Types of Property To Be Taxed
The three main elements of the property tax system in North Carolina are real property, personal property, and motor vehicles. Real property consists of land and buildings. Personal property consists of, for this guide, tangible personal property or all personal property that is not intangible and is not permanently affixed to real property. Motor vehicles, if registered, are assessed according to its registration renewal date.
The Machinery Act (General Statute 105, Subchapter II) provides the framework for the listing, assessing, and appraising of both real and personal property in North Carolina. Under G. S. 105-286, all counties are required to conduct a reappraisal at least every eight (8) years. The majority of the counties conduct their reappraisals on this time frame, although a growing segment of counties conducts reappraisals on a four-year cycle. During each year at least 11 of the 100 counties are conducting a county wide reappraisal. A county may choose to conduct its reappraisal "in-house" utilizing their own appraisal staff, by hiring an outside reappraisal firm, or by employing consultants to assist their staff appraisers.
During the years that a general reappraisal is not made in the county, G. S. 105-287 is the operative statute for changing any property values in the county. The assessor is limited to certain circumstances in which he may change the value of real property. These include correcting a clerical or mathematical error, or correcting an appraisal which resulted from a misapplication of the schedules used during the county's last general reappraisal. Also, the assessor may increase or decrease the appraised value of real property, to recognize a change in value caused by factors other than the following: normal physical depreciation of the improvements, economic conditions affecting the county as a whole, or minor improvements to the property such as repainting, landscaping, terracing etc.
All taxable personal property in North Carolina is appraised at its true value in money. The two main exceptions are inventories owned by manufacturers, retailers, wholesalers, and contractors as well as non-business personal property. These types of personal property have been exempted by statute in North Carolina. There are other exemptions for different types of personal property where the ownership and use determine the exempt status. These would have to be looked at on an individual basis. Personal property in North Carolina is appraised each year as of January 1 at its true value in money. The personal property owner should list his or her personal property with the correct county during the regular listing period in January. Extensions for listing personal property may be granted by the County Assessor up to April 15 upon a timely request. The request for extension to list must be made before the end of the regular listing period.
The counties in North Carolina use a trending method to appraise personal property. Counties request taxpayers to list their property at original cost by year of acquisition. The counties then trend the original cost up to reach current replacement cost new and then apply a straight line depreciation schedule to reach market value. Most of the counties use trending schedules developed by the North Carolina Department of Revenue.
The appraised value of any personal property may be appealed to the local county board and then to the North Carolina Property Tax Commission.
A change in the law dealing with the taxation of motor vehicles went into effect January 1, 1993. Basically, the new statute changed the way property tax is collected on registered motor vehicles. These vehicles (cars, trucks, trailers, motorcycles, and similar property) will no longer have to be listed in January. Unregistered (untagged) motor vehicles must still be listed annually in January and will be billed with other personal property.
When you receive your vehicle registration renewal card from the Division of Motor Vehicles, please make sure your address and county are correct. If the address and county are not correct, DMV must be notified so you are taxed by the proper county and municipality. About three months after your registration renewal, or a new registration application, you will receive a bill which is payable on the first day of the following month. For example, if you have a March renewal, you will receive a bill in June, it will be due on July 1, and it must be paid by July 31 to avoid the addition of interest. You will receive a separate tax bill on each registered vehicle you own.
If taxes are not paid on time, the county tax collector will issue a block on the registration. If a vehicle receives a block, the registration cannot be renewed again until the taxes plus interest have been paid. Registration can only be renewed on a blocked vehicle after a paid tax receipt has been presented to DMV.
To insure the assessment and registration functions run smoothly, we suggest you follow these instructions:
- Notify DMV of any address changes.
- Register your vehicle on time.
- Pay your taxes on time.
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