Corolla group files lawsuit over occupancy tax spending
The Corolla Civic Association (CCA) has filed a complaint against Currituck County in North Carolina Superior Court questioning the county’s spending of more than $40 million of occupancy tax proceeds collected since 2004.
The civic group stated in a release the lawsuit objective is to free up funds for beach nourishment, a permitted use. The group claims that since 2004, when the state authorized an increase in the occupancy tax rate by 50%, allowing its use for beach nourishment, Currituck County has spent less than $50,000 on beach nourishment.
The civic group is asking the court to define how the county can spend revenue generated from the occupancy tax and return $40 million in past funds to the Tourism Development Authority. Currituck County manager Daniel F. Scanlon II had no comment on the pending legal action.
Currituck County’s occupancy tax began in 1987. The tax rate initially was three percent, increased in 1992 to four percent and increased again to six percent in 2006. At least two-thirds of the net proceeds of the tax levied must be used to promote travel and tourism and the remainder is to be used for tourism-related expenditures.