# North Carolina Department of Revenue

The North Carolina Department of Revenue was created in 1921 by the North Carolina General Assembly. The department is headed by a Secretary that is appointed by the Governor. The secretary is a member of the North Carolina Cabinet. Currently, the department is responsible for administering the collection of the North Carolina state income tax, gasoline tax, sales tax, beverage tax, and inheritance tax.

## History

When the North Carolina Constitution was rewritten after the American Civil War in 1868, the North Carolina State Tax Commission was authorized to tax trades, professions, franchises, and incomes. In 1903, the State Tax Commission recommended leaving property taxes to local authorities while income, license, franchise, and inheritance taxes would remain with the state. In 1921, the General Assembly enacted a state-administered personal and corporate income tax. As part of this new tax legislation, the assembly created the Department of Revenue to administer, enforce and collect the income tax. The department was to be led by a Commissioner of Revenue, with the inaugural commissioner to be appointed by the Governor of North Carolina to a four-year term with the advice and consent of the State Senate and, beginning in 1924, the office holder was to be chosen in statewide popular elections. In 1929 the law was altered to eliminate election of the commissioner and instead have them be appointed by the governor.
At its inception, the Department of Revenue had 16 employees and worked out of the State Capitol's Senate Chamber, clerk's office and committee rooms. The department expanded over the following years and moved to different quarters as it was given new responsibilities, including management of the gasoline, licensing, and bus and truck franchise taxes and oversight of the North Carolina State Highway Patrol through a Motor Vehicle Bureau. When the financing of schools, roads, and prisons was shifted from local government to state government responsibility in the 1930s, a retail sales tax of three percent was enacted to pay for it with the Department of Revenue responsible for collecting it. The tax system under the Department of Revenue management has remained almost unchanged since then. In 1941 the General Assembly transformed the Motor Vehicle Bureau into an independent Department of Motor Vehicles, leaving the Department of Revenue with the responsibility of collecting the gasoline tax. The agency began using automated machinery to process individual income tax returns in 1960.
In 1971 the North Carolina General Assembly passed the Executive Reorganization Act. The law reformed the Department of Revenue to encompass the office of the commissioner of revenue, the Tax Research Board, and the State Board of Assessment. Two years later the title of the head of the department was changed from "commissioner" to "secretary". Legislation abolished the State Board of Assessment effective July 1, 1973 and directly assigned the department the responsibility of assessing the value of public utilities' property and overseeing county and municipal assessments of property under their jurisdiction. The General Assembly authorized the construction of a new headquarters in Raleigh for the department in 1986, and it was brought into use in 1992. The department was equipped with a computer system to host an integrated records database and collect and process taxes electronically in the 1990s; computerization was completed by 1997. In January 2011 a Local Government Division was created in the department to advise local governments' tax collection, auditing, and other processes.

## Structure and function

The Department of Revenue is an agency represented in the North Carolina Cabinet. It collects state taxes and administers tax legislation. It also researches taxation and supervises property assessing in the state. It is led by the Secretary of Revenue. Appointed by the governor, the secretary is an ex officio member of the State Tax Review Board and the North Carolina Local Government Commission. Under the secretary are a chief operating officer and five assistant secretaries. The Internal Audit Division director, a legislative liaison, public affairs director, chief financial officer, Office of the Taxpayer Advocate director, a human resources director, a general counsel, and an administrative assistant all report to the secretary. The assistant secretaries report to the chief operating officer.
The five assistant secretaries' responsibilities are defined as follows:
* Assistant Secretary for Tax Administration
** Corporate Tax Division
** Personal Tax Division
** Excise Tax Division
** Sales and Use Tax Division
** Local Government Division
* Assistant Secretary for Business Services
** Business Operations
** Purchasing
** Tax Schedule Implementation
** Customer Service
** Service Operations
** Submissions Processing
** Digital Communications
** Service Management Applications and Testing
* Assistant Secretary for Tax Enforcement and Compliance
** Examination Division
** Taxpayer Assistance and Collection Division
** Criminal Investigation Division
** Tax Analytics Division
** Involuntary Compliance Logistics and Operations Support Division
* Assistant Secretary and Chief Information Officer
** IT Systems Development and Support
** Cyber Security
** Networking Services
** Innovation and Continuous Delivery
** Project Management Office
** Technical Architecture
** Cloud Services
* Assistant Secretary for Tax Research & Equity
As of January 2024, the department has 1,309 employees retained under the terms of the State Human Resources Act. The department's headquarters are located at 501 North Wilmington Street in Raleigh. The Excise Office, responsible for enforcing the Motor Fuels Tax, Motor Carrier Tax, Tobacco Products Tax, Privilege License Tax, and Alcoholic Beverages Tax, is housed on Terminal Drive. The department maintains other offices to serve the public in Raleigh, Asheville, Charlotte, Durham, Elizabeth City, Fayetteville, Greensboro, Greenville, Hickory, Rocky Mount, and Wilmington.

