Alamance County

Action Item

MOU-Sales Tax Reimbursement


Department:County ManagerSponsors:

Issue/Action Requested

Board will consider a Memorandum of Understanding between Alamance County and the Alamance-Burlington School System which outlines the terms of an agreement for Alamance County to make payment directly to vendors for the capital projects being renovated or constructed using bond debt.  This agreement will allow us to request a full refund of sales tax paid during bond project construction.


To remain legally compliant, Alamance County would pay direct construction costs using bond funds but would pay any sales tax with local funding to be reimbursed per statutory guidelines.  

Background/Purpose of Request

North Carolina allows an annual refund of sales and use taxes paid on direct purchases and leases of tangible personal property and services to certain entities per G.S. 105-164.14(c). Since a County may receive the annual refund of sales and use tax but a school system may not, Alamance County will directly pay vendors for the school renovation and construction projects in order to request a refund of any sales and use tax incurred.  This agreement was reviewed by our bond attorney for compliance with laws related to bond issuance, the County attorney, and legal representatives of Alamance-Burlington School System.  Other North Carolina Counties and School Systems have used a similar arrangement.

Meeting History

Mar 2, 2020 9:00 AM  Alamance County Board of Commissioners Regular Meeting

County Manager Hagood asked the Board to approve an agreement with the school system pertaining to the sales tax for the education bond construction projects. Under the agreement the county would directly pay for the construction costs. County Manager Hagood explained that the school system was not eligible to be reimbursed for sales tax.

MOVER:Steve Carter, Vice Chairman
SECONDER:Bill Lashley, Commissioner
AYES:Bill Lashley, Amy Scott Galey, Steve Carter, Eddie Boswell, Tim D. Sutton