NC bill would change reallocation meal taxes in Wake County
RALEIGH, N.C. (WTVD) -- A proposed bill could have some implications for major projects in Raleigh.
House Bill 1215 was introduced in the legislature this week, and it could change how the prepared food and beverage tax is allocated in Wake County.
Those tax dollars help to pay for regional projects and expansion projects such as the Raleigh Convention Center complex.
But the people behind the bill say the current structure doesn't benefit smaller communities.
The lawmaker behind the bill says that right now, revenue generated from the prepared food and beverage tax is used most in downtown Raleigh
But they want to see more of those dollars invested back in the community where some of the money was generated.
Here is how the tax works:
Everybody who goes out to dinner or drinks anywhere in Wake County pays a 1% prepared food and beverage tax on their bill.
That tax goes into what is referred to as a hospitality tax pot.
Through a nearly 30-year-old state law, that tax goes to the county, and through an interlocal agreement between Raleigh and Wake County, the decisions of how to spend that tax have been made primarily between those municipalities
But House Bill 1215 would change that and instead give municipalities back half of what was generated.
Rep. Erin Pare is one of the sponsors of the bill. She says it's not fair to the people who are living in these towns and paying this tax to have every single dollar go to a community other than the one they live in.
"Fuquay-Varina and Holly Springs both roughly generate, each about a million-and-a-half dollars, in the prepared food and beverage tax every year. Well, they would, through this bill, be entitled to receive back half of that, 50% of that for investment in their own communities, which I think is appropriate and fair, given the fact that the people that are paying this tax are largely local people."
But Wake County says this bill will completely overhaul the Prepared Food and Beverage Tax revenue distributions and redirect more than $20 million in annual revenue that had been committed to support prior commitments, such as the Lenovo Center renovations and the Raleigh Convention Center Complex.
The North Carolina Restaurant & Lodging Association strongly opposes HB 1215. In a statement to ABC11, a representative wrote, "The bill weakens support for major tourism drivers that generate substantial economic impact for the entire county."
Pare said there is already a precedent for this type of structure; Mecklenburg County has a similar structure in place.
The bill will now move to the Finance Committee.
