Car tag renewal to mean tax, too
By Steve Herring
Published in News on April 29, 2013 1:46 PM
Implementation of the state Division of Motor Vehicles' new Tag & Tax Together program, which requires one payment for both the registration renewal fee and local vehicle property tax, has been delayed by two months.
The change was scheduled to begin with July registration renewals, but will now begin in September instead. September renewal notices are expected to be in the mail by mid-July.
Wayne County Tax Administrator David Ward said he was notified late Friday of the delay.
According to the DMV announcement, there are more than 600 car dealerships in the state that rely on online services to title and to register the vehicles they sell. The delay is to provide extra time to certify that the online software will work with the new program's software.
Vehicles must continue to pass a safety and/or emissions inspection before a renewal is issued. The inspection can be done as many as 90 days prior to the renewal due date.
Theoretically, the change should result in a 100 percent vehicle tax collection rate, freeing tax office staff from spending their time trying to track down the delinquent bills, county tax officials said. It should also cut down on postage.
Traditionally, Wayne County has been able to maintain a collection rate of 97 percent or better on annual property tax bills. However, for vehicle taxes, the rate is about 68 percent to 70 percent before becoming delinquent.
In any given year, the county collects an estimated $4.4 million in county vehicle taxes, while another $900,000 is delinquent.
Under the old system, the DMV sent out the registration notice followed about three months later by a tax bill from the county. That tax will now be collected by the state and forwarded to the county.
"The period you are paying for is the same -- from the time it is renewed until the time it expires," said Alan Lumpkin, Wayne County assistant tax administrator. "It is just shifting (the payment date), but it covers the same time frame."
However, failure to pay on time carries an interest of 5 percent for the first month and three-fourths of a percent for each following month for both the property tax due as well as the registration fee.
The interest begins on the first day after the tags expire, Ward said. For example, those who have to renew in September actually have until Oct. 15 to do so, with the interest beginning Oct. 16, he said.
Also, anyone who fails to renew the registration could be cited for having an expired registration.
Vehicle owners can determine the month their tags should be renewed by looking at the sticker on their license tag. For instance, if the number is a 9 (for September, the ninth month), they will be the first affected by the new system.
With each passing month additional vehicle owners will receive the new notice when their renewal is due. The program should include all North Carolina vehicle owners by the middle of 2014.
Information about the combined notice is posted on the DMV website. It shows where property tax information is listed and how to find vehicle registration facts.
The vehicle's annual registration renewal fees will remain the same -- the increase in the bill is from the addition of the vehicle property tax. It does not affect a person's mortgage or home property tax.
No owner will have to pay taxes twice in the same tax year for the same vehicle. It is important to look at the vehicle property tax year rather than the calendar year. By law, the tax year for a vehicle begins the first month after the previous registration expires. While it is possible to pay twice in a calendar year, no vehicle owner will pay twice in the same tax year or for the same 12-month period.