Tina Stone, Revenue Administrator III, PPSTina Stone, Revenue Administrator III, PPSRobin Rogers, Property Valuation Specialist Robin Rogers, Property Valuation Specialist

IITravis Isaacs, Property Valuation Specialist Travis Isaacs, Property Valuation Specialist

IIII

NCDORNCDOR

SystemSystem

2015 NCATA Spring Conference2015 NCATA Spring ConferenceGreensboro, NCGreensboro, NC

Revenue & Cost Default Situs Gap Billing Municipal Vehicle Fees Bankruptcy Bad Debt Tax Rates Customer Service

Old system: “Billing in Arrears”Major Issues:

Average of 66% of RMV bills are paid on timeAverage Collection Rates at Fiscal Year End by County Population:

RMV AnnualStatewide Average 87.22% 97.91%100,000+ 88.09% 98.37%50,000 – 99,999 85.37% 96.96%25,000 – 49,999 84.01% 96.61%24,999 and Below 84.08% 95.23%

*Source: LGC Memorandum #2012-14, 4/17/2012

5

RENEWAL MONTH TOTAL VPT COLLECTION TOTAL FEES NET VPT COLLECTIONSETEMBER 2013 $22,867,319 $0 $22,867,319

OCTOBER 2013 $45,801,195 $1,594,225 $44,206,970

NOVEMBER 2013 $42,922,000 $1,782,588 $41,139,412

DECEMBER 2013 $51,147,385 $2,623,719 $48,523,666

JANUARY 2014 $53,763,541 $1,803,535 $51,960,006

FEBRUARY 2014 $56,441,018 $956,491 $55,484,527

MARCH 2014 $64,191,510 $2,895,220 $61,296,290

APRIL 2014 $66,084,464 $1,932,074 $64,152,390

MAY 2014 $67,411,659 $1,059,476 $66,352,183

JUNE 2014 $66,000,628 $2,806,537 $63,194,091

JULY 2014 $70,010,647 $1,870,859 $68,139,788

AUGUST 2014 $68,347,080 $1,258,921 $67,088,159

SEPTEMBER 2014 $65,388,089 $2,764,489 $62,623,600

OCTOBER 2014 $65,086,645 $2,184,715 $62,901,931

NOVEMBER 2014 $55,425,377 $1,214,267 $54,211,110

DECEMBER 2014 $64,957,508 $2,040,799 $62,916,709

JANUARY 2015 $62,957,492 $2,168,995 $60,788,498Total $988,803,558 $28,787,915 $897,058,151

Old System Collections Gross Revenues

Data from Treasurer's Website Statewide Totals

2012-13 Total Revenue $570,960,352.28

2012-13 average collection per month $47,580,029.36

Tag and Tax collection EstimateGross RevenuesStatewide Totals

Last 12 month average collection per month $64,358,509.85

Total Estimated Revenue for 2014-15 $772,302,118.24

Difference (increase) Gross Revenue $201,341,765.96

6

Tax Collection Percentages

Tag and Tax System

80% Renewals @100% collection rate 80.00%

20% Issuances @ 95% collection rate 19.00%

Statewide Collection Rate 99.00%

Old System

Statewide Collection Rate 86.20%

7

Why are county’s required to have a “Default Situs”??

Default situs was initiated because when a taxpayer goes to purchase a registration they must pay the property tax. If the taxpayer’s county is correct, but the address being sent over does not match then the VTS will send back the default situs amount for that county.

Is your county’s Default Situs effective?

◦ Does it cover the highest populated area or the highest possible tax district combination? It can be similar to throwing darts.

◦ NCVTS NCDMV

On average about 3% paid the default situs in calendar year 2014. When you have almost 9 million vehicles that is still a large number.

What can county’s do to avoid taxpayers paying the default:◦ Update the Situs Repository

Update with correct address or a variation called and alias

Update STARS Vehicle Location Address◦ Review Default Situs Report

G.S. 105-330.3(2)For any months for which the vehicle was not

taxedbetween the date the registration expired and thestart of the current registered vehicle tax year,

thevehicle is taxed as an unregistered vehicle asfollows:a. The value of the motor vehicle is determined as

of January 1 of the year in which registration of the motor vehicle expires.

G.S. 105-330(2)b. In computing the taxes, the assessor must use

the taxrates and any additional motor vehicle taxes of the various taxing units in effect on the date the taxes are computed.

c. The tax on the motor vehicle is a product of a fraction and the number of months for which the vehicle was not taxed between the date the registration expires and the start of the current registered vehicle tax year. The numerator of the fraction is the product of the appraised value of the motor vehicle and the tax rate of the various taxing units. The denominator of the fraction is 12.

G.S.105-330.3d. The taxes are due on the first day of the second

month following the month the notice was prepared.

e. Interest accrues on unpaid taxes for these unregistered classified motor vehicles at the rate of five percent (5%) for the remainder of the month following the month until the taxes are due. Interest accrues at a rate of three-fourths percent (3/4%) for each of the following month until the taxes are paid, unless the notice is prepared after the date the taxes are due. In that circumstance, the interest accrues beginning the second month following the date of the notice until the taxes are paid.

How do we collect the taxes if they become delinquent?

◦ Tax Collectors will use the same remedies they used in the past under G.S. 105-365.1 thru 105-368 to collect taxes on personal property.

◦ Tax blocks that were used in the past cannot be placed on the vehicle under the new Tag & Tax law.

G.S. 20-97(b)◦Cities and towns may levy a tax of not

more than ($5.00) per year upon any vehicle resident in the city or town. The proceeds of the tax may be used for any lawful purposes. If a city or a town wants to add a ($5.00)

vehicle fee to the vehicle property tax. They would need to form a resolution and adopt it to their budget. The county would then add the fee to the VTS.

G.S. 20-97(c)◦ A city or a town that operates a public transportation

system defined in G.S. 105-550 may levy a tax of not more than five dollars ($5.00) per year upon any vehicle resident in the city or town. The tax authorized under this subsection is in addition to the tax authorized by subsection (b) of this section and under any local legislation, would exceed ($30.00) per year. The proceeds of the tax may be used only for financing, constructing, operating and maintaining local public transportation systems. Cities and towns shall use the proceeds of the tax to supplement and not to supplant or replace existing funds or other resources for public transportation systems. This subsection does not apply to the cities and towns of Gaston County.

When a taxpayer files a Bankruptcy Petition, an Automatic Stay immediately goes into effect.

◦ The Automatic Stay applies to every bankruptcy debtor under Title 11, Section 362 of the United States Code which creates a variety of restraints on creditors and of those restraints two are particularly important to RMV’s. Under the Tag & Tax program the Automatic Stay

would only be in affect the first year after that the property tax would be due.

Pre-Petition: If a tax payer renews a registration or applies for an initial registration before filing for bankruptcy. There are only two situations under the Tag & Tax system that are pre-petition.◦ When a taxpayer files bankruptcy after an

existing registration expires but before the registration is renewed.

◦ When a tax payer files bankruptcy after buying a car from a dealer and obtaining a limited registration, but before a “regular” full year registration obtained.

Post-Petition: If the renewal or registration is obtained after the bankruptcy filing.

Technically if the registration and renewal are not due or delinquent at the time of filing. The taxes would be due at time of registration or renewal because the taxes were not due at the time of the filing. The only exception would involve limited registration plates.

LRP: When a taxpayer applies for a new registration or registers a new vehicle the taxpayer has the option of obtaining an LRP which is good for sixty days past the initial month of registration.◦ If the taxpayer declares bankruptcy before

purchasing the vehicle and the taxpayer obtained an LRP they would be required to pay the property tax.

◦ If the taxpayer purchases the car, gets an LRP and then the taxpayer declares bankruptcy the “Automatic Stay” would be recognized.

When a registration is renewed and it is determined that the taxpayer did not have enough funds in their account to cover the transaction (returned check) it is called a “Bad Debt”. DMV is the collection authority and is responsible for collecting these funds.

Counties are still credited the property taxes for 13 months. If the “Bad Debt” is not satisfied within that time period the debt is written off by DOT Fiscal and the funds are taken back from the county.

When written off the ACH Remittance from DOT will reflect this “Bad Debt” as a debit. They will provide the tag and vin # so county’s can determine what jurisdictions the money needs to be held back from.

If the “Bad Debt” is paid after 13 months. County’s will see a credit for the funds in the same amount that was debited previously. In the past DOT had been splitting the collection fees between the county and DMV this will stop with the April ACH remittance. DMV will keep the penalty for collecting the “Bad Debt”

DMV’s collection rate is above 95%.

Tax Rates for the 2015-16 fiscal year need to entered by Monday June 30, 2015.

Please send in by fax or email a signed copy of the tax rates from the adopted budget.(Not the entire budget just the pages pertaining to the tax rates) We do not want a screen shot from the VTS tax schedule screen. If you send a screen shot we cannot tell if you have made any errors.

After June 30th tax rates can only be updated or changed by DOR staff. If your county will have an interim budget please let us know ASAP.

Did You Know…

Know The Different Offices Within The DMV Main Office/Raleigh (919-715-7000) Call Center/Bladen County (919-814-1779) License Plate Agency “LPA”

http://ncdot.gov/dmv/locations.html STARS “HelpDesk” for LPA Assistance Only

Tax ReceiptsCounty or By Calling Raleigh DMV 919-715-7000

or Bladen Call Center 919-814-1779Double Payment Issues

Bladen Call Center (Credit Cards/Online) Inspection Issues

All Vehicles Must Be Inspected Yearly877-421-0020

Refunds/ReversalsScenario: Customer paysincorrect county. Customercomes to county asking forrefund. Customer is sent toLPA. LPA says “no refundshere, you have to go to thecounty”.

Customer

County DMV/LPA

????

Refund Reversal

Refunds County Refunds DMV

Reversals/DMV

Past 30 Days or Online Payment

Refund is created by county and mailed to customer

Within 30 Days Refund is created

behind the scenes & mailed to customer

When sending the customer to the LPA do not use the word “refund”, please use “reversal”.

Tina Stone, PPS-tina.stone@dornc.com

Travis Isaacs- travis.isaacs@dornc.com

Dave Duty- david.duty@dornc.com

Robin Rogers- robin.rogers@dornc.com

Tabitha Ashe- tabitha.ashe@dornc.com(919)-814-1129

Customer

????

Refund Reversal