Occupancy Tax Investment

Although the Currituck Outer Banks (COBX) contributes more than half of the County’s property tax and sales tax revenues, all of the significant improvements on COBX have come from County Occupancy Tax (OT) revenue. OT is a 6% tax on all vacation property rentals and generates more than ten million dollars per year. The objective of the tax is to promote tourism and increase the attractiveness of tourist venues that, in turn, generate increased taxes.

The Corolla Civic Association (CCA) has provided lists of proposed projects for OT spending to the County on an annual basis in order to influence these investments. However, progress has been slow in COBX because much of the funds have been used to build recreation facilities, like a YMCA, largely for the benefit of mainland county residents.

In recent years CCA has become more proactive to investigate how the more than $150 million of OT collected over the past 15 years has been spent. When more and more concerns were raised by members about the legality of this spending, CCA had a series of meetings with the County to discuss these matters to no avail. In early 2018 hundreds of COBX residents and business owners collaborated on a recommended ten-year OT spending plan and asked the County to sit down and discuss the plans. The County rejected these requests and, in fact, canceled the monthly luncheon discussion meetings.CCA then hired an attorney to review the law and the spending patterns. This attorney agreed that there were serious questions about the spending and recommended that if the County was unwilling to discuss changes to their OT spending processes to comply with the law, then CCA should ask the Courts to step in.

When CCA’s 2018 Public Records request revealed deeply disturbing information about the County’s OT spending processes and motivations we filed suit to ask the Court to rule on the legality of certain past spending and impose guidelines to ensure adherence to the law.