A BILL TO BE ENTITLED
AN ACT to exempt groceries from the local Sales Tax.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 105‑465 reads as rewritten:
"§ 105‑465.  County election as to adoption of local sales and use tax.
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The county board of elections shall prepare ballots for the special election. The question presented on the ballot shall be "FOR one percent (1%) local sales and use tax on items subject to States sales and use tax at the general State rate" or "AGAINST one percent (1%) local sales and use tax on items subject to State sales and use tax at the general State rate."
…."
SECTION 2.  G.S. 105‑467 reads as rewritten:
"§ 105‑467.  Scope of sales tax.
(a)	Sales Tax. – The sales tax that may be imposed under this Article is limited to a tax at the rate of one percent (1%) of the following:
(1)	A retailer's net taxable sales and gross receipts that are subject to the general rate of sales tax imposed by the State under G.S. 105‑164.4 except the tax does not apply to the sales price of an item taxable under G.S. 105‑164.4(a)(1a).
(2)	through (4) Repealed by Session Laws 2011‑330, s. 45, effective June 27, 2011.

(5b)	Repealed by Session Laws 2013‑3.4(c), effective July 1, 2014, and applicable to purchases made on or after that date.
(6),	(7) Repealed by Session Laws 2011‑330, s. 45, effective June 27, 2011.
(8)	The presumed sales price of an item of tangible personal property under G.S. 105‑164.12B.
(b)	Exemptions and Refunds. – The State exemptions and exclusions contained in Article 5 of Subchapter I of this Chapter apply to the local sales and use tax authorized to be levied and imposed under this Article. The State refund provisions contained in G.S. 105‑164.14 and G.S. 105‑164.14A apply to the local sales and use tax authorized to be levied and imposed under this Article. A refund of an excessive or erroneous State sales tax collection allowed under G.S. 105‑164.11 and a refund of State sales tax paid on a rescinded sale or cancelled service contract under G.S. 105‑164.11A apply to the local sales and use tax authorized to be levied and imposed under this Article. The aggregate annual local refund amount allowed an entity under G.S. 105‑164.14(b) for the State's fiscal year may not exceed thirteen million three hundred thousand dollars ($13,300,000).
…."
SECTION 3.  G.S. 105‑469 reads as rewritten:
"§ 105‑469.  Secretary to collect and administer local sales and use tax.
(a)	The Secretary shall collect and administer a tax levied by a county pursuant to this Article.

(b)	The Secretary shall require retailers who collect use tax on sales to North Carolina residents to ascertain the county of residence of each buyer and provide that information to the Secretary along with any other information necessary for the Secretary to allocate the use tax proceeds to the correct taxing county."
SECTION 4.  G.S. 105‑506.2 reads as rewritten:
"§ 105‑506.2.  Exemption of food.
A tax levied under this Article does not apply to the sales price of food that is exempt from tax pursuant to G.S. 105‑164.13B."
SECTION 5.  G.S. 105‑538 reads as rewritten:
"§ 105‑538.  Administration of taxes.
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Except as provided in this Article, the adoption, levy, collection, administration, and repeal of these additional taxes must be in accordance with Article 39 of this Chapter. G.S. 105‑468.1 is an administrative provision that applies to this Article. A tax levied under this Article does not apply to the sales price of food that is exempt from tax pursuant to G.S. 105‑164.13B. The Secretary shall not divide the amount allocated to a county between the county and the municipalities within the county."
SECTION 6.  Section 9 of Chapter 1096 of the 1967 Session Laws, as amended by Section 2 of Chapter 12 of the 1979 Session Laws, Section 3 of Chapter 4 of the 1981 Session Laws, Section 13(e) of S.L. 2001‑427, Section 45.11(c) of S.L. 2003‑284, Section 27(b) of S.L. 2003‑416, and Section 19 of S.L. 2009‑445, reads as rewritten:
"Sec. 9. Distribution. The Secretary of Revenue must divide the net proceeds of the tax collected under this division to Mecklenburg County and its municipalities in accordance with the ad valorem distribution method described in G.S. 105‑472(b)(2).
The Secretary of Revenue must reduce the amount distributable to Mecklenburg County under this section by the amount set in G.S. 105‑522. This reduction does not affect the amount allocated to municipalities under this section.
If any provision of this Act or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of the Act which can be given effect without the invalid provision or application, and to this end the provisions of this Act are declared to be severable."
SECTION 7.  G.S. 105‑164.13B(b) is repealed.
SECTION 8.  This act becomes effective October 1, 2026, and applies to sales made on or after that date.