Tuesday, January 14, 2014, 4:24 PM

The Privilege License Tax and the Game of Chance


In today's meeting of the Revenue Laws Study Committee they discussed the Privilege License Tax in North Carolina and what a mess the statutory framework is.

Our PLT is a state-authorized, municipally-levied tax on the privilege of doing business in a jurisdiction.  Of the 540 incorporated cities and towns in North Carolina only 300 use it, and many of those municipalities are now very reliant on the revenue.  To fully understand the law governing PLT you must, according to Chris McLaughlin (UNC School of Government), review laws that were repealed over the course the 1990s.  And it seems there is no organized way to do that.  Andy Ellen of the Retail Merchants' Association says he did year-by-year research of the repeals at the NC Supreme Court Library.

The North Carolina League of Municipalities and some members of the committee are ready to take a stab at reforming the PLT.  Also at issue are the various rates for the cost of doing business, for example an auto dealer would pay $25 per year and a gas station would pay $12.50 per year.  Compare that to an Internet Sweepstakes operation’s tax of $5000 per year for the establishment plus $2500 per machine in Lumberton, NC.

Nice segue to video poker...

Our Legislature has been outlawing video poker year after year, but because the intent is not to outlaw our state lottery or McDonald's Monopoly the laws have been specific as to the details of the game and not the act of gambling.  Whack-a-mole has ensued and now what our courts are dealing with is whether the super-high privilege tax is constitutional.  NC's Supreme Court said the tax was too high in Lumberton and the Court of Appeals used that decision in its ruling on Fayetteville.

So the questions remaining:  Are sweepstakes legal or illegal in North Carolina? And, how high a Privilege License tax is too high?

** Go here to learn more about Andy Ellen and the NC Retail Merchants' Association:  http://www.ncrma.org/about-us/ncrma-staff/

** Go here to learn more about Chris McLaughlin and the UNC School of Government:  http://www.sog.unc.edu/user/111


0 Comments:

Post a Comment

Thank you for visiting our blog. Please comment after registering.

Links to this post:

Create a Link

<< Home

back to top