Agenda - 02-07-2023; 8-b - Motor Vehicle Property Tax Releases Refunds

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1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: February 7, 2023 Action Agenda Item No. 8-b SUBJECT: Motor Vehicle Property Tax Releases/Refunds DEPARTMENT: Tax Administration ATTACHMENT(S): INFORMATION CONTACT: Resolution Nancy Freeman, Tax Administrator, Releases/Refunds Data Spreadsheet (919) 245-2735 Reason for Adjustment Summary PURPOSE: To consider adoption of a resolution to release motor vehicle property tax values for four (4) taxpayers with a total of four (4) bills that will result in a reduction of revenue. BACKGROUND: North Carolina General Statute (NCGS) 105-381(a)(1) allows a taxpayer to assert a valid defense to the enforcement of the collection of a tax assessed upon his/her property under three sets of circumstances: (a) "a tax imposed through clerical error", for example when there is an actual error in mathematical calculation; (b) "an illegal tax", such as when the vehicle should have been billed in another county, an incorrect name was used, or an incorrect rate code (the wrong combination of applicable county, municipal, fire district, etc. tax rates) was used; (c) "a tax levied for an illegal purpose", which would involve charging a tax which was later deemed to be impermissible under state law. NCGS 105-381(b), "Action of Governing Body" provides that "Upon receiving a taxpayer's written statement of defense and request for release or refund, the governing body of the taxing unit shall within 90 days after receipt of such a request determine whether the taxpayer has a valid defense to the tax imposed or any part thereof and shall either release or refund that portion of the amount that is determined to be in excess of the correct liability or notify the taxpayer in writing that no release or refund will be made". For classified motor vehicles, NCGS 105-330.2(b) allows for a full or partial refund when a tax has been paid and a pending appeal for valuation reduction due to excessive mileage, vehicle damage, etc. is decided in the owner's favor. FINANCIAL IMPACT: Approval of these release/refund requests will result in a net reduction of $1,690.83 to Orange County, the towns, and school and fire districts. Financial impact year to date for FY 2022-2023 is $14,759.49.