## List of secretaries and commissioners

The following secretaries and commissioners have held this position:
| Name | Term | Appointed | Party | Home county | Governor |
| Ronald G. Penny | 2017 to present | April 27, 2017 | Democrat | Wake | Roy Cooper |
| Jeff Epstein | 2016–2017 | January 6, 2016 | Republican | Mecklenburg | Pat McCrory |
| Lyons Gray | 2013–2016 | January 5, 2013 | Republican | Forsyth | Pat McCrory |
| David William Hoyle | 2010–2013 | September 2010 | Democrat | Gaston | Bev Perdue |
| Kenneth Lay | 2009–2010 | | Democrat | | Bev Perdue |
| Regionald S. Hinton | 2007–2009 | | Democrat | | Mike Easley |
| E. Norris Tolson | 2001–2007 | | Democrat | | Mike Easley |
| Muriel K. Offerman | 1996–2001 | | Democrat | | Jim Hunt |
| Janice H. Faulkner | 1993–1996 | | Democrat | | Jim Hunt |
| J. Ward Purrington | 1992–1993 | | Republican | | James G. Martin |
| Betsy Y. Justus | 1990–1992 | | Republican | | James G. Martin |
| Helen Ann Powers | 1985–1990 | | Republican | | James G. Martin |
| Mark G. Lynch | 1977–1985 | | Democrat | | Jim Hunt |
| Mark H. Coble | 1973–1977 | June 8, 1973 | Republican | Guilford | James Holshouser |
| Gilmer Andrew Jones, Jr. | 1972–1973 | December 31, 1971 | Democrat | Wake | Robert W. Scott |
| Ivie L. Clayton | 1966–1971 | July 8, 1966 | Democrat | Wake | Dan K. Moore, Robert W. Scott |
| Ivie L. Clayton | 1965–1965 | January 11, 1966 | Democrat | Wake | Dan K. Moore |
| Lewis Sneed High | 1964–1965 | April 23, 1964 | Democrat | Cumberland | Terry Sanford |
| William A. Johnson | 1961–1964 | January 16, 1961 | Democrat | Harnett | Terry Sanford |
| James S. Currie | 1957–1961 | August 8, 1957 | Democrat | Wake | Luther H. Hodges |
| Eugene G. Shaw | 1949–1957 | April 26, 1949 | Democrat | Guilford | W. Kerr Scott |
| Edwin M. Gill | 1942–1949 | June 2, 1942 | Democrat | Wake | J. Melville Broughton, R. Gregg Cherry |
| Allen J. Maxwell | 1929–1942 | March 18, 1929 | Democrat | Wake | Oliver Max Gardner |
| Rufus A. Doughton | 1923–1929 | January 29, 1923 | Democrat | Alleghany | Cameron A. Morrison |
| Alston Davidson "Aus" Watts | 1921–1923 | May 1, 1921 | Democrat | Iredell | Cameron A. Morrison |
Notes:
* ↑ Ronald G. Penny served as acting Secretary from January 2017 to April 2017 and was appointed Secretary in April of 2017.
* 1 2 Irvie L. Clayton was appointed as acting commissioner by Gov. Moore. He was later reappointed by Gov. Scott on July 21, 1969 until his resignation on December 31, 1971.
* ↑ Lewis Sneed High was appointed by Gov. Sanford to replace William A. Johnson and served until his resignation in January 1965.
* ↑ William A. Johnson was appointed by Gov. Sanford to replace James Currie and served until April 1964.
* ↑ James S. Currie was appointed by Gov. Hodges to replace Eugene Shaw and served until his resignation in January 1961.
* ↑ Eugen G. Shaw was appointed by Gov. Scott to replace Gill and reappointed by Gov. Umstead on June 29, 1953.
* ↑ Edwin M. Gill was initially appointed by Governor Broughton to replace Allen J. Maxwell and reappointed by Governor Cherry on June 14, 1945 until his resignation on July 1, 1949.