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GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
SESSION LAW 2026-35
HOUSE BILL 332
*H332-v-6*
AN ACT TO MODIFY NAS H COUNTY'S OCCUPANCY TAX, TO CREATE ROCK Y
MOUNT DISTRICT R, AN D TO AUTHORIZE THE D ISTRICT TO LEVY AN
OCCUPANCY TAX OF UP TO TWO PERCENT (2%).
The General Assembly of North Carolina enacts:
PART I. NASH COUNTY OCCUPANCY TAX CHANGES
SECTION 1.1.(a) Sections 1 and 2 of Chapter 32 of the 1987 Session Laws, as
amended by S.L. 1993-545, S.L. 1997-255, and S.L. 2001-349, read as rewritten:
"Section 1. Occupancy tax. – (a) Authorization and scope. – The Nash County Board of
Commissioners may levy a room occupancy tax of three percent (3%) of the gross receipts
derived from the rental of any room, lodging, or similar an accommodation furnished by a hotel,
motel, inn, or similar place within the county that is subject to sales tax imposed by the State
under G.S. 105-164.4(a)(3). This tax is in addition to any State or local sales tax. This tax does
not apply to accommodations furnished by nonprofit charitable, educational, or religious
organizations.
(a1) Authorization of Additional Tax. – In addition to the tax authorized by subsection (a)
of this section, the Nash County Board of Commissioners may levy an additional room
occupancy tax of up to two percent (2%) of the gross receipts derived from the rental of
accommodations taxable under subsection (a). The levy, collection, administration, and repeal of
the tax authorized by this subsection shall be in accordance with the provisions of this section.
Nash County may not levy a tax under this subsection unless it also levies the tax authorized
under subsection (a) of this section.
(b) Administration. – A tax levied under this section shall be levied, administered,
collected, and repealed as provided in G.S. 153A-155. The penalties provided in G.S. 153A-155
apply to a tax levied under this section.
(c) Distribution and use of tax revenue. – Nash County shall, on a quarterly basis, remit
the net proceeds of the occupancy tax levied under subsection (a) of this section to the Nash
County Tourism Development Authority and the net proceeds of the occupancy tax levied under
subsection (a1) of this section to the City of Rocky Mount. Authority. The Authority shall spend
use at least two -thirds of the funds remitted to it only to promote travel and tourism in Nash
County, the county and shall spend use the remainder on for tourism-related expenditures. The
City of Rocky Mount shall spend the funds remitted to it only for tourism -related expenditures
within Nash County that have been specifically approved in advance by the Nash County
Tourism Development Authority. expenditures in the county. The following definitions apply in
this subsection:
(1) Net proceeds. – Gross proceeds less the cost to the county of administering
and collecting the tax, as determined by the finance officer, not to exceed three
percent (3%) of the first five hundred thousand dollars ($500,000) of gross
proceeds collected each year and one percent (1%) of the remaining gross
receipts collected each year.
Page 2 Session Law 2026-35 House Bill 332
(2) Promote travel and tourism. – To advertise or market an area or activity,
publish and distribute pamphlets and other materials, conduct market research,
or engage in similar promotional activities that attract tourists or business
travelers to the area; the term includes administrative expenses incurred in
engaging in the listed activities.
(3) Tourism-related expenditures. – Expenditures that that, in the judgment of the
Tourism Development Authority, are designed to increase the use of lodging
facilities in a county accommodations, meeting facilities, or convention
facilities in the county or to attract tourists or business travelers to the county
and expenditures incurred by the county in collecting the tax. county. The term
includes expenditures to construct, maintain, operate, or market a convention
center and other expenditures that, in the judgment of the Authority, will
facilitate and support tourism.tourism-related capital expenditures.
"Sec. 2. Tourism Development Authority. – (a) Appointment and membership. – When the
Board of Commissioners adopts a resolution levying a room occupancy tax under this act, it shall
also adopt a resolution creating a county Tourism Development Authority, which shall be a
public authority under the Local Government Budget and Fiscal Control Act. The resolution shall
provide for the Board of Commissioners to appoint the membership of the Authority, for the
terms of office of the members, including the members ' terms of office, and for the filling of
vacancies on the Authority. At lea st one -third of the members must be individuals who are
affiliated with businesses that collect the tax in the county. If the Authority has an even number
of members, then at least one -half of the members shall have experience in the promotion of
travel and tourism. If the Authority has an odd number of members, then at least one less than
one-half of the members shall have experience in the promotion of travel and tourism. county,
and at least one -half of the members must be individuals who are currently a ctive in the
promotion of travel and tourism in the county. No elected official may serve as a member of the
Authority. The Board of Commissioners shall designate one member of the Authority as chair
and shall determine the compensation, if any, to be paid to members of the Authority.
