Law standardizes occupancy‑tax use across all North Carolina municipalities
By BC News Staff Writer
Raleigh, NC — Senate Bill 484, ratified June 18 and signed into law by Gov. Josh Stein, establishes a statewide framework for how room occupancy tax revenue must be used in North Carolina. The new law applies to every county and municipality with an occupancy tax, not just coastal communities, and requires all local acts to conform to the same spending model.
Under the updated structure, two‑thirds of all occupancy‑tax revenue must be directed to tourism promotion, while the remaining one‑third is limited to tourism‑related activities. Municipalities may no longer use these funds for general government services such as police, fire, sanitation, administration, or other core operations.
The change removes long‑standing flexibility that many towns, particularly in high‑tourism regions, have relied on to manage seasonal population surges.
Coastal communities are expected to feel the impact most immediately, as many have historically used occupancy‑tax dollars to support peak‑season public safety staffing, beach‑area waste collection, and other services that expand during summer months. With those uses now prohibited, local governments will be required to shift these expenses to their general funds, potentially affecting budget planning for the 2026‑27 fiscal year.
The law also standardizes the structure of tourism development authorities across the state, aligning them with the statewide model and requiring updates to local policies and financial practices. All future occupancy‑tax authorizations must follow the same framework.
SB 484 took effect upon the governor’s signature and will guide how tourism‑related revenue is allocated in every North Carolina community moving forward.
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