Bill to repeal law linking property tax, license tags dies in North Carolina

| 8/7/2006

An effort has died in North Carolina to nip in the bud a new law requiring vehicle owners to pay their property taxes and license tag renewals at the same time.

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.

It faced opposition during this year's legislative session because of how it affects car and truck dealers and the potential cost to combine computer systems, the Winston-Salem Journal reported. However, the measure that would have repealed the law before it takes effect in 2009 was awaiting consideration in the House July 28 when the session ended, effectively killing it for the year.

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 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.

Cole's bill – HB2461 – would have given vehicle buyers a 90-day respite before the property tax is due.

The earliest the override effort could come back up for consideration would be in January.