Development of system to boost county motor vehicle property tax collections moving forward

Each year, North Carolina's cities and counties lose millions of dollars in unpaid property taxes on automobiles because of how local governments collect the taxes. Because the vehicle registration process is a function of state government, and the collection of property taxes is a function of county government, several months pass from the time a vehicle is registered until the county sends the property tax bill. This delay allows many vehicle owners to avoid paying the taxes.

By some estimates, North Carolina local governments collect less than 90 percent of the property taxes due on motor vehicles. In some counties, that number is lower than 75 percent.

In 2005, the Association helped shepherd through legislation sponsored by Rep. Dale Folwell (Forsyth) to change this process to combine the vehicle registration process with the collection of property taxes. As a result of Rep. Folwell's tireless efforts, the legislation unanimously passed both chambers.

Despite the overwhelming support, it has since been the target of several repeal efforts. While none of these efforts to undo this process have been successful, legislators have delayed the implementation date of this change twice in order to provide more time to build the infrastructure necessary to support this initiative.

The N.C. Department of Motor Vehicles, the N.C. Department of Revenue, the NCACC and other partners are diligently working to develop a technology system to support this effort. The next step is to build a Statewide Situs Address and Tax Jurisdiction Database (SSAD).

The SSAD project will develop Web and batch applications that counties will use to maintain their SSAD data. Keane, a company that offers a broad range of application, infrastructure and business process services, has been hired to develop the database and has hired former NCACC President David Young of Buncombe County to serve as its liaison to counties. Young helped organize a series of six meetings across the state in October and November to garner feedback from county information technology professionals and tax administrators on the database project.

"We need your feedback to make it as simple as possible," Young said during the Oct. 7 meeting at the Albert Coates Local Government Center in Raleigh. "This new system will vastly increase your collections."

Representatives from Keane, the Division of Motor Vehicles and the Department of Transportation attended each meeting, as did representatives from numerous counties. The SSAD project is the first step on the road to implementation, and it will result in the DMV being able to calculate the property tax owed on a vehicle when a citizen registers a new vehicle or renews the registration on an existing vehicle.