North Carolina bill would repeal law linking property tax, license tags

| 7/19/2006

A new law in North Carolina requiring vehicle owners to pay their property taxes and license tag renewals at the same time would be nixed before it ever takes effect under an effort in the statehouse.

The law was the result of legislation offered by Rep. Dale Folwell, R-Forsyth, to combine the two annual expenses for cars and trucks into one process. It received unanimous support in the House and Senate during the 2005 session.

Now it’s facing opposition because of how it affects car and truck dealers and the potential cost to combine computer systems, the Winston-Salem Journal reported. A measure approved July 11 by the House Rules Committee this month would repeal the law before it takes effect in 2009.

The law is intended to cut down on delinquent tax payments and help cities and counties collect about $80 million a year in taxes that go unpaid.

It requires the Division of Motor Vehicles and the North Carolina Department of Revenue to develop an integrated computer system so that vehicle property-tax bills and registration-renewal forms could be mailed out together.

Cities and counties also would save $8 million a year by reducing the number of past-due notices sent out.

However, car and truck dealers say that people who buy vehicles and then immediately title them would have to pay local property tax at the same time, rather than waiting up to a year as the current law allows, the Journal reported.

Folwell said that dealers are exaggerating the effect of collecting the tax but that didn’t stop Rep. Nelson Cole, D-Rockingham, from pushing an effort to repeal the law.

Cole said his biggest concern is the initial cost of $20 million to implement the rule, plus $18 million annually for equipment and staff.

The effort is awaiting consideration on the House floor. If approved, it would head to the Senate.