Effective July 1, 2013, when a vehicle is sold, the property tax will be collected along with the other fees to title the vehicle. So the dealer will collect the title fee, highway use tax, registration plate fee and property tax. Also, property tax will begin showing on plate renewals in mid-2013.
The NCDOT website has a “Business Partner Resources” link where you can view and print “Approved Dealer Educational Courses”, “Dealer License Minimum Requirements”, “NC Title Manual”, “NC Dealer Manual” and a “Dealer Tag & Tax Together” information sheet containing questions and answers which will be updated.
The NCDOT website has a link for the new “Tag & Tax Together” program containing general details.
Are property taxes due on a newly purchased vehicle when it is titled?
Yes, beginning 7/1/13, the vehicle owner will pay the vehicle property taxes at the time the title work is done. However, if the owner chooses not to pay the taxes at that time, the owner can receive a Limited Registration and Property Tax Notice stating the amount of the vehicle property taxes due. The owner will receive a limited registration sticker, issued by the license plate agency that will expire after 60 days if the vehicle’s property taxes are not paid in full.
How will I know how much property tax to charge?
There will be a website the dealer will use to calculate the property tax or call (919) 814-1779 for assistance. There will be more to come about the website as it is made available.
If a plate is to be transferred from another vehicle, will the property taxes be due?
No, the taxes will be due on the next renewal date for that plate.
Can a dealer charge an extra fee to collect the tax?
No, but dealers can still continue to charge administrative or doc fees, which must be disclosed under current regulations already in place.
Will dealers issue the (60 day) limited registration sticker?
No, it will be issued by the license plate agency when the title work is done and the metal plate is issued unless the dealer is an on-line dealer doing their own title work and they will have the limited registration stickers.
Where will the customer pay the tax (after the sale) if they received the plate with the limited registration sticker?
The license plate agency, on-line or by mail and a year sticker will be issued to replace the limited registration sticker on the plate already issued.
Who should I contact if I have questions?
If you have DMV-related questions about the Tag & Tax Together program, please call (919) 814-1779.
Does property tax need to be on the Bill of Sale?
Yes, if the dealer collects the property tax, he should list it on the Bill of Sale. Highway use tax should not be charged on the property tax. No, if the dealer does not collect the tax, like with a cash sale where the customer is given the title work to deliver to the license plate agency and will pay it there.
Does property tax need to be on the 30 day marker receipt?
No, the receipt only lists “title and license fees collected by the dealer”.
If there is a trade in vehicle, is the property tax based on the purchase price less the trade in?
No, the property tax is based on the selling price of the vehicle (dealer sales only) regardless of a trade. Highway use tax, on the other hand, will still be based on the selling price less the trade-in.
If the owner lives in multiple counties, which county tax rate would we use for the property tax?
The owner will have to have a situs address, which is where the vehicle will be primarily domiciled. The property tax will be based on that address. The vehicle file can have a residence address, a mailing address, a vehicle location (situs) and a one-time address. (situs: n. the place where something exists or originates. Situs addresses are a common data element used in local government.)
Is the website for property tax rates going to be the central place where changes in the rates will be made?
Yes. It will be the same as the license plate agency system. The web site will have a tax estimator tool to enter
the price of a vehicle and an address. It will only provide an output based on what was entered. Any delay in
delivering the documents to the license plate agency could yield a different final property tax fee.
Should highway use tax be paid on the property tax?
If I collect the property tax and the customer returns the vehicle before I go to the LPA, should the tax be
returned to the customer?
Yes, any fees and taxes should be returned to the customer and documented to protect you.
What if I collect the property tax and the customer returns that vehicle and gets another vehicle instead? If the fees have not been paid to DMV, you would return everything and start over. If the fees have been paid to
DMV, then they would have to deal with the county for their refund of property tax paid and they would pay full
fees for the second vehicle purchased.
What will happen if the customer does not pay the property tax after the 60 day period?
The plate will be expired causing the operator to be subject to a citation if the vehicle is driven, interest will be accruing on late payments and a valid sticker would not be issued until the tax is paid.
Who will grant any exemptions, like for active duty military?
The county tax office will handle any exemptions and should be contacted with those questions.
Does the dealer have to collect the property tax if he issues a 30 day marker?
Yes, the title application and applicable fees must be delivered to the license plate agency within 10 working days for processing if the dealer issues a 30 day marker. The license plate agency can only issue a plate if all the fees are collected or could issue the limited registration sticker if the property tax is deferred for the 60 days.