07/23/14 — Vehicle tax rules helping collection

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Vehicle tax rules helping collection

By Steve Herring
Published in News on July 23, 2014 1:46 PM

It will be several more months before Wayne County tax officials have a clearer picture of how much of the nearly $6 million in vehicle taxes billed annually will be collected.

In prior years, the county was lucky if the annual collection rate reached 84 percent. Officials are hopeful that the implementation last September of a combined registration/tax bill will get collections much closer to 100 percent. Currently, it is running in the 98 percent range.

Previously, Wayne County's collection rate mirrored the statewide average of about 68 percent for bills that were paid when due.

By the time the registration year had worked through its annual cycle, the collection rate had inched up to approximately 84 percent as people who had been blocked from renewing their tags because their bills were delinquent finally paid their taxes.

"I think we are going to have to completely get through this first year and probably then some to really see how it is working," Tax Administrator David Ward said. "I think it is working pretty good."

"It is not 100 percent, and you are not going to have 100 because there are always exceptions," Assistant Tax Administrator Alan Lumpkin said.

The new combined registration/tax system went into effect last September. Vehicle owners had to begin paying the registration fee and vehicle tax at the same time.

Because of an overlap between the old system and new one, there was a one-time bump in revenues, Ward said.

"The way we were handling things in the past, we would get monthly vehicle files," Ward said. "We would process them and then get ready to bill them. Once we billed them, from the time you actually renewed your tag or got a new tag, until the time you got your bill and it was due to be paid, there was about a four-month period.

"Now what is happening is that you are actually getting a combined registration and tax bill on your registration notice. There is not that four-month gap."

The new notice is still for a person's regular vehicle registration period, people are just paying it at a different time of year, Lumpkin said.

The new system is helping, and Ward thinks that collections will continue to grow.

"We are going to see more money faster," he said.

For people who still do not pay on time, a 5 percent penalty is levied on both the taxes owed and the registration cost. The penalty on the tags would go to the DMV and the 5 percent on the tax to the county.

An additional three-quarters of a percent is added at the first of each following month until the bills are paid.

Also, if they are riding around with an expired tag, they are subject to being charged by law enforcement, Lumpkin said.

"It boils down to fairness, too," Lumpkin said. "Everybody is having to pay. They are paying equally, and they are paying on time. Basically it doesn't give you the opportunity to put off paying."

It is a lot cleaner way to handle the billing compared to the past when the county billed after the fact, he said.

"It is harder to collect after the fact," Lumpkin said. "Now you are paying ahead. You are paying for the coming year. If you get rid of that vehicle and turn that tag in, we pro-rate that bill so you only pay for the months that you had it. If you keep the tag and put it on something else, the bill still stands.

"If you turn the tag in, you can bring the receipt from DMV to us and we will pro-rate that bill, and you actually will get a little refund back depending on how months you had left on that tag."