Starting next July, North Carolinians will have to pay their county vehicle property tax at the same time they obtain or renew their registration.
It’s called North Carolina’s “Tag & Tax System,” and it could catch a lot of people off guard, Pat Goddard, Johnston County’s tax administrator, told county commissioners earlier this month.
“You may walk in expecting to pay $28, but you may have to pay $28 and $100 tax bill,” Goddard said. “This is going to be a big change and an eye-opening experience for some folks.”
Here’s how the system will work for both current vehicle owner and those buying a car”
About two months before their registration expires, vehicle owners will receive in the mail a combined tag and tax notice. They will have to pay both when they renew.
People buying a vehicle will be required to either pay the tax on site or defer the payment. Those who defer will get a temporary registration sticker that will last for the rest of the month, plus two months.
The change will take effect with registration renewals due in July. By June 2014, all North Carolina vehicles will be enrolled in the Tag & Tax.
Under the current system, the N.C. Division of Motor Vehicles sends registration records to each county’s tax office, which mails tax bills out about three months after the issuance or renewal of registration. The General Assembly passed Tag & Tax in 2005, but it is just now going into effect.
Goddard said the goal is to cut down on late collections. In Johnston County alone, more than $856,000 in vehicle taxes billed in 2011 remained unpaid as of June 2012. The N.C. Department of Revenue estimates that counties collect taxes on 85 to 91 percent of vehicles.
“It’ll improve compliance,” Goddard said. “If you want to buy a plate, you’ll have to pay your vehicle tax.”
Craig Wiesner, a Vance County resident, was at the DMV office in Smithfield this month to renew his registration. Wiesner didn’t like the change.
“When you go get your tags, you’re going to have to pay two or three things at the same time,” he said. “It’s really going to put people behind in this economy.”
Laura Price of Selma said Tag & Tax sounded like a good way to get people to pay their vehicle tax. “If you plan on that … you can prepare for it,” she said.
Getting the word out is a priority for state officials next year, Goddard said. The state is planning a public-relations campaign similar to “Click It or Ticket,” which urges riders and drivers to wear their seatbelts.
County Commissioners’ Chairman Allen Mims wondered if the state could effectively collect property taxes for counties. “It scares me to death that this is going through DMV,” he said. “Things get lost in the system.”
Goddard said there could be delays in getting the tax revenues to counties. “Hopefully there won’t be a need in the future for anyone to withhold that money or to be slow to send it out to us,” she said. “But that’s the way it works – it goes through them, back to us.”
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