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HomeMy WebLinkAboutAgenda - 02-05-2013 - 8aORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: February 5, 2013 Action Agenda Item No. 8 -a SUBJECT: Changes in Taxation for Motor Vehicles DEPARTMENT: Tax Administration PUBLIC HEARING: (Y /N) I No ATTACHMENT(S): Power Point Presentation Informational Flyer INFORMATION CONTACT: Dwane Brinson, Tax Administrator, (919) 245 -2726 PURPOSE: To provide an overview of the upcoming changes to the taxation of registered motor vehicles as stipulated in House Bill 1779, and to inform the Board on the current status of the project. BACKGROUND: In 2005, the North Carolina General Assembly ratified House Bill 1779 to create a combined motor vehicle registration renewal and property tax collection system. The legislation places the responsibility for motor vehicle property tax collection for the State's 100 counties with the Division of Motor Vehicles (DMV). The new combined registration fee and tax collection is known as North Carolina's "Tag & Tax System ". The new process will take effect with vehicle registration renewals that are due in July 2013. By June 2014, all North Carolina vehicles will be enrolled in the system. FINANCIAL IMPACT: None. RECOMMENDATION(S): The Manager recommends that the Board receive the report. NORTH CAROLINA "TAG AND TAX" Dwane Brinson Tax Administrator C Background Mm o General Assembly passed HB 1779 in 2005 Bill was delayed a couple of times, but now is moving forward towards implementation Will take effect with vehicle registration renewals due July, 2013 Current System: "Billing 4 in Arrears" Taxpayer renews vehicle registration through NCDMV, either online, mail or in person Tax office receives monthly file of all new registrants from the preceding month Vehicle property tax bill mailed out by tax office approximately 3 months after registration renewal Vehicle property tax bill due the 4t" month after registration renewal Current System: "Billing 5 in Arrears" c On average, 66% of Registered Motor Vehicle (RMV) bills are paid on time i: In a full fiscal year, vehicle tax collections across are significantly less than annual bills (Figure 1) Figure 7: Fiscal Year Ended June 30, 20 7 7 Collections *Source: LGC Memorandum #2012 -14, 411712012 RMV Annual Orange County 91.16°0 98.98°0 Statewide Average 87.22% 97.91% 100,000+ 88.09% 98.37% 50,000 — 99,999 85.37% 96.96% 25,000 — 49,999 84.01% 96.61% 24,999 and Below 1 84.08% 95.23% *Source: LGC Memorandum #2012 -14, 411712012 New System "Tag and Tax" project ❑ Combines vehicle property tax notice and payment with the vehicle registration process ❑ Invitation to renew Registration fee and vehicle tax notice sent in advance ❑ Taxpayers must pay vehicle property tax as vehicle registration fee Must be paid in full at same time New System Mm V 7 i: Assessor determines value, situs, and taxable status of the vehicle in advance — not in arrears i: File is "delivered" to DMV to prepare the invitations to renew the registration Taxes must be paid in order to obtain the registration — no partial payments will be allowed u Configuration M■ ❑ Vehicle Tax System (VTS) will be a separate system housed by the NC Department of Revenue ❑ NCDMV responsible for titles and registrations ❑ NCDOR responsible for tax administration of vehicles 9 Project Goals Mm ❑ To improve the citizen's experience Reduce the number of government interactions Eliminate the need for delinquent vehicle collections c Reduce /share costs Duplicate mailings (postage, materials, handling, etc.) i: Increase efficiency of an existing tax Improve collections and revenues Improved compliance 10 Implementation MW T W V c Counties work first files in the new VTS April, 2013 Combined notices in mailboxes by June 1, 2013 Old and new system will overlap for four months Change in due date Counties to work files in two systems for five months 11 Renewals MW Assessor will situs and assess vehicles in VTS VTS will send amount of taxes due to STARS system DMV will mail and collect Due date will be 15th of the month Valuation appeal must be made within 30 days of due date Real time 12 How Project Was Paid For MM T Project costs were paid through the Special Fund administered by the State Treasurer 3% additional interest on delinquent bills Q All taxing jurisdictions on the combined notice would bear their share of costs based upon each unit's contribution to the total amount of the notice a An effective cost comparison should prorate