Local Government Act 1974

Local authorities fuel tax - Application of proceeds of tax

198: Distribution of proceeds

You could also call this:

"How local councils share the money they collect from taxes and rates"

Illustration for Local Government Act 1974

When tax money is collected in an area, it gets shared among the local councils. You get a share based on how much money you collected from rates the year before. The amount of money you collected from rates is called your rate revenue. This means all the money from rates, charges, and fees that the council collected on its own. If you are a local council, any money you get from this sharing will go into your general fund.

You can be part of more than one tax area if you are a region or district. The money that local councils get from tax sharing is used for general purposes. The way the tax money is shared is decided by a distribution authority, which is in charge of dividing the money among the local councils.

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This page was last updated on 10 September 2025

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM419409.

Topics:

Government and voting > Local councilsMoney and consumer rights > Taxes

197: Transfer by distribution authority of authorised cost of services, or

"Councils can move fuel tax money to their main account to cover costs, with the Auditor-General making final decisions if there's a dispute."

199: Effect on agreements of imposition or alteration of tax, or

"How tax changes affect agreements to sell fuel"

Part 11Local authorities fuel tax
Application of proceeds of tax

198Distribution of proceeds

Subject to this Part, the proceeds of the tax in a tax area in any year shall be distributed by the distribution authority among the component authorities of the tax area (including the distribution authority) according to the proportion which the total rate revenue of each such component authority for the immediately preceding financial year bears to the total rate revenue of all the component authorities for that preceding financial year.
For the purposes of this section, the expression rate revenue, in relation to any component authority, means all rates, and all charges and fees deemed under any enactment to be rates made and levied by that component authority on its own behalf.
Nothing in this section shall be deemed to prevent a region or district forming part of 2 or more tax areas.
Any money paid to any component authority under this section shall form part of the general revenues of that component authority.

Notes

Section 198: replaced, on 16 December 1989, by section 24(1) of the Local Government Reform (Transitional Provisions) Act 1990 (1990 No 27).
Section 198(2): replaced, on 1 July 1992, by section 23 of the Local Government Amendment Act 1992 (1992 No 42).