Counties receive funding from several sources, but taxes provide most of the revenue. Counties do not have the authority to implement new taxes or increase existing taxes, other than the property tax.
Property taxes are the largest source of revenue, comprising 40 percent of all revenue generated by North Carolina counties in the 2005-06 fiscal year.* Property taxes are value-based taxes paid on various types of property (i.e. residential or commercial real estate, automobiles, boats, etc.). The taxing authority performs an appraisal of the monetary value of the property, and tax is assessed in proportion to that value.
The North Carolina Constitution requires that all property be assessed at its fair market value, and state law requires counties to re-assess property values every eight years. Counties can do so more frequently if they choose.
Local sales taxes are another important source of revenues for counties, providing 15 percent of county revenues in 2005-06. Each county shares its sales tax revenues with all the incorporated municipalities within its borders.
Some counties levy special taxes on hotels or prepared meals.
Intergovernmental transfers make up another significant source of revenue for counties. These are monies that the federal or state governments provide to counties to pay for services that counties are mandated by either federal or state law to provide, such as public health or public education.
Counties also derive revenue from other sources, such as locally imposed fees for services like trash pick-up or water and sewer provision, special taxes to fund volunteer fire departments or Emergency Medical Services units, and fees for restaurant inspections and building permits.
* Source: N.C. Department of the State Treasurer