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H.O.S.T. SUMMARY

Cherokee County where metro meets the mountains. H.O.S.T. SUMMARY. On the November 6, 2012 Ballot, Cherokee County voters will be asked to consider a HOST, an additional penny sales tax, which will be used to reduce property taxes. Cherokee County where metro meets the mountains. HIGHLIGHTS

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H.O.S.T. SUMMARY

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  1. Cherokee Countywhere metro meets the mountains H.O.S.T. SUMMARY On the November 6, 2012 Ballot, Cherokee County voters will be asked to consider a HOST, an additional penny sales tax, which will be used to reduce property taxes

  2. Cherokee Countywhere metro meets the mountains HIGHLIGHTS * 1 % SALES TAX FOR ELIMINATION OF COUNTY PORTION OF PROPERTY TAX ON CHEROKEE HOMEOWNERS * EVERY DOLLAR COLLECTED WILL RESULT IN A DOLLAR OF PROPERTY TAX RELIEF * ESTIMATED 20 % OF SALES TAX DOLLARS FROM NON-CHEROKEE RESIDENTS * AVERAGE TAX SAVINGS PER CHEROKEE HOUSEHOLD OF $ 100 PER YEAR = $350 PROPERTY TAX SAVINGS – COUNTY M & O = ($ 250) AVERAGE HOUSEHOLD SALES TAX INCREASE * NOVEMBER BALLOT “ SPECIAL ELECTION” SECTION: NOTICE TO ELECTORS “ => QUESTION 1 AND QUESTION 2 – BOTH MUST PASS HOMESTEAD OPTION SALES TAX (HOST)

  3. Cherokee Countywhere metro meets the mountains HOST – A LOCAL SALES TAX USED TO REDUCE PROPERTY TAXES • WHAT IS IT and WHAT DOES IT DO ? • Increase sales tax in Cherokee County from 6% to 7% ( only handful are at 6 % ) • Same categories of goods and services as current State and Local Sales Tax • 100 % of proceeds from the additional 1% used to reduce General M&O property taxes for homeowners in their primary residence up to 5 acres (per state law) – Cities and Unincorporated Cherokee County • Sales tax is paid by everyone making purchases in Cherokee County • Thus, reduces burden on property owners by spreading the cost of government services among all purchasers living in and visiting Cherokee County

  4. Cherokee Countywhere metro meets the mountains HOST – A LOCAL SALES TAX USED TO REDUCE PROPERTY TAXES • Current value of 1% sales tax is ~ $30 Million per year • New outlet center to open in mid-2013 will add more than $1 Million annually • Elimination of tax on auto sales will reduce total in future • Residents who rent do not pay property taxes • Seniors will have future reduction ( 100 % exclusion in 2016 ) from State income tax

  5. Cherokee Countywhere metro meets the mountains HOST – A LOCAL SALES TAX USED TO REDUCE PROPERTY TAXES • HOW WILL IT IMPACT THE AVERAGE HOMEOWNER? • The average home value is ~ $160k. Here is an actual example: • General M&O $ 332.72 • Fire Fund $ 210.84 • Parks Bond $ 48.45 • School $1,194.18 • State $ 15.03 • Total Tax $1,801.22 • HOST Credit ($ 332.72) • Final Bill $1,468.50 • If sales within the county continue at current levels, this portion will be eliminated from the homeowner’s tax bill • But that homeowner will still contribute (with all other buyers) through the sales tax

  6. Cherokee Countywhere metro meets the mountains HOST – A LOCAL SALES TAX USED TO REDUCE PROPERTY TAXES • IS THIS GIVING THE COUNTY GOVERNMENT MORE TAX DOLLARS? • No. It is dollar neutral for the government. • Instead of collecting ~ $35M from property taxes, it is estimated Cherokee County would collect: • $30M from sales taxes • $5M from property taxes • Still $35M in Total • The County does benefit from: • diversified revenue sources, and • cashflow improves since sales tax is received each month, rather than major property taxes receipts in December - January $35M $35M

  7. Cherokee Countywhere metro meets the mountains HOST – A LOCAL SALES TAX USED TO REDUCE PROPERTY TAXES Option1 : Continue with General M&O Taxes Only Paid By Property Owners $16.8M + $3.6M + 14.6M = $35.0 Million Total Option 2: Implement a HOST Tax to Spread Costs Among Everyone Benefitting from General County Services $0 M + $1M + $4M + $30M = $35.0 Million Primary Residences < 5 Acres * Other Residential Other Real Property & Businesses Purchasers Total * The HOST Credit will first be applied to Primary Residences up to 5 acres. If sales taxes are adequate – other properties will then benefit. Option 2 is based on current sales tax collections.

  8. Cherokee Countywhere metro meets the mountains HOST – A LOCAL SALES TAX USED TO REDUCE PROPERTY TAXES THE TWO HOST BALLOT QUESTIONS:” SPECIAL ELECTION” “NOTICE TO ELECTORS: Unless BOTH the homestead exemption AND the sales and use tax are approved, then neither the exemption nor the sales and use tax shall become effective. ( ) YES Shall a retail homestead option sales and use tax of 1 percent be levied within the special district within Cherokee County for the purposes of funding capital outlay projects and of funding services to ( ) NO replace revenue lost to an additional homestead exemption of up to 100 percent of the assessed value of homesteads from county taxes for county purposes ? ---------------------------------------------------------------------------------- ( ) YES Shall the Act be approved which provides a homestead exemption from Cherokee County ad valorem taxes for county purposes of up to 100 percent as determined from the proceeds generated from the collection of a retail homestead option sales and use tax for residents of Cherokee County?" ( ) NO Question 1 asks to approve/deny the addit’l 1 cent Question 2 asks to approve/deny the addit’l homestead exemption

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