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0-111r UNC <br /> SCHOOL OF • <br /> THE UNIVERSITY <br /> of NORTH CAROLINA <br /> at CHAPEL HILL <br /> PROPERTY TAX BULLETIN NO. 153 APRIL 2010 <br /> Refunds and Releases <br /> Christopher B. McLaughlin <br /> Few issues carry a greater potential for conflict between taxpayers and tax offices than do <br /> requests for refunds or waivers of property taxes. This is true in large part because the Machin- <br /> ery Act allows refunds and waivers only under two very limited circumstances.Unless the <br /> disputed tax is imposed due to clerical error or is illegal, the Machinery Act prohibits the refund <br /> of a tax payment or the waiver—called a"release"in the Machinery Act—of an unpaid tax <br /> obligation.Contrary to what many taxpayers believe,the refund and release process is not the <br /> venue for a re-examination of a property's value or taxable status.Although some governing <br /> boards desire to be more forgiving on these issues,they do so at their peril:board members who <br /> approve refunds or releases that violate the Machinery Act can be held personally responsible <br /> for the lost taxes.' <br /> 1.Who may approve refunds and releases? <br /> The governing board, always. The local government's manager, attorney, or finance officer,some- <br /> times.But the tax collector,never. <br /> G.S.Section 105-381(b) of the North Carolina General Statutes (hereinafter G.S.)gives the <br /> governing board primary responsibility for approving refund and release requests.For refunds <br /> and releases of less than$100,the board may delegate this responsibility to the manager,attor- <br /> ney, or finance officer,who must then report monthly to the board on the actions taken. Con- <br /> spicuously absent from this list is the tax collector.In practice some tax collectors grant small <br /> refunds or releases and then seek approval from the board,but this is a risky approach. <br /> Once a refund or release is approved by the board or its delegate,the tax collector should be <br /> credited with that amount in the next annual settlement? <br /> Christopher B.McLaughlin is a School of Government faculty member who specializes in local taxation. <br /> 1.N.C.GEN.STnT.(hereinafter G.S.)§105-380(c). <br /> 2.G.S.105-381(b). <br /> 1 <br /> ©2010 School of Government.The University of North Carolina at Chapel Hill <br />