House Bill 305 / SL 2025-87
HB 305 is a Guilford County–specific local act that changes how certain local sales tax revenues are distributed and used. The bill creates a mechanism allowing qualifying municipalities in Guilford County that do not levy ad valorem taxes and do not already receive ad valorem-based distributions to receive a portion of local sales and use tax proceeds. A municipality must opt in by resolution, and the distribution continues only while the municipality remains eligible or until the county switches back to the per capita distribution method.
The bill also amends the referendum ballot question for a Guilford County Article 46 quarter-cent local sales and use tax and specifies how those tax proceeds must be spent. It directs county proceeds first to fire and rescue equipment and capital needs, then to Guilford Technical Community College capital expenditures, and then to classroom teacher salary supplements. For the Town of Summerfield, the bill creates a special rule requiring its share to be passed through to the Summerfield Fire District until a $3 million cumulative threshold is reached, after which the town may use the funds for any public purpose.
HB 305 amends multiple provisions in Chapter 105 of the North Carolina General Statutes as applied only to Guilford County, including the referendum and administration rules for Article 46 local sales and use taxes and the county’s distribution framework under G.S. 105-472. It authorizes a new distribution path for certain municipalities that do not levy property taxes, requires county and municipal resolutions to trigger participation, and includes hold-harmless protections so taxing districts are not disadvantaged by the municipal allocation. The act also imposes use restrictions on county and municipal recipients, including fire protection, community college capital, teacher supplements, and public-purpose spending, depending on the recipient.
The available record suggests the bill was enacted without recorded committee debate or vote opposition in the provided materials, indicating generally favorable or at least uncontroversial legislative treatment. Its final status as Session Law 2025-87 and ratification on July 31, 2025, also suggests it moved successfully through both chambers. The bill’s structure reflects a negotiated local funding arrangement rather than a broad statewide policy dispute.
The main points of potential contention are the redistribution of sales tax proceeds and the special treatment of certain Guilford County municipalities, especially those that do not levy ad valorem taxes. Counties, municipalities, and taxing districts could differ over whether the new allocation is equitable, whether it reduces county flexibility, and whether the hold-harmless provisions adequately protect existing district funding. The use restrictions on Article 46 proceeds, particularly the earmarks for fire services, Guilford Technical Community College, and teacher supplements, may also have been a point of negotiation because they limit how local governments can spend the revenue.