North CarolinaNorth Carolina law limits lodging tax spending on hotels and resident services
Cities and counties that levy occupancy taxes face limits on using tourism-related proceeds for resident services, unless a local act allows those uses.
What it does
Covered cities and counties cannot use room occupancy tax proceeds to develop or build hotels or other short-term lodging facilities.
Cities and counties cannot use tourism-related room tax proceeds for ordinary resident services or purposes that mainly benefit residents, unless a local act allows it.
Argument forKeeping tourism-related tax proceeds from paying for routine resident services could leave more money available for tourism-related spending.
Argument againstCities and counties may have less room to use tourism-related tax proceeds for resident services, including emergency services and affordable housing, without local approval.
More detail
The law bars room occupancy tax proceeds from paying to develop or build hotels or other short-term lodging facilities. This restriction applies to the cities, towns, counties, and districts covered by the remainder of the room occupancy tax rules in the cited sections. The law took effect June 22, 2026, and applies to occupancy tax proceeds collected on or after that date.
Cities and counties cannot use tourism-related room occupancy tax proceeds for certain resident services or purposes that mainly benefit residents. This restriction applies to all cities and counties that levy an occupancy tax. It covers services ordinarily provided to residents and purposes designed for or mainly benefiting residents, including waste, water, fire, public safety, housing, and education services. A local act may explicitly authorize these uses. The law took effect June 22, 2026, and applies to occupancy tax proceeds collected on or after that date.
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Where it stands
- Introduced
- Passed Senate
- Passed House
- To Governor
- Became Law
Looking ahead
No hearings or votes scheduled.
History
- 2026
- Jun 22Signed by Gov. 6/22/2026Became Law
- Jun 22Ch. SL 2026-15Major
- Jun 19Pres. To Gov. 6/19/2026To Governor
- Jun 18Ratified
- Jun 17Withdrawn From Com
- Vote recorded Motion 9 To Concur. Result: pass.Upper
- Jun 17Placed on Today's Calendar
- Jun 17Concurred In H Com SubMajor
- Jun 17Ordered Enrolled
- Jun 3Regular Message Sent To Senate
- Jun 3Regular Message Received For Concurrence in H Com Sub
- Jun 3Ref To Com On Rules and Operations of the SenateMinor
- Jun 2Reptd Fav Com SubstituteMinor
- Vote recorded Second Reading. Result: pass.Lower
- Jun 2Re-ref Com On Rules, Calendar, and Operations of the HouseMinor
- Jun 2Reptd FavMinor
- Jun 2Cal Pursuant Rule 36(b)
- Jun 2Added to Calendar
- Jun 2Passed 2nd ReadingMinor
- Jun 2Passed 3rd ReadingPassed House
- May 18Withdrawn From Com
- May 18Re-ref to the Com on Finance, if favorable, Rules, Calendar, and Operations of the HouseMinor
- 2025
- May 8Passed 1st ReadingMinor
- May 8Ref To Com On Rules, Calendar, and Operations of the HouseMinor
- May 7Passed 2nd ReadingMinor
- May 7Passed 3rd ReadingPassed Senate
- May 7Special Message Sent To House
- May 7Special Message Received From Senate
- May 6Reptd FavMinor
- Apr 29Reptd Fav Com SubstituteMinor
- Apr 29Com Substitute Adopted
- Apr 29Re-ref Com On Rules and Operations of the SenateMinor
- Apr 1Withdrawn From Com
- Apr 1Re-ref to Judiciary. If fav, re-ref to Rules and Operations of the SenateMinor
- Mar 26Passed 1st ReadingMinor
- Mar 26Ref To Com On Rules and Operations of the SenateMinor
- Mar 25FiledIntroduced
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