BPP Can Be a Real PITA

Personal property often creates way more problems than real property does.  Situs, ownership, and valuation questions are almost always tougher to answer for personal property than for real property.  Because G.S. 105-275(16) exempts most non-business personal property (think of your couch and 60-inch flat screen TV), when we talk about taxation problems with personal property we are almost always talking about business personal property (“BPP”).

This blog focuses on two controversial issues involving BPP. The first is the practice of “auto-listing” BPP, also called “rolling over” BPP listings, in which a county lists BPP annually without obtaining a listing from the taxpayer.   The second is the resolution of late appeals and refund requests by taxpayers who belatedly claim that they never owned BPP for some of the time it was taxed by the county.  Read more »

Legal and Business Reasons Why Downtown Development Programs Should Involve Secured Loans—Not Grants

Dr. Blaine Beeper is a retired hospital administrator who was recently elected to council in the Town of Bushwood. Dr. Beeper thinks he has figured out how to jumpstart revitalization of Bushwood’s historic downtown. He proposes for the Town to offer annual cash grants to any owner who redevelops a commercial property within the downtown. Dr. Beeper reasons that redeveloped properties will carry a higher tax assessed value, and the additional tax revenue can be “granted back” to the owners in the form of cash grants for five years, calculated as some percentage of the additional property taxes received by the Town.  When Dr. Beeper floats this idea, he runs into resistance from the Town Attorney and the Economic Development Director, each for different reasons. The Town Attorney raises serious concerns about the legality of such a program, while the Economic Development Director says it doesn’t make good business sense and a loan program would better address owners’ financing needs. This post explains the legal and business reasons why Dr. Beeper’s proposed grant program should be scrapped in favor of a loan program. Read more »

Prayer at Local Government Meetings: An Evolving Jurisprudence

Is it legal for local governments to open board meetings with a prayer? It can be, depending upon how it is done. If not done correctly, the prayer practice may violate the Establishment Clause of the United States Constitution. Court decisions have emphasized that the analysis in prayer cases is very fact specific, and each new case turns on its own set of facts and conclusions. This blog is longer than usual because it replaces earlier posts that summarized the key Supreme Court cases on this issue, and adds a summary of the latest decisions from the Fourth Circuit Court of Appeals. That decision invalidated the prayer practice in Rowan County, North Carolina. While it’s difficult to articulate a rule or framework that can be applied to every prayer practice or policy, I’ve attempted to identify the kinds of prayer practices that are legally acceptable and the kinds that are prohibited. Read more »

Chapter 12 Bankruptcy and Tax Collection

Tax collectors are familiar with bankruptcy filings under Chapters 7, 11, and 13, but how many have seen a Chapter 12 bankruptcy?  That section of the Bankruptcy Code allows “family farmers” and “family fishermen” to restructure their debts when facing financial distress. A Chapter 12 plan is desirable because it is often less expensive than a Chapter 11 plan, which is primarily aimed at large corporate reorganizations, and more beneficial to the debtor than a Chapter 13, which is better suited for wage earners who have typically incurred fewer debts than family farmers and fishermen.

Happily for tax collectors, Chapter 12 is modeled on Chapter 13.  Many of Chapter 13’s tax friendly rules also exist under Chapter 12. Read more »

Mind the Gap (Billing)!

No, not the gap that subway riders all over the world are warned about at every stop.  I mean the gap between the time the NC registration for a motor vehicle expires and a new registration is issued for that same vehicle.  During that gap the motor vehicle is unregistered, meaning the county in which that vehicle is located has the obligation to list and tax it as personal property.  Gap billing is one of the few remaining county tax obligations for motor vehicles after the DMV took over the collection of property taxes on registered motor vehicles under the Tag & Tax Together program.

Gap billing has been required by G.S. 105-330.3 since Tag & Tax Together went live in 2013. But it was not until January 2017 that the state began providing counties with “gap billing reports” for vehicles whose registrations expired and were later reissued.  Earlier this month, the governor signed Session Law 2017-204 (see Part V on page 40 here), which amended G.S. 105-330.3 to simplify the gap billing process and make it conform more closely to “regular” personal property tax bills.  Just last week Durham County shared with other counties two gap billing forms (here and here) that they developed in consultation with the DOR. And finally, the DOR reports that very soon they will be helping counties automate the gap billing process.  All of which is to say that counties now have the information and the guidance needed to mind the gap and start billing. Read more »

Statues and Statutes: Limits on Removing Monuments from Public Property

Monuments to Confederate soldiers stand outside the county courthouse in many North Carolina counties.  Other Civil War monuments and statues are located in public parks and cemeteries, and one stands in a prominent location at the University of North Carolina at Chapel Hill.  What, if anything, can a local government do with such a monument?  That question has come into sharp focus in recent days.  Protests in Charlottesville, Virginia, related to that city’s decision to remove a Confederate statue turned violent, and a white nationalist protestor killed a woman when he drove his car into a crowd of counter-protestors.  Two days later demonstrators in North Carolina toppled the Confederate Soldiers Monument at the old Durham County Courthouse.

Governor Roy Cooper and other leaders have called for Confederate monuments to come down, but Cooper stated that there is a better way to go about it than demonstrators tearing down statues.  There are legal limits, however, for the State or subdivisions of the State to remove or relocate such monuments.  A North Carolina law, adopted in 2015 and codified as North Carolina General Statute (G.S.) § 100-2.1, requires that objects of remembrance on public property cannot be removed or relocated except in certain circumstances. On the surface that law seems straightforward—cities and counties can’t remove a Confederate monument.  The crafting of the law and the many ways that scenarios might play out, however, raise questions about the precise scope and effect of the law.  This blog seeks to identify those questions and offer some (but certainly not all) answers about the scope of local government authority for removing objects of remembrance.

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Companies that Boycott Israel – New Contracting Limitation But No Action Required Yet!

During the final week of the recently adjourned 2017 legislative session, the General Assembly enacted S.L. 2017-193 (H161), “Divestment from Companies that Boycott Israel.” This legislation created a new Article 6G of Chapter 147 prohibiting the investment of state funds in or governmental contracting with any company that boycotts or is involved in a boycott of the State of Israel.  The prohibition is similar to the Iran Divestment Act in that state agencies and local governments are prohibited from contracting with companies identified by the State Treasurer as engaging in certain activities determined by Congress and our state legislature to be against the interests of our country and state (see this post for recent legislative changes to the Iran Divestment Act).  This post discusses the new Israel boycott contracting prohibition which went into effect when the legislation became law on July 27, 2017.  Although the new law is in effect now, local governments should not worry about complying with it just yet – it will be several months before compliance requirements are triggered.

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