Revenue sharing is a funding arrangement in which one government unit grants a portion of its tax income to another government unit. For example, provinces or states may share revenue with local governments, or national governments may share revenue with provinces or states. Laws determine the formulas by which revenue is shared, limiting the controls that the unit supplying the money can exercise over the receiver and specifying whether matching funds must be supplied by the receiver.
This form is a generic example that may be referred to when preparing such a form for your particular state. It is for illustrative purposes only. Local laws should be consulted to determine any specific requirements for such a form in a particular jurisdiction.
The North Carolina Revenue Sharing Agreement is a legal agreement between the state of North Carolina and its local governments that outlines the distribution of revenue collected by the state. This agreement allows for a fair allocation of funds to local governments, enabling them to provide essential services and meet the needs of their communities. Revenue sharing agreements are crucial in maintaining a balanced fiscal relationship between the state and local governments. In North Carolina, there are several types of revenue sharing agreements, each serving different purposes. These include: 1. Sales Tax Revenue Sharing: This agreement involves the sharing of revenue collected from the sales tax. The state allocates a certain percentage of the sales tax revenue to local governments based on predetermined factors such as population, need, or other criteria. This helps local governments supplement their budgets and fund various projects. 2. Local Option Sales Tax (LOST) Revenue Sharing: LOST revenue sharing agreements allow local governments to impose an additional sales tax on top of the state sales tax. The additional revenue generated from this local option sales tax is then shared between the state and local governments according to an agreed-upon formula. This arrangement gives local governments the flexibility to generate additional revenue while still contributing to the state's overall revenue pool. 3. Intergovernmental Transfers: Another form of revenue sharing in North Carolina occurs through intergovernmental transfers. This involves the transfer of funds from the state to local governments for specific purposes, such as education, healthcare, transportation, or environmental conservation. These funds are typically distributed based on specific program requirements and the needs of individual communities. 4. Federal-State Revenue Sharing: North Carolina also engages in revenue sharing agreements with the federal government. This includes various federal grants, such as the Community Development Block Grant (CBG), which provides funding for community development initiatives. These federal-state revenue sharing agreements aim to ensure that federal funds are shared equitably among states and their local governments. Overall, the North Carolina Revenue Sharing Agreement and its various types are essential mechanisms for promoting fiscal balance between the state and its local governments. These agreements provide vital resources to support local infrastructure, public services, and the overall well-being of North Carolina's communities.
