North Carolina Property Tax Monitor

We've been informed that revaluation notices informing Guilford County property owners of their new assessed values were mailed out on Thursday and Friday of last week.  They should be hitting mailboxes very soon if they aren't there already.  If you own property in Guilford County, be on the lookout for your notice.  If you don't get yours, be sure to contact the Guilford County Tax Office to find out where it is.

We can't tell you what to expect from your notice.  However, Doug Clark has reported at news-record.com that the total Guilford County tax base increased 2 percent since the 2004 revaluation.  As reported by Mr. Clark, the County's Tax Director Ben Chavis has stated that the increase is a factor of growth - not increased values. In fact, industrial properties as a whole have apparently lost value to the tune of 3.4 percent.  Interestingly, Mr. Chavis has also stated that he believes property tax appeals will result in a reduction in the tax base ultimately resulting in a reduction of the total increase to 1 percent.

If you think your property has been over assessed, we recommend you check out our previous post outlining the appeals process and review carefully your revaluation notice for all applicable deadlines.  If you miss one, you'll have to wait until next year to pursue a reduction in your assessment.

Image Copyright Meirion under the Creative Commons Attribution-ShareAlike 2.0 Generic License.

Winston-Salem property owners currently pay 47.5 cents in property taxes to the city for every $100 of their property's assessed value.  That .475% rate is one of the lowest in all of North Carolina's urban cities.  As reported by Laura Graff in the Winston-Salem Journal, that may be about to change.

Almost  a year ago, we wrote a post discussing the possibility of taxing jurisdictions increasing property tax rates in an effort to meet budget shortfalls.  The City of Winston-Salem is staring at an expected $9.4 million shortfall in the 2012-13 fiscal year budget and, as reported by Ms. Graff, property taxes are the most likely source to address it.  However, City Council members put forth two very different concepts on Monday which would accomplish the task. 

First, Council member Leight supports raising taxes by 4 or 5 cents per $100 of assessed value. 

If we assume a 4.5 cent/$100 increase, Leight's proposition would do the trick.  The assessed value of all taxable property within Winston Salem is roughly $21 billion.  Taxing that at an additional 4.5cents per $100, or .045%, would generate an additional $9.45 million in revenue.  That is certainly close enough to the expected shortfall for government work.

But Council members Clark and Merschel have a different idea. 

Current North Carolina law exempts nonprofits from paying property taxes on property used in connection with their non-profit purpose.  According to Winston-Salem Deputy Budget Director Ben Rowe, there is about $4 billion of such exempted properties in the city, including Wake Baptist Medical Center and Forsyth Medical Center.  Council member Clark stated Monday that the North Carolina General Assembly should revise the law which offers the non-profit exemption.  Council member Merschel agreed.  If that $4 billion were taxed at the current rates, the $9.4 million expected budget shortfall would turn into a $9.5 million surplus in one swoop.  Council member Merschel acknowledged, however, that "[i]t is a double-edged sword, because...they are part of the economic engine of this community."

While both of these fixes would cover the expected budget shortfall, we think the most likely to occur is a tax rate hike.  Given that spending cuts appear off the table, Winston-Salem residents shouldn't be surprised to see it happen.

Image Copyright Scot63US under the Creative Commons Attribution-ShareAlike 2.0 Generic License

If you did not postmark your 2011-2012 property tax payment by January 6, 2012, then you have already been hit with 2% interest.  For every month that the payment remains delinquent, you will face an additional .75% interest obligation. 

Yet again, Chris McLaughlin has published a fantastic post on Coates' Canons:  NC Local Government Law Blog in which he tells you all this along with a nice summary of the forced collection tools available to taxing authorities.  Included in that toolbox you will find the ability to garnish wages, levy personal property (including vehicles), foreclose on real property, and attach bank accounts.  For more, check out McLaughlin's post here.

Image Copyright Paul Swansen.  This work is licensed under the Creative Commons Attribution-NoDerivs 2.0 Generic License.

The North Carolina Department of Revenue has released its 2011-2012 documents pertaining to North Carolina property taxes. 

First is the spreadsheet entitled 2011-2012 Property Tax Rates and Revaluation Schedules for North Carolina Counties (.pdf). On this spreadhseet, you'll see for each North Carolina county the current tax rate of the county (but not of each municipality within the county), the year of the latest revaluation, and the year of the next scheduled revaluation.  According to this document, the following thirteen counties are scheduled for revaluation in 2012.

• Bertie
• Cabarrus
• Cherokee
• Franklin
• Guilford
• Madison
• Montgomery
• New Hanover
• Pamlico
• Pitt
• Rutherford
• Surry
• Watauga

If you own real property in one of the above listed counties, you should be on the lookout for a letter from the tax office notifying you of the new assessed value for your property.  Such notice will also give you information regarding your appeal rights in the event that you believe the proposed assessed value is in excess of fair market value.  If you think you've been over-assessed, a successful appeal in 2012 rather than one brought in later years will get you the most bang for your buck. Check out this post on the appeals process for more information about the various required actions and deadlines involved in pursuing such an appeal.

