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 of motor vehicle tax collection from the 100 counties across the state to the N.C. Division of Motor Vehicles (NCDMV). North Carolinaís new Tag & Tax System has been designed as a convenient way to pay annual vehicle tag renewals and property taxes.
Currently, vehicle registration and property taxes are processed separately. First, you receive and pay your vehicle registration and then three (3) months later, you receive notice and pay your tax. This occurs separately because the counties are responsible for managing vehicle taxes and the DMV is responsible for managing vehicle registration.
The new system is scheduled to be phased in with vehicle registration renewals mailed in May 2013 (DELAYED UNTIL JULY 2013) and due in July 2013 (DELAYED UNTIL SEPTEMBER 2013). By August 2014, all North Carolina vehicles will be enrolled in the system. The NCDMV will send a new combined notice that includes both the vehicle registration fee and property taxes, which will be due at the time of renewal. You will not be permitted to renew your tag without paying all taxes owed on the vehicle.
FREQUENTLY ASKED QUESTIONS
Q. How will my registration renewal form change?
The new form combines information about your vehicle registration renewal fee and your vehicle property taxes. 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. The cost of your annual vehicle registration renewal will remain the same. The notice will increase to reflect your vehicle property tax amount.
Q. When is my vehicle tax due?
Your vehicle tax will be due at the same time you renew your registration. 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?
No. You cannot renew your vehicleís 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 the notice are for the coming year and cover 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 the amount of vehicle property tax that I owe?
Your property tax amount will be included on the new combined notice along with your county and municipality tax rates.
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 NCDMV (DMV Form FS20); and (2) Copy of the notarized Bill of Sale or the new stateís registration.
Q. Will I have to 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 (LES) 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. Military spouses may also qualify for exemption if their home of record is the same as the service memberís. In addition to providing a copy of the LES as described above, spouses must provide a copy of their military I.D. card and a copy of their out of state driverís license, voter registration card or most current state tax return.