The Authority shall meet at the call of the chair or upon a written request signed by at least
one-third of its members and shall adopt rules of procedure to govern its meetings. The Finance
Officer for Nash County shall be the ex officio finance officer of the Authority.
(b) Duties. – The Authority shall promote travel, tourism, and conventions in the county,
and shall expend the net tax proceeds distributed to it under this act for the purposes provided in
Section 1(c) of this act.
(c) Reports. – The Authority shall report quarterly and at the close of the fiscal year to
the Board of County Commissioners on its receipts and expenditures for the preceding quarter
and for the year in such detail as the Board may require."
SECTION 1.1.(b) This section is effective October 1, 2026, and applies to gross
receipts derived from the rental of an accommodation that a person occupies or has the right to
occupy on or after that date. The reduction of the room occupancy tax under this section does not
affect a liability for a tax that was attached before the effective date of the reduction, nor does it
affect a right to a refund of a tax that accrued before the effective date of the reduction.
SECTION 1.1.(c) As soon as practicable after t he repeal of the two percent (2%)
room occupancy tax under this section and the creation of the Rocky Mount District R Tourism
Development Authority under Section 1.4 of this Part, Nash County shall remit to the Rocky
Mount District R Tourism Development A uthority the net proceeds of the two percent (2%)
occupancy tax that have been collected but not yet remitted to the City of Rocky Mount. In
addition, any unexpended net proceeds of the two percent (2%) room occupancy tax held by the
City of Rocky Mount as of October 1, 2026, shall be remitted to the Rocky Mount District R
Tourism Development Authority upon its creation. The net proceeds derived from the two
percent (2%) occupancy tax that are remitted to the Rocky Mount District R Tourism
House Bill 332 Session Law 2026-35 Page 3
Development Authority under this subsection shall be used for the same purposes as authorized
for the City of Rocky Mount under Section 1(c) of Chapter 32 of the 1987 Session Laws, as
amended by S.L. 1993-545, S.L. 1997-255, and S.L. 2001-349.
SECTION 1.2. Rocky Mount Dis trict R Created. – Rocky Mount District R is
created as a taxing district. Its jurisdiction consists of only that part of Rocky Mount that is
located within Nash County. Rocky Mount District R is a body politic and corporate and has the
power to carry out the provisions of this Part. The Rocky Mount City Council shall serve ex
officio as the governing body of the district, and the officers of the City shall serve as the officers
of the governing body of the district. A simple majority of the governing body constitutes a
quorum, and approval by a majority of those present is sufficient to determine any matter before
the governing body, if a quorum is present.
SECTION 1.3. Occupancy tax. – (a) Authorization and Scope. – The governing body
of Rocky Mount Distr ict R may levy a room occupancy tax of up to two percent (2%) of the
gross receipts derived from the rental of an accommodation within the district that is subject to
sales tax imposed by the State under G.S. 105-164.4(a)(3). This tax is in addition to any State or
local sales tax.
SECTION 1.3.(b) Administration. – A tax levied under this Part shall be levied,
administered, collected, and repealed as provided in G.S. 160A-215. The penalties provided in
G.S. 160A-215 apply to a tax levied under this section.
SECTION 1.3.(c) Distribution and Use of Tax Revenue. – Rocky Mount District R
shall, on a quarterly basis, distribute the net proceeds of the occupancy tax to the Rocky Mount
District R Tourism Development Authority. The Authority shall use at least two -thirds of the
proceeds distributed to it to promote travel and tourism and shall use the remainder for
tourism-related expenditures. In accordance with the North Carolina Constitution and the United
States Constitution, the tax proceeds may be used only for the direct benefit of the jurisdiction of
Rocky Mount District R.
The following definitions apply in this subsection:
(1) Net proceeds. – Gross proceeds less the cost to the district of administering
and collecting the tax, as determined by the finance officer, not to exceed three
percent (3%) of the first five hundred thousand dollars ($500,000) of gross
proceeds collected each year and one percent (1%) of the remaining gross
receipts collected each year.