Second is the spreadsheet entitled 2011-2012 Tax Rates and Effective Tax Rates (.pdf). This spreadsheet provides the current tax rates for each county and for each municpality within each county.  Additionally, it shows the sales assessment ratio for each county and each municipality within each county from its latest revaluation. 

PLEASE NOTE THAT THIS INFORMATION IS ASSUMED TO BE CORRECT AND UP-TO-DATE ONLY AS OF THE DATE OF EACH DOCUMENT.  TAX RATES CHANGE FROM YEAR TO YEAR, AND SCHEDULED REVALUATIONS ARE SOMETIMES POSTPONED.  SO, USERS WOULD BE WISE TO CONFIRM THE INFORMATION SHOWN WITH THEIR PARTICULAR COUNTIES.

The copyright holder of the image used in this post has released the image into the public domain, and unconditionally granted to anyone the right to use the image for any purpose, without condition.

In a previous post, we explained that real and business personal property in North Carolina is typically taxed at fair market value.  We've also written in greater detail about the three generally accepted valuation approaches used to determine fair market value:  the cost approach; the income capitalization approach; and the sales comparison approach.  But that substantive information won't do much good if an appeal suffers a procedural failure.  In this post, we do our best to provide an overview of the appeals process in North Carolina, including the various dates and filings one should be aware of when navigating this system.  As you will see, it is easy to make a misstep in this system.

The Board of Equalization and Review

The first required level of appeal is to a body known as a Board of Equalization and Review.  Each is comprised of local citizens appointed by the respective Board of County Commissioners.  A Boardof Equalization and Review must convene between the first Monday in April and the first Monday in May and must adjourn by December 1 in revaluation years and July 1 in non-revaluation years.  The deadline for an appeal to the local Board of Equalization and Review is the adjournment date for that Board.  This sounds simple enough, but not all Boards of Equalization and Review adjourn on the same date.  Thus, the deadline for the first level of appeal differs from county to county, and from year to year.  The only way to be certain is to phone your tax assessor's office and make the inquiry.

a. Notices in Revaluation Years

Remember that taxing jurisdictions do not revalue real property every year.  A year in which a taxing jurisdiction revalues its real property is typically referred to as a revaluation year.  Taxing jurisdictions send out notices of assessment notifying taxpayers of the assessed values of their properties in revaluation years.  These notices of assessment are typically (but not always) mailed in February, giving taxpayers notice of their assessed values and an opportunity to appeal before the deadline for doing so runs. 

Revaluation notices often include language that appears to require taxpayers who disagree with their assessments to file requests for informal review.  Despite what the revaluation notices appear to require, a taxpayer can bypass a request for informal review and instead appeal directly to the local Board of Equalization and Review.  That said, we typically advise taxpayers to take advantage of the informal review process before a formal appeal is filed.  Once a request for informal review is made and the tax assessor's office has reached its conclusion, a notice of final decision will be sent to the taxpayer.  This notice will set forth a deadline for filing a formal appeal the Board of Equalization and Review.

b. Notices in Non-revaluation Years

A common procedural failure we see is a failure to file a Board of Equalization and Review appeal before the adjournment date in non-revaluation years.  Why?  Because tax assessors are not required to send out a notice of assessment in non-revaluation years.  So, the first reminder that taxpayers receive about their property value will be the bill, which may not arrive until after the deadline for appeal has come and gone.  Thus, the only safe bet in a non-revaluation year is to request a Board of Equalization and Review appeal form very early in the year and to file it before April 1.  Otherwise, the appeal deadline can come and go, and unknowing taxpayers will lose a year of potential tax savings.

 The North Carolina Property Tax Commission

Once a hearing is held at the local Board of Equalization and Review, the taxpayer will receive a notice of decision.  If the taxpayer disagrees with that decision, it has thirty days from the date on the notice (not the date the notice is received) to file a Form AV-14 - Notice of Appeal and Application for Hearing with the North Carolina Property Tax Commission.  A copy must also be served on the taxing jurisdiction's assessor and attorney.  Once the AV-14 is filed, the appeal to the Commission is perfected. 

At the Commission level, the North Carolina Rules of Civil Procedure apply, which means discovery is permissible.  Additionally, the parties must file an Order on Final Pre-Hearing Conference that provides all stipulated facts and proposed evidence.  Six executed copies of the Order and each party's evidence must be provided to the Commission at least ten days before the hearing of the matter.

Once the hearing is conducted, the Commission will issue its decision.  If either the taxpayer or the taxing jurisdiction disagrees, they have the right to appeal the decision to the North Carolina Court of Appeals.

Image Copyright Jonathan Wilkins.  This work is licensed under the Creative Commons 2.0 Generic License.