costs among jurisdictions 13 Public Outreach Provided tri -fold insert with annual listing forms Notices being mailed with each RMV monthly mailing Information announcement on county digital monitors Press release through Public Information Office Educational video with PIO available 24/7 on website and YouTube Presentation to BOCC 14 Contact Information: Dwane Brinson Orange County Tax Administrator dbrinson @orangecountync.gov 919- 245 -2726 The new Tag & Tax System makes it easier to manage your vehicle registration and taxes One payment - made either in person, online or by mail ... Completes the annual tag and tax payments for your vehicle. Now, your annual vehicle inspection, registration renewal and property tax are all due the same month each year. Learn more about North Carolina's new Tag & Tax System by reading the FAQs in this brochure, or calling the Orange County Tax Office at (919) 245 -2725. En Espanol: www.co.orange.nc.us/revenue/ registered_motor _ vehicles.asp 15 About North Carolina's New Tag &Tax System The North Carolina General Assembly passed a new law to create a combined motor vehicle registration renewal and property tax collection system (Tag & Tax System). In doing so, the new law transfers the responsibility for motor vehicle tax collection from the 100 counties across North Carolina to the Division of Motor Vehicles (DMV). North Carolina's new Tag & Tax System has been designed as a convenient way to pay annual vehicle tag renewals and vehicle property taxes. If your address is current with the N.C. Division of Motor Vehicles, you will receive a Tag & Tax Notice listing both vehicle registration fees and taxes due. Just as in the past, vehicle owners will receive the notice about 60 days prior to their vehicle's registration expiration. 4 17 � 52 FAQs Q. Why is the state's collection of vehicle property taxes changing? In 2005, the North Carolina General Assembly ratified House Bill 1779 to create a combined motor vehicle registration renewal and property tax collection system. The legislation places the responsibility for motor vehicle property tax collection for the state's 100 counties with the Division of Motor Vehicles (DMV). The new combined registration fee and tax collection has become North Carolina's new ''Tag & Tax System.'' Q. When does the new Tag & Tax System take eff ect? The new system is scheduled to be phased into effect with vehicle registration renewals that are due in July 2013. By June 2014, all North Carolina vehicles will be enrolled in the system. Q. Why has my registration renewal form changed? The new form combines information about your vehicle registration renewal fee and your vehicle property tax due. The new Tag & Tax System allows you to make one payment for both registration renewal and vehicle property tax. Q. Will my vehicle registration renewal fee remain the same? Yes. Vehicle registration renewal fees will remain the same annual cost. The only increase in your bill will reflect the vehicle property tax amount. Q. When is my vehicle tax due? Your vehicle tax will be due at the same time you renew your vehicle. North Carolina law requires that your vehicle property tax be paid in order to renew the vehicle registration. The due date will be printed on the new combined notice that you receive in the mail. Q. Can I renew my vehicle registration if I do not pay my property tax first? No. You cannot renew your vehicle's registration, whether it is leased or owned, unless the total taxes and registration fees on the vehicle are paid. Q. Am I paying vehicle property taxes for the coming year, or for the preceding year? Taxes due on this notice are for the coming year, covering the same period as the vehicle registration. Q. What if I lease my vehicle? Do I need to pay my property taxes to the leasing company? No. Vehicle property taxes on leased motor vehicles must be paid in full at the time of renewal. A copy of the combined tag and tax notice is not sent to the leasing company. Q. Is interest charged on late payments? Yes. State law requires that interest be charged on late vehicle property tax payments and on late registration renewals. Q. How will I know what vehicle property tax I owe? Your property tax will be included on the new combined notice with your county and municipality tax rates and other applicable taxes due. ARML 16 Q. Will I receive a tax refund if I transfer my license plate to another vehicle during the year? No. If you have paid your vehicle property tax for the year and