(2) Promote travel and tourism. – To advertise or market an area or activity,
publish and distribute pamphlets and other materials, conduct market research,
or engage in similar promotional activities that attract tourists or business
travelers to the area. The term includes administrative expenses inc urred in
engaging in the listed activities.
(3) Tourism-related expenditures. – Expenditures that, in the judgment of the
Tourism Development Authority, are designed to increase the use of
accommodations, meeting facilities, or convention facilities in the district or
to attract tourists or business travelers to the district. The term includes
tourism-related capital expenditures.
SECTION 1.4. Tourism Development Authority. – (a) Appointment and
Membership. – When the governing body of Rocky Mount District R adopts a resolution levying
a room occupancy tax under this Part, it shall also adopt a resolution creating a district Tourism
Development Authority, which shall be a public authority under the Local Government Budget
and Fiscal Control Act. The resolut ion shall provide for the membership of the Authority,
including the members' terms of office, and for the filling of vacancies on the Authority. At least
one-third of the members shall be individuals who are affiliated with businesses that collect the
tax in the district, and at least one -half of the members shall be individuals who are currently
active in the promotion of travel and tourism in the district. No elected official may serve as a
Page 4 Session Law 2026-35 House Bill 332
member of the Authority. The governing body of Rocky Mount Distr ict R shall designate one
member of the Authority as chair and shall determine the compensation, if any, to be paid to
members of the Authority.
The Authority shall meet at the call of the chair and shall adopt rules of procedure to
govern its meetings. Th e finance officer for the City of Rocky Mount shall be the ex officio
finance officer of the Authority.
SECTION 1.4.(b) Duties. – The Authority shall expend the net proceeds of the tax
levied under this Part for promoting travel and tourism and for touris m-related expenditures as
provided in this Part.
SECTION 1.4.(c) Reports. – The Authority shall report quarterly and at the close of
the fiscal year to the Rocky Mount City Council on its receipts and expenditures for the preceding
quarter and for the year in such detail as the City Council may require.
SECTION 1.5. A room occupancy tax levied under this Part may not become
effective any earlier than the effective date of the repeal of the two percent (2%) room occupancy
tax under Section 1.1(a) of this act.
SECTION 1.6. G.S. 160A-215(g) reads as rewritten:
"(g) Applicability. – Subsection (c) of this section applies to all cities that levy an
occupancy tax. To the extent subsection (c) conflicts with any provision of a local act, subsection
(c) supersedes that provision. The remainder of this section applies only to Beech Mountain
District W, to the Cities of Belmont, Burlington, Conover, Eden, Elizabeth City, Gastonia,
Goldsboro, Graham, Greensboro, Hickory, High Point, Indian Trail, Jacksonville, Kings
Mountain, Lake Santeetlah, Lenoir, Lexington, Lincolnton, Lowell, Lumberton, Mebane,
Monroe, Mount Airy, Mount Holly, Reidsville, Roanoke Rapids, Salisbury, Sanford, Shelby,
Statesville, Washington, and Wilmington, to the Towns of Ahoskie, Beech Mountain, Benson,
Bermuda Run, Blowing Rock, Boiling Springs, Boone, Burgaw, Carolina Beach, Carrboro,
Cooleemee, Cramerton, Dallas, Dobson, Elkin, Elon, Fontana Dam, Four Oaks, Franklin, Grover,
Hillsborough, Jefferson, Jonesville, Kenly, Kure Beach, Lansing, Lelan d, McAdenville,
Mocksville, Mooresville, Murfreesboro, North Topsail Beach, Pembroke, Pilot Mountain, Ranlo,
Robbinsville, Selma, Smithfield, St. James, St. Pauls, Swansboro, Troutman, Tryon, West
Jefferson, Wrightsville Beach, Yadkinville, Yanceyville, to the municipalities in Avery and
Brunswick Counties, to Clayton District C, Rocky Mount District R, Saluda District D, and
Stallings District S."
SECTION 1.7. Except as otherwise provided, this Part is effective when it becomes
law.
House Bill 332 Session Law 2026-35 Page 5
PART II. EFFECTIVE DATE
SECTION 2. Except as otherwise provided, this act is effective when it becomes
law.
In the General Assembly read three times and ratified this the 2nd day of July, 2026.
s/ Phil Berger
President Pro Tempore of the Senate
s/ John R. Bell, IV
Presiding Officer of the House of Representatives