Vehicle property tax bill will soon be wrapped in with tag registration
In an effort to extinguish delinquent vehicle taxes, the North Carolina General Assembly passed a law that will combine vehicle property tax and car registration into one bill.
When it goes into effect, drivers can’t get their tags renewed until they’ve also paid their vehicle property taxes.
This year and in past years, N.C. residents have received two separate bills — one from the Department of Motor Vehicles for their registration tags and another from the county for vehicle property taxes.
They usually came at different times of year since car registration wasn’t necessarily in sync with vehicle taxes. But not anymore.
“It all has to be paid at the same time you renew your tag,” said David Francis, the Haywood County tax administrator.
Francis informed the Haywood County Board of Commissioners at its meeting Monday about the new process, which will allow the DMV to collect counties’ personal property taxes. The state agency would them distribute the taxes back to the counties.
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Starting next year, Haywood County residents will simply receive a single bill for both their vehicle property tax and vehicle renewal.
If someone does not pay the whole of the vehicle property tax bill, the DMV will not allow the person to renew his or her vehicle tags. And, those who have neglected to pay their personal property taxes in the past will have to pay those as well before they receive their tags.
“They are going to get a double whammy,” said Commissioner Mike Sorrells.
Sorrells asked if the new procedure would offer any leniency for people who can’t pay the bill all at once.
Francis said that the tax office will work to make sure delinquent payers know that they will have to foot the bills all at once so they could opt to pay the late amount before the next bill comes. Otherwise, if they can’t afford the entire amount owed, they are “stuck,” Francis said.
In any state, drivers must renew their vehicles’ tags each year. Those caught driving with expired tags in North Carolina face a fine.
A big reason for the change is to curb delinquent tax payments.
Haywood County’s tax collection rate for personal property — which includes cars, boats, RVs and the like — was only 85 percent last fiscal year. It is far lower than the property tax collection rate on real estate — such as homes, land and buildings — which was almost 97 percent.
That’s common for any county. Real estate always has much higher collection rate than vehicle taxes, primarily because real estate doesn’t move around like cars and thus it is easier to track down the owner, and the risk of not paying can include a lien against the property.
Jackson County’s vehicle tax collection rate is 87 percent, compared to 96 percent on real estate taxes. Jackson County had $92,188 in delinquent vehicle taxes last year.
By tying vehicle taxes to registration, the change could be lucrative for the counties, particularly in the first year, when counties stand to collect the previous year’s back vehicle taxes plus significantly increase its collection rate going forward. Haywood last year had about $359,000 in unpaid vehicle taxes and other personal property. The county could reclaim most of that lost money, plus collect back years taxes — a potential windfall of several hundred thousand dollars the first year it goes into effect.
Low interest rates spur Haywood County to jump on the refinance train
Haywood County will save more money annually than it originally projected after refinancing debt from previous construction projects.
County Finance Director Julie Davis told the board of commissioners in September that Haywood County could save between $35,000 to $45,000 a year in loan payments if it refinanced around $6.6 million in outstanding debt from past construction projects. However, once the final numbers came in, Haywood County will actually save $57,000 annually, Davis reported to the commissioners at a meeting Monday.
“We were very lucky,” Davis said.
Haywood County has $71.1 million total in outstanding debt, a cumulative total from 14 different past projects over the past decade or longer, including the justice center, the historic courthouse renovations, the new Department of Social Services building and numerous schools. Its interest rates range from as low 1.69 percent to as high as 5 percent.
Of that debt, the county decided to refinance $6.6 million, which will come due in 2025. The county will pay First Southwest, a Charlotte-based financial advisory firm, $15,000 for handling the refinancing.
How much the county pays each year toward debt varies, but now, it shells out about $9.4 million yearly.
— By Caitlin Bowling
