Agenda - 12-13-2005-9d - Laserfiche WebLink

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Memorandum # 1045 November 28, 2005 Page 2 county and the LJ;A under the provisions of G.S. 160A-460. The inter-local cooperation agreement should state that the county will contract for the construction of school facilities and will purchase tangible school property. fi7 either case the county must have title to the asset at the time the construction or purchase takes place and payments are made. Title to school facilities may pass fiom the county to the L);A once construction is complete and all payments under the contract have been made, Ownership of tangible property may pass fiom the county to the LhA once the purchase has been completed. Since the issuance of Memorandum No. 859, schools become eligible for sales tax refunds under G.S. 164.4(c) and have recently lost that eligibility. The North Carolina Department of Revenue has reconfirmed to us that these two options are still valid provisions under which a county may claim a sales tax refund for school capital expenditures. Unless a county undertakes to make contracts for construction of school facilities or for purchase of tangible property under one of the two methods described in the preceding paragraph, a county should not claim a sales tax refund for taxes paid. At the time Memorandum No. 859 was issued, not all counties were authorized to use the provisions of G. S. 153A-1.58.1. Other counties had to use inter-local cooperation agreements to become eligible for sales tax refunds for school expenditures, All 100 counties are now eligible to use G.S.. 153A-158,1. Interest on Unpaid Motor Vehicle Property Taxes The General Assembly enacted House Bill 1779 which provides for the creation of a combined motor vehicle registration renewal and property tax collection system.. The Bill calls for an increase in the first months interest on uncollected property taxes on registered motor vehicles. This will apply to all property taxes levied on the registered motor vehicle: those levied by the county, any municipality and any special districts. The additional interest collected will be remitted to the Department of State Treasurer to be used by the Division of Motor Vehicles to create the combined registration and collection system, A memorandum providing greater detail about the provisions of House Bill 1779 will be issued by the Department. Counties should be aware that effective January 1, 2006, the interest rate charged for the first month that registered motor vehicles taxes are delinquent will increase from the current rate of 2% to 5%. The interest rate for subsequent months will remain at three-fourths of a percent (3/4%). The additional interest collected and remitted to the State should be accounted for in an agency fund, similar to the motor vehicle property taxes collected for municipalities and special districts. The additional interest would not be included in the county's budget. If you have questions or continents regarding this memorandum, please contact Vance Holloman at (919) 807-2380.