Item:
Title
Approval of Interlocal Cooperation Agreement for the Division of Sales Tax Between the County of Durham and the City of Durham July 1, 2026 to June 30, 2027
Body
Date of BOCC Meeting: March 9, 2026
Request for Board Action:
Agenda Text
The Board is requested to approve a one-year interlocal cooperation agreement for the division of sales tax between the County of Durham and the City of Durham for the period July 1, 2026 through June 30, 2027. This interlocal pertains to Sales Tax Articles 39, 40, & 42 and 44 (including Local Government Hold Harmless Provisions). City administration has agreed to amending the current interlocal agreement per agreed upon guidelines for an additional year.
The updated agreement, renewed annually, splits collected sales tax (except Article 46) for both the City and County, with the County receiving 55.0% of the total amount and the City 45.0%. Per state statute the County Commissioners have the authority to set the distribution method for Sales Tax Articles. This agreement continues the use of the Per Capita Distribution method which is best for both local governments due to the nuances of the Ad Valorem method.
The split had been at 55.5% and 44.5% for the prior two fiscal years. However, with recent property tax increases by both governments the percentage split has changed slightly. The actual split will vary over fiscal years based on a variety of factors from each government's tax rate changes to population shifts. The budget offices of both governments work together each Fall to establish an agreement for future years. This agreement is then reviewed with both Management teams before being brought forward to the elected officials of each respective government.
The Durham City Council is set to approve this annual interlocal cooperation agreement at an upcoming City Council meeting for the next fiscal year (FY 2026-27).
Alignment with Strategic Plan: This item aligns with Durham Co...
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