Learn More About “Tax & Tag Together”

Earlier this week, the NC Department of Transportation hosted a webinar for county and municipal finance officers on the implementation of the new “Tax & Tag Together” program. This is in response to passage and adoption last year of HB1779, which streamlines and coordinates motor vehicle owner payment of State Motor Vehicle Registrations along with County and Municipal Ad Valorem Vehicle Taxes.

Starting this year, annual registration fees and vehicle property taxes will be paid to the Division of Motor Vehicles, a division of NCDOT. In turn, the State will distribute the taxes to the appropriate counties.

Here is the powerpoint presentation from this week’s NCDOT webinar. Specific references to how this change in collections and reimbursement will impact the FY 2014 local budget process and other key provisions can be found on Slides 7 to 14.

Click Here to Access the Slideshow If Embed Is Not Visible

The following notes were as a follow-up to the presentation by NCDOT’s Pete Rodda:

Most of the follow-up questions center around what must be budgeted for next year to maintain the last four months of the “old system” and the accompanying delinquent enforcement. Remember, the March, April, May and June, 2013 renewals are subject to billing under the “old system”. Those bills will be due July 1, August 1, September 1 and October 1 respectively. It would appear the TEC valuation, postage and printing expenses for March renewals (due July 1) would be incurred in FY 2013 as the processing and mailing would happen prior to July 1. Expenses for the April, May and June renewals are likely to be incurred in FY 2014. I would not rule out the potential for a “catch-up” file or two that would be billed under the old system, although I think this is unlikely. So I would suggest budgeting for at least four months of hard costs in FY 2014 to support the remaining registrations to be billed under the old system.

Don’t forget about enforcement of past due RMV bills generated under the old system. I strongly recommend vigorous enforcement of past-due RMV bills to avoid a vehicle owner having to pay past-due taxes to clear a block so that they can pay current-year taxes to obtain their registration! I’m concerned about individuals who might just walk away and drive on expired plates. Obviously the counties should budget funds for FY 2014 for past-due enforcement activities.  

Counties operate a VTS within their local tax systems. Depending on how your systems interact, you may need to keep your local VTS operational as long as the collector has unpaid RMV bills within their charge. Each county has to make this decision based on their own set of circumstances. One thing I feel is certain – your local VTS cannot be shut down and earlier than July 1, 2014.

Click Here for More Information on the “Tax & Tag Together” Program