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LGC UPDATE

LGC UPDATE. 2012 NCGFOA Summer Conference. Sharon Edmundson. 7/16/2012. ACCOUNTING IMPLICATIONS OF HB 1779. Two primary concerns Recording of revenue and cost of collections Tax collection percentage calculation for budgeting and reporting purposes. ACCOUNTING IMPLICATIONS OF HB 1779.

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LGC UPDATE

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  1. LGC UPDATE 2012 NCGFOA Summer Conference Sharon Edmundson 7/16/2012

  2. ACCOUNTING IMPLICATIONS OF HB 1779 • Two primary concerns • Recording of revenue and cost of collections • Tax collection percentage calculation for budgeting and reporting purposes

  3. ACCOUNTING IMPLICATIONS OF HB 1779 • Revenue and Cost of Collections • Revenue will be received from DOR in a manner similar to sales tax and other shared revenue monthly distributions net of cost of collections • Units will record revenue net of costs as a property tax revenue • No recording of costs by local units • No recording of a levy for motor vehicle taxes, no recording of a receivable of total levy at local level • Will accrue a receivable at fiscal year end similar to sales tax for the taxes that were paid to the State before year end but not yet distributed to local units

  4. ACCOUNTING IMPLICATIONS OF HB 1779 • G.S. 159-13(b) (6) states that “The estimated percentage of collection of property taxes shall not be greater than the percentage of the levy actually realized in cash as of June 30 during the preceding fiscal year. For purposes of the calculation under this subdivision only, the levy for the registered motor vehicle tax under Article 22A of Chapter 105 of the General Statutes shall be based on the nine‑month period ending March 31 of the preceding fiscal year, and the collections realized in cash with respect to this levy shall be based on the 12‑month period ending June 30 of the preceding fiscal year.”

  5. ACCOUNTING IMPLICATIONS OF HB 1779 • Will be asking General Assembly to revise this statute to remove the reference to the motor vehicle tax levy • Hopeful this can be done early in the session • Tax collection percentage will not include motor vehicle taxes • Unit has no control over the collection process • Tax collector in unit will not be charged with collecting motor vehicle tax

  6. Questions?

  7. Thank you! Together , we can build and maintain a fiscally strong and prosperous North Carolina. www.NCTreasurer.com sara.shippee@nctreasurer.com

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