H.O.S.T. SUMMARY
On the November 6, 2012 Ballot, Cherokee
County voters will be asked to consider a
HOST, an additional penny sales tax, which
will be used to reduce property taxes
Cherokee County
where metro meets the mountains
HOMESTEAD OPTION SALES TAX (HOST)
HIGHLIGHTS
* 1 % SALES TAX FOR ELIMINATION OF COUNTY PORTION OF
PROPERTY TAX ON CHEROKEE HOMEOWNERS
* EVERY DOLLAR COLLECTED WILL RESULT IN A DOLLAR OF
PROPERTY TAX RELIEF
* ESTIMATED 20 % OF SALES TAX DOLLARS FROM NON-CHEROKEE
RESIDENTS
* AVERAGE TAX SAVINGS PER CHEROKEE HOUSEHOLD OF $ 100
PER YEAR
= $350 PROPERTY TAX SAVINGS – COUNTY M & O
= ($ 250) AVERAGE HOUSEHOLD SALES TAX INCREASE
* NOVEMBER BALLOT “ SPECIAL ELECTION” SECTION: NOTICE TO
ELECTORS “ => QUESTION 1 AND QUESTION 2 – BOTH MUST PASS
Cherokee County
where metro meets the mountains
HOST – A LOCAL SALES TAX USED TO REDUCE
PROPERTY TAXES
WHAT IS IT and WHAT DOES IT DO ?
• Increase sales tax in Cherokee County from 6% to 7% ( only handful are at 6 % )
• Same categories of goods and services as current State and Local Sales Tax
• 100 % of proceeds from the additional 1% used to reduce General M&O property
taxes for homeowners in their primary residence up to 5 acres (per state law) –
Cities and Unincorporated Cherokee County
• Sales tax is paid by everyone making purchases in Cherokee County
• Thus, reduces burden on property owners by spreading the cost of government
services among all purchasers living in and visiting Cherokee County
Cherokee County
where metro meets the mountains
3
HOST – A LOCAL SALES TAX USED TO REDUCE
PROPERTY TAXES
• Current value of 1% sales tax is ~ $30 Million per year
• New outlet center to open in mid-2013 will add more than $1
Million annually
• Elimination of tax on auto sales will reduce total in future
• Residents who rent do not pay property taxes
• Seniors will have future reduction ( 100 % exclusion in 2016 )
from State income tax
Cherokee County
where metro meets the mountains
4
HOST – A LOCAL SALES TAX USED TO REDUCE
PROPERTY TAXES
HOW WILL IT IMPACT THE AVERAGE HOMEOWNER?
The average home value is ~ $160k. Here is an actual example:
•
•
•
•
•
•
•
•
General M&O
Fire Fund
Parks Bond
School
State
Total Tax
HOST Credit
Final Bill
$ 332.72 • If sales within the
$ 210.84
county continue at
$ 48.45 current levels, this
portion will be
$1,194.18
eliminated from the
homeowner’s tax bill
$ 15.03
$1,801.22
• But that homeowner
will still contribute
($ 332.72)
(with all other buyers)
$1,468.50
through the sales tax
Cherokee County
where metro meets the mountains
5
HOST – A LOCAL SALES TAX USED TO REDUCE
PROPERTY TAXES
IS THIS GIVING THE COUNTY GOVERNMENT MORE TAX DOLLARS?
•No. It is dollar neutral for the government.
•Instead of collecting ~ $35M from property taxes, it is estimated
Cherokee County would collect:
• $30M from sales taxes
$35M
$35M
• $5M from property taxes
• Still $35M in Total
•The County does benefit from:
• diversified revenue sources, and
• cashflow improves since sales tax is received each month, rather than major
property taxes receipts in December - January
Cherokee County
where metro meets the mountains
6
HOST – A LOCAL SALES TAX USED TO REDUCE
PROPERTY TAXES
Option1 : Continue with General M&O Taxes Only Paid By Property Owners
$16.8M
+
$3.6M
+
14.6M
= $35.0 Million Total
Option 2: Implement a HOST Tax to Spread Costs Among Everyone Benefitting
from General County Services
$0 M
+
Primary
Residences <
5 Acres *
$1M
Other
Residential
Cherokee County
where metro meets the mountains
+
$4M
Other Real
Property &
Businesses
+
$30M
Purchasers
= $35.0 Million
Total
* The HOST Credit will first be applied to Primary Residences up to 5 acres. If sales taxes are
adequate – other properties will then benefit. Option 2 is based on current sales tax collections.
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HOST – A LOCAL SALES TAX USED TO REDUCE
PROPERTY TAXES
THE TWO HOST BALLOT QUESTIONS:” SPECIAL ELECTION”
“NOTICE TO ELECTORS: Unless BOTH the homestead exemption AND the sales and use
tax are approved, then neither the exemption nor the sales and use tax shall become
effective.
Question 1 asks to approve/deny the addit’l 1 cent
( ) YES
Shall a retail homestead option sales and use tax of 1 percent be
levied
within the special district within Cherokee County for the purposes
of
funding capital outlay projects and of funding services to
( ) NO
replace revenue lost to an additional homestead exemption of up to
100 percent of the assessed value of homesteads from county taxes for
county purposes ?
----------------------------------------------------------------------------------
( ) YES Shall the Act be approved which provides a homestead exemption from
Cherokee County ad valorem taxes for county purposes of up to 100 percent
as determined from the proceeds generated from the collection of a retail
homestead option sales and use tax for residents of Cherokee County?"
( ) NO
Question 2 asks to approve/deny the addit’l homestead exemption
Cherokee County
where metro meets the mountains
8