Members of the House Finance Committee met last week to approve a bill that, if ratified, would collect nearly $80 million in unpaid vehicle taxes.

Presently, vehicle owners pay for the registration and property tax of their car to separate agencies at different times. This new bill seeks to combine these fees in to one payment. According to Forsyth County Republican Rep. Dale Folwell, a primary sponsor of the bill, this will make the process far more efficient.

“What this bill is trying to do is reward those people who pay their taxes on time
and make it more consumer friendly,” says Folwell. Only 65 percent of vehicle owners in North Carolina pay this tax on time, he said. That amounts to nearly $80 million, and this hurts the counties, cities, and fire districts. “We’ll save $8 million in postage, $4 million of it will be retained at the state and $4 million in postage savings by consumers,” says Folwell.

According to the bill, the Property Tax Division of the Department of Revenue will prepare a notice for each car, which will be the total of the tax and registration fees. This fee will be paid via the Department of Motor Vehicles, Internet, or U.S. Postal Service. Folwell says the exact amount needed for the implementation has not yet been determined.

“This is an issue of fairness,” said Paul Meyer, Assistant Counsel of the North Carolina Association of County Commissioners, referring to vehicle owners who neglect to pay their vehicle taxes. The bill is a way to enforce the payment of vehicle taxes. Meyer spoke on behalf of the organization in favor of this bill. “This has been one of our top legislative priorities in the past three years,” he said.

“Most other states are doing this, or some form of this, that’s based on if they have a tax at all. Many states don’t have this because they don’t have a need for it,” said Folwell.

The bill involves several agencies including: the Department of Motor Vehicles, the Department of Revenue, the Department of Insurance, the Association of County Commissioners, the League of Municipalities, and the Association of County Managers, so it took time for this legislation to take form. It also has bi-partisan sponsorship from Rep. Verla Insko, a Democrat from Orange County, Republican Reps., Carolyn Justice representing New Hanover and Pender Counties, and Tracy Walker of Wilkes County. The committee hopes to have this legislation in place by July 1, 2007.

Jodie Powell is and editorial intern at Carolina Journal.