NC DMV glitch delays Tag & Tax program

bsiceloff@newsobserver.comApril 30, 2013 

— State Division of Motor Vehicles officials announced on April 23 that they were ready to start their long-delayed “Tag & Tax Together” program in May – to have the DMV collect county car taxes along with state license tag fees.

But three days after last week’s DMV announcement, local tax officials in all 100 counties were notified quietly that they will have to continue collecting automobile property taxes for at least another couple of months.

As The News & Observer reported Tuesday, DMV had said the first tag-and-tax bills would be mailed in May, for cars whose registration renewals are due in July. The latest prediction from the N.C. Department of Revenue is that the first combined bills will be for cars with September renewal dates.

The program is supposed to be phased in over the coming year, for car renewals due in subsequent months.

David B. Baker, local government director for the Department of Revenue, told county tax collectors by email Thursday that the Tag & Tax Together program would be delayed two months.

He blamed the holdup on new software needed by businesses that perform online car titling and registration service for more than 600 auto dealers, and a million cars each year, in North Carolina. They haven’t had time to test the new DMV software they needed to implement the combined system.

“They didn’t get their new (software) code in time to flip the switch this past weekend, like we wanted to,” Baker said in an interview Tuesday. “The new software has to be approved by DMV, and that wasn’t done on a timely basis.”

DMV was supposed to have done this earlier, he said.

“I was surprised that it came up at the twelfth hour like it did on us,” Baker said.

The General Assembly decided in 2005 that DMV should take over the collection of county property taxes on motor vehicles. The idea is to streamline government hassles for car owners, who will make one combined tax and fee payment to DMV each year, instead of separate payments to DMV and the local county tax collector. DMV forwards the tax portion to the county.

And it is supposed to be good for county tax coffers. If vehicle owners can’t renew their tags until they pay the tax, they’ll be more diligent about paying. Collection rates will improve, and county collection costs will decline.

Marcus Kinrade, Wake County’s revenue director, recently submitted a budget that cuts his spending by $350,000 for the coming year. That’s what he expects to save on car tax collection expenses, even after paying a small collection fee to DMV.

Now he plans to send those car tax bills for another couple of months – about 65,000 of them each month in Wake County. He’ll have to find about $75,000 to cover this unexpected cost.

“This will kind of put me in a bind,” Kinrade said, “because now I’ve got to send notices for two more months under the old system, and I had submitted my budget with that expense not in there.”

DMV officials did not respond to requests for comment.

Siceloff: 919-829-4527 or blogs.newsobserver.com/crosstown or twitter.com/Road_Worrier/

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