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Friday, August 05, 2005

House Combines Car Registrations and Tax Payments

The House approved a bill on Thursday that would allow automobile owners to pay their property taxes and their license tag renewal at the same time. The bill, House Bill 1779, should result in the collection of $80 million a year in taxes that go unpaid. Currently there is a months-long lag between the tag renewal and the property tax bill. The measure would require the DMV and the N.C. Department of Revenue to develop an integrated computer system by 2009 so that vehicle property-tax bills and registration-renewal forms could be mailed as a single bill.

The bill sponsor, Rep. Dale Folwell (R-Forsyth), said that the bill should save cities and counties $8 million a year in postage by reducing the number of past-due notices that are mailed. Gloria Whisenhunt, Chairwoman of the Forsyth County Board of Commissioners, told the House Finance Committee that one-third of auto owners across the state do not pay their vehicle property taxes on time. Another person stated that tax collectors statewide collect 86 percent of the property taxes due on cars.

DMV officials reported to fiscal analysts for the General Assembly that reworking the DMV's computer systems to allow for joint billing could cost as much as $304 million. However, legislative analysts noted that DMV computer software would need to be rewritten in the next few years regardless. To help pay for the new system, the bill would raise interest charges on unpaid local property-tax bills on vehicles from 2 percent to 5 percent for the first month after taxes are due. Analysts estimate that the change would raise $6.7 million a year.

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