Recent Blog Posts

  • Waiving Interest on Property Taxes

    Authored by: on Wednesday, October 11th, 2017

    Here’s a simple rule to remember: local governments can’t waive interest on property taxes whenever they want.

    Where do you find this simple rule?  GS 105-381.  Plus GS 105-380.  But you really need to read those sections in conjunction with GS 105-273(15) otherwise you won’t know that GS 105-380 and GS 105-381 apply to interest as well as taxes. GS 105-348 also plays a role.  And don’t forget that GS 105-312(k) allows for the waiver of interest on unpaid discovery bills.

    Okay, maybe this rule isn’t as simple as it first appears.

    Read more »

  • Tick Tock! The Clock Is Now Running for Zoning Enforcement

    Authored by: on Tuesday, September 26th, 2017

    Jimmy lives on a large lot in a residential area of town.  Back in January 2013, he started a small auto repair shop in the garage behind his house.  You can hardly see the shop from the road because of the house and topography, but Jimmy did post a small sign near his mailbox to direct folks around to “Jimmy’s Auto Repair.” The town’s zoning enforcement officer saw the sign in September 2013.  The zoning ordinance prohibits auto repair in residential districts, so the officer sent a letter to seek compliance. Because of limited staff, many other zoning matters, and the lack of complaints about Jimmