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HomeMy WebLinkAboutAgenda - 10-01-2024; 8-b - Motor Vehicle Property Tax Releases Refunds 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: October 1, 2024 Action Agenda Item No. 8-b SUBJECT: Motor Vehicle Property Tax Releases/Refunds DEPARTMENT: Tax Administration ATTACHMENT(S): INFORMATION CONTACT: Resolution Nancy Freeman, Tax Administrator, Release/Refund Data Spreadsheet (919) 245-2735 Reason for Adjustment Summary PURPOSE: To consider adoption of a resolution to release motor vehicle property tax values for five (5) taxpayers with a total of five (5) bills that will result in a reduction of revenue. BACKGROUND: North Carolina General Statute (NCGS) 105-381(a)(1) allows a taxpayer to assert a valid defense to the enforcement of the collection of a tax assessed upon his/her property under three sets of circumstances: (a) "a tax imposed through clerical error", for example, when there is an actual error in mathematical calculation; (b) "an illegal tax", such as when the vehicle should have been billed in another county, an incorrect name was used, or an incorrect rate code (the wrong combination of applicable county, municipal, fire district, etc. tax rate(s) was used; (c) "a tax levied for an illegal purpose", which would involve charging a tax which was later deemed to be impermissible under state law. NCGS 105-381(b), "Action of Governing Body" provides that "Upon receiving a taxpayer's written statement of defense and request for release or refund, the governing body of the taxing unit shall, within 90 days after receipt of such a request, determine whether the taxpayer has a valid defense to the tax imposed or any part thereof and shall either release or refund that portion of the amount that is determined to be in excess of the correct liability or notify the taxpayer in writing that no release or refund will be made". For classified motor vehicles, NCGS 105-330.2(b) allows for a full or partial refund when a tax has been paid and a pending appeal for valuation reduction due to excessive mileage, vehicle damage, etc. is decided in the owner's favor. FINANCIAL IMPACT: Approval of these release/refund requests will result in a net reduction of $3,913.89 in revenue to Orange County, municipalities, and special districts. Financial impact year to date for FY 2024-2025 is $6,253.06. The Tax Assessor recognized that refunds could impact the budget and accounted for these in the annual budget projections. 2 ALIGNMENT WITH STRATEGIC PLAN: There are no Orange County Strategic Plan Goals applicable to this item. RECOMMENDATION(S): The Manager recommends that the Board approve the attached resolution approving these property tax release/refund requests in accordance with North Carolina General Statute 105-381. 3 NORTH CAROLINA RES-2024-052 ORANGE COUNTY REFUND/RELEASE RESOLUTION(Approval) Whereas,North Carolina General Statutes 105-381 and/or 330.2(b)allows for the refund and/or release of taxes when the Board of County Commissioners determines that a taxpayer applying for the release/refund has a valid defense to the tax imposed;and Whereas,the properties listed in each of the attached"Request for Property Tax Refund/Release" has been taxed and the tax has not been collected: and Whereas,as to each of the properties listed in the Request for Property Tax Refund/Release,the taxpayer has timely applied in writing for a refund or release of the tax imposed and has presented a valid defense to the tax imposed as indicated on the Request for Property Tax Refund/Release. NOW,THEREFORE,IT IS RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF ORANGE COUNTY THAT the recommended property tax refund(s)and release(s)are approved. Upon motion duly made and seconded,the foregoing resolution was passed by the following votes: Ayes: Commissioners Noes: I,Laura Jensen,Clerk to the Board of Commissioners for the County of Orange,North Carolina, DO HEREBY CERTIFY that the foregoing has been carefully copied from the recorded minutes of the Board of Commissioners for said County at a business meeting of said Board held on ,said record having been made in the Minute Book of the minutes of said Board, and is a true copy of so much of said proceedings of said Board as relates in any way to the passage of the resolution described in said proceedings. WITNESS my hand and the corporate seal of said County,this day of 2024 Clerk to the Board of Commissioners 4 BOCC REPORT - REGISTERED MOTOR VEHICLES OCTOBER 1, 2024 ACCOUNT BILLING