then transfer the license plate to another vehicle, you will not be eligible for a refund of the taxes paid. The registered motor vehicle to which the plates are transferred will not be taxed until its current registration is renewed. Q. When can I apply for a refund of vehicle property taxes paid? An owner can apply for a refund of taxes paid when a motor vehicle is sold or registered out of state. The refund will be calculated on any full calendar months remaining in the registration period after the license plate is surrendered to the N.C. Division of Motor Vehicles. Within one year of surrendering the license plates, the owner must present the following to the county tax office: (1) Proof of plate surrender to N.C. DMV (DMV Form FS20); and (2) Copy of the Bill of Sale or the new state's registration. Q. Should I pay vehicle property tax if I am active duty military? Active duty non - resident military personnel may be exempt from North Carolina motor vehicle property tax. To qualify for an exemption, you must present a copy of your Leave & Earnings Statement to the county tax office. The statement should be for the month and year in which you register the vehicle and must include your Estimated Time of Separation (ETS) date and home of record. Spouses and /or dependents are not exempt unless they are active duty military non - residents. Questions? Please Contact Us Orange County Tax Administration 228 South Churton Street Suite 200 Hillsborough, NC 27278 Phone: (919) 245 -2725 Option #2 Web: http: / /www.co.orange.nc.us DRAFT INFORMATION ITEM Date Prepared: 01/28/13 Date Revised: 01/29/13 BOCC Meeting Follow -up Actions (Individuals with a * by their name are the lead facilitators for the uouD of individuals responsible for an item) Meeting Task Target Person(s) Status Date Date Responsible 1/24/13 Review and consider request by Commissioner Pelissier that 2/5/2013 Chair /Vice DONE the Chair establish a practice of sending letters to all Chair/Manager Chair to send letters to all advisory board members whose service expires, thanking advisory board members whose them for their service service expires 1/24/13 Review and consider request by Commissioner Pelissier that 2/5/2013 Chair /Vice DONE the Board move forward with establishing a new and Chair/Manager Chair to consult with County different thorough application form /process for prospective Attorney regarding request and appointees for four boards and boards with fiduciary possible development of new responsibilities application for identified boards 1/24/13 Provide assistance as necessary to NCDOT to move the 3/7/2013 Tom Altieri Staff to provide assistance for draft Comprehensive Transportation Plan forward for Craig Benedict OUTBoard consideration and consideration by the OUTBoard for a recommendation and bringing Plan back to March 7th bring it back to the BOCC at the March 7, 2013 regular meeting meeting 1/24/13 Move forward with pursuing architect, agreements with 5/1/2013 Michael Talbert, Efforts to move forward Habitat for Humanity and RENA, permitting through the Jeff Thompson, Town of Chapel Hill, and all other aspects related to & Frank Clifton construction of the Rogers Road Community Center INFORMATION ITEM Tax Collector's Report - Numerical Analysis Effective Date of Report: Tax Year 2012 Amount Charged in FY 12 - 13 Amount Collected Accounts Receivable* ,• •Budget ,• , Current Year Taxes WIN ". M11 $ 7,413,830.20 Prior Year Taxes $ 994,130.00 $ (206,641.30) -------------------------------------------------------------------------------------- ....................................................................................... ........................................................ ........................................................ ............................... ............................... --------------------------------- Tax Year 2011 Amount Charged in FY 11 - 12 - - - - -- Amount Collected Accounts Receivable ----------------------------------- ,• •Budget ,• , ........................................................ ........................................................ ............................... ............................... Current Year Overall Collection Percentage Tax Year 2012 .... ............................... Current Year Overall Collection Percentage Tax Year 2011 ..... ............................... *Accounts Receivable will increase throughout the fiscal year due to discoveries, audits and remaining billings for registered motor vehicles.