New rules poised to take effect for registration, vehicle taxes
By Steve Herring
Published in News on August 28, 2013 1:46 PM
Mary Elizabeth West tightens a screw that will hold the license plate on her mother's car outside of the Division of Motor Vehicles office on William Street Tuesday afternoon. A new state law effective Monday requires that vehicle property taxes be paid at the same time that vehicle owners renew their registration.
Wayne County could gain several million dollars in tax revenue as the result of a new state law requiring that vehicle property taxes be paid at the same time someone renews a vehicle's registration.
Beginning Monday, the new Tag & Tax Together program requires that a vehicle owner pay the tag renewal and tax payment together, and in full, in order to renew the vehicle registration.
The requirement remains that the vehicle also has to pass a safety inspection before the registration is issued.
The Tag & Tax Together program applies to vehicle property tax only and does not affect a person's mortgage or home property tax.
People who do not pay the taxes and registration fee in a timely manner will be charged interest of 5 percent on both. Another three-fourth of a percent will be added on the first of each following month.
After receiving the entire payment, the state Division of Motor Vehicles will renew the vehicle registration and forward the property tax portion of the payment directly to the county tax office.
The combined bill may be paid at the local license plate agency, online or by mail.
A person's annual vehicle registration renewal fees will remain the same. The increase in the bill is from the addition of the vehicle property tax.
The due date will be printed on the renewal notice that people will receive in the mail.
Combined payments will also be due on vehicles purchased on or after Sept. 1, unless the owner elects not to pay the property tax at the point of sale.
In that case, the owner will receive a limited registration plate that expires 60 days after the vehicle is titled. The DMV will send a reminder notice to the owner stating the amount of property tax due.
For leased vehicles, the person purchasing the license plate will receive the combined bill. Leasing companies will need to make arrangements with their lessee as to how they want to collect fees and taxes.
Statewide, approximately 67 percent of vehicle tax bills are paid before they become delinquent, increasing to 82 to 83 percent by the end of the year, Wayne County Tax Administrator David Ward said.
The average is about the same in Wayne County, he said.
"It is a pretty low number," Ward said. "As you go through the cycle more are paid, but the percentage is not what the annual (property tax) bills are. We think it is a step in the right direction. Obviously, the collections should be much better (with the new system)."
The county's vehicle tax collection rate compares to the 87 to 88 percent of the annual property tax bills that are paid prior to becoming delinquent, Ward said.
By the end of the fiscal year on June 30, the county property tax collection rate is 97 percent or better.
On an annual basis, vehicle taxes generate about $6.5 million for the county, and the change could create millions in additional revenue, Ward said.
The September renewals were mailed in July and some people have already paid, he said.
Vehicle owners with a "9" (for the month of September) sticker on their license tag are due to pay the combined bill in September.
With each month that passes, additional vehicle owners will receive the new notice when their renewal is due. By mid-2014, the program should include all of the state's vehicle owners.
Previously, people paid the vehicle registration and taxes separately.
Since about 1993 people have received their tax bills approximately 90 days after renewing their tags or purchasing a new vehicle.
If the taxes were not paid by the deadline, the county would place a block on the tags so that they could not be renewed until the taxes were paid.
Along with improving tax collections, the new program also provides a one-stop shop for people to be able to renew the registration, and pay the taxes at the same time, Ward said.
An illustration of the combined notice is posted at www.ncdot.gov/download/dmv/Tag_Tax_Together_Bubbles.pdf.
To figure out the projected total of a new bill, people can visit the Tag and Tax estimator at https://edmv.ncdot.gov/TaxEstimator.