ORIGINAL I ADJUSTE FINANCIA NAME NUMBER YEAR VALUE D VALUE L IMPACT REASON FOR ADJUSTMENT ADDITIONAL EXPLANATION Campos, Hector 70124617 2022 40,426 0 (684.33) County changed to Durham (illegal tax) Cohen, Michael 67938858 2023 51,190 25,507 (235.77) Value adjustment(appraisal appeal) Mar Realty Corp 79858147 2024 34,480 34,480 (267.05) *Situs error(illegal tax) McCausland, John 79632654 2024 121,570 0 (2,054.51) County changed to Chatham (illegal tax) Ruchlis, Michael 79541400 2024 34,510 0 (672.23) County changed to Chatham (illegal tax) (3,913.89) TOTAL Adjustment Descriptions Clerical error G.S. 105-381(a)(1)(a):e.g. when there is an actual error in mathematical calculation. Illegal tax G.S. 105-381(a)(1)(b):e.g. when the vehicle should have been billed in another county, an incorrect name was used, or an incorrect rate code was Tax levied for an illegal purpose G.S. 105-381(a)(1)(c):e.g. charging a tax that was later deemed to be impermissible under State law Appraisal appeal G.S. 105-330.2(b):e.g. reduction in value due to excessive mileage or vehicle damage *Situs error:An incorrect rate code was used to calculate bill. Value remains constant but bill amount changes due to the change in specific tax rates applied to Classification GS 105-330-9(b):e.g.Antique automobiles are designated a special class of property under the NC Constitution The spreadsheet represents the financial impact that approval of the requested release or refund would have on the principal amount of taxes. Approval of the release or refund of the principal tax amount also constitutes approval of the release or refund of all associated interest, penalties, fees, and costs appurtenant to the released or refunded principal tax amount. August 17, 2024 thru September 13, 2024 5 Military Leave and Earning Statement (LES): Is a document given on a monthly basis to members of the United States military which reports their pay, home of record and service status. The LES is required when applying for exemption from Motor Vehicle Property Taxes. Active duty, non-resident military personnel may be exempt from North Carolina motor vehicle property tax as allowed by United States Code, Title 50, Service members' Civil Relief Act of 1940. (Amended in 2009 by The Military Spouse's Residency Relief Act) Titles and Brands: Section 1, Chapter 7 NCDMV Title Manual 10 Edition Revised January 2016 Title: Document that records the ownership of vehicles and the liens against them. Custom-Built: A vehicle that is completely reconstructed or assembled from new or used parts. Will be branded"Specially Constructed Vehicle" Flood Vehicles: A motor vehicle that has been submerged or practically submerged in water to the extent that damage to the body, engine, transmission or differential has occurred. Reconstructed Vehicles: A motor vehicle required to be registered that has been materially altered from original construction due to the removal addition or substitution of essential parts. Salvaged Motor Vehicles: Is a vehicle that has been damaged by collision or other occurrence to the extent that the cost of repairs exceeds 75% of fair market value, whether or not the motor vehicle has been declared a total loss by an insurer. Repairs shall include the cost of parts and labor, or a vehicle for which an insurance company has paid a claim that exceeds 75% of the Fair Market Value. If the salvaged vehicle is six model years old or newer, an Anti-Theft Inspection by the License and Theft Bureau is required. Salvage Rebuilt Vehicle: A salvaged vehicle that has been rebuilt for title and registration. Junk Vehicle: A motor vehicle which is incapable of operation or use upon the highways and has no resale value except as scrap or parts. The vehicle shall not be titled. Antique Vehicle: A motor vehicle manufactured in 1980 and prior Commercial Trucking (IRP): The International Registration Plan is a registration reciprocity agreement among jurisdictions in the US and Canada which provides for payment of license fee on the basis of fleet miles operated in various jurisdictions. Total Loss: Repairs were more than the market value of the vehicle and the insurance company is unwilling to pay for the repairs. Total Loss/Rebuilt: Whatever the repairs were to make the vehicle road worthy after a Total Loss status has been given. Vehicle must be 5 years old or older. Vehicle status then remains as salvaged or rebuilt. Certificate of Destruction: NC DMV will not register this type of vehicle. It is not fit for North Carolina roads.