Tax collector fears repeal of new system for vehicle taxes

Feb. 03, 2013 @ 09:42 PM

 

DURHAM – The county’s chief tax collector wants County Commissioners to fight any move by the state to backtrack on a 2005 plan to tightly couple vehicle registrations and the payment of vehicle-related property taxes.

The program is on the verge of implementation and abandoning it now would mean writing off the money that’s been spent on software and other preparations, Kim Simpson told County Commissioners Friday.

It also would mean abandoning an initiative that promises to improve the collection rate for taxes on cars and trucks, which in Durham lags well behind the collection rate for levies on real property, she said.

The program, approved in 2005 by the General Assembly, would require owners to pay local property taxes on a vehicle at the same time they renew its registration.

The N.C. Division of Motor Vehicles would collect the combined check and relay the tax payment to the vehicle’s home county.

“Citizens are ready for this to take place,” Simpson said. “And it’s a smart thing for local and state government to work together for it to occur.”

The law was supposed to go into effect for fiscal 2009-10, but legislators gave DMV and the state Department of Revenue permission to delay the launch until they had “an integrated computer system” that could manage the collection effort.

The agencies put that discretion to use, as it’s taken a while to get the system up and running. But they think it’s ready now, and the combined-payment requirement is supposed to go into effect on July.

That’s unless the General Assembly changes its mind, and four legislators have proposed it do just that.

On Wednesday, state Reps. Edgar Starnes of Surry County and Sarah Stevens of Caldwell, both Republicans, filed a bill that would repeal the program. Reps. Harry Warren and Carl Ford, both R-Rowan, signed on as co-sponsors.

Starnes and Stevens represent two counties that have long opposed the measure. Simpson speculated that possibly impact on the counties’ revenue flows or hometown businesses accounted for the opposition.

Vehicle registration and tax payments are now an entirely separate matter, with DMV and its contractors responsible only for collecting the actual registration fee. Counties have been responsible for collecting all property taxes, including those on cars and trucks.

Simpson’s office usually manages to collect about 99 percent of the taxes due on real estate and personal property, but in fiscal 2011-12 it made good on only 90 percent of its vehicle-related billings.

And over time it’s become harder, not easier, to convince people to pay up.

As of Jan. 31 – seven full months into fiscal 2012-13 – the Durham tax office had collected a bit under 72 percent of what vehicle owners owe.

That’s down from 73 percent on the same date in 2012 and 74 percent in 2011.

Real-property collections hovered at 96 percent on Jan. 31, consistent with their showing in 2012 and a percentage point better than Durham officials had managed at that point in 2011.

N.C. Association of County Commissioners staffers said Friday their group is also keen to head off the Starns/Stevens bill.

Its chief lobbyist, Johanna Reese, told Durham commissioners the computer system the state needed to implement combined payments cost it “several million” dollars and by contract will have to be paid for whether or not it’s put to use.