on the deal and kept the half-cent tax and all of the reimbursements, instead forcing counties to raise taxes yet again to replace revenue taken by the state.

Get the rest of this article in this week's issue of the Alleghany News! Back