Two years ago, the state began requiring residents to pay the property tax on their cars before renewing their registration. Since then, Johnston County’s vehicle-tax collection rate has jumped from 91 to 99.5 percent.
“When you are looking at the money left on the table, that’s a significant amount,” said Sheila Garner, the county’s tax administrator.
The Tag and Tax Together program, mandated by the General Assembly, was designed in part to increase collection rates. Previously, residents paid their motor vehicle taxes and registration renewals in separate transactions. That meant a vehicle owner could get his new tag but still be delinquent on the tax bill.
While more tax revenue is flowing into the county’s purse, the Tag and Tax Together program might be only partly to thank.
In fiscal 2013-14, when residents started paying for their taxes and tags together, the county took in about $14 million in motor vehicle taxes, or roughly $3.5 million than in the prior year. But other factors likely helped fuel the increase. For instance, residents with delinquent taxes had to pay both their current bill and outstanding amount from prior years to get their tag.
Garner said the reclassification of some vehicles, mostly commercial trucks, to personal property in January 2014 also makes it hard to compare total collections before and after the Tag and Tax program started. While it’s clear the collection rate is higher, she said it will take a few years to see how much revenue is increasing because of the new program.
What is clear is that because more people are paying their current tax bills, her collectors can spend more time on delinquent cases and start on them sooner. The program has also increased the accuracy of addresses for property owners, Garner said.
“I certainly believe that it’s much better,” she said.
Garner said the program might have caused some confusion initially, but most residents have grasped the system.
“Pretty much everyone in North Carolina who has license tag has gone through the system,” she said. “A lot of people who pay their bills like it.”