ATTENTION NC DEALERS
“Tag & Tax Together” Dealer Information
Effective Sept 1, 2013, when a vehicle is sold, the title fee, highway use tax, registration plate fee and vehicle property tax will be collected by the DMV. (Vehicle property taxes will appear on license plate renewals beginning with those expiring Sep. 30, 2013.)
The NCDOT website has a “Business Partner Resources” Connect NCDOT 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. https://connect.ncdot.gov/business/DMV/Pages/Car-Dealers.aspx
The NCDOT website has a link for the new “Tag & Tax Together” program containing general details. http://www.ncdot.gov/dmv/vehicle/tagtax/
How will the customer and I know how much property tax is due?
A website will be available to provide that information based on the cost of the vehicle and the address at which the vehicle will be domiciled. The dealer can also call (919) 814-1779 for assistance. There will be more to come about the website as it is made available.
Is there a different website for estimates than the one on which the taxes will ultimately be calculated? Both the estimator and final tax bill will be drawn from the same database. The web site will have a tax estimator tool to enter the price of a vehicle and an address. Tax rates vary by jurisdiction and can include special rates that apply only in parts of some localities, so entering the correct address is critical. Tax rates can change and are almost always set on July 1, so an estimate made in June may not be accurate if the transaction actually happens in July.
If the owner has residences in multiple counties, which county tax rate would we use for the property tax? The owner will designate where the vehicle will be primarily domiciled (also known as the situs address). 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.
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 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, based on the value of the vehicle on which the plate is attached.
Does property tax need to be listed on the Bill of Sale?
If the dealer collects the property tax, the property tax should be listed on the Bill of Sale. If the dealer does not collect the tax, it should not be listed.
Are property taxes due on a newly purchased vehicle when it is titled?
Yes, beginning 9/1/13, vehicle property taxes are due at the time the title work is done. However, if the owner chooses not to pay the taxes at that time, the owner will receive a limited registration plate (LRP), issued by dealers using online titling systems, or the license plate agency, with a T (for temporary) sticker that will expire no earlier than 60 days after the vehicle is titled. When the LRP is delivered to the owner, a Limited Registration and Property Tax Notice stating the amount of the vehicle property taxes due will also be provided.
Will an expiration date sticker be issued for the Limited Registration Plate (LRP)?
Online dealers will issue the LRP and temporary (T) sticker. When the title work is done and the metal plate is issued by the license plate agency, a T sticker will be issued along with a Limited Registration and Property Tax Notice stating the amount of the vehicle property taxes due. When property taxes have been paid, a year sticker will be issued to replace the limited registration sticker on the plate already issued
Does the dealer have to collect the property tax if he issues a 30 day marker?
No. Property tax may be collected and paid through the license plate agency, which will allow issuance of a permanent plate with expiration 12 months later, but the LRP option is available for vehicles with a 30 day marker.
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”.
Should highway use tax be paid on the property tax?
Highway use tax should not be charged on the property tax.
Where will the customer pay the tax (after the sale) if they received the LRP with the T sticker?
Taxes can be paid direct to DMV on-line, by mail, or at any license plate agency.
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.
What will happen if the customer does not pay the property tax after the 60 day period?
The plate will be expired and the operator would 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 and accrued interest 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.
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 yourself.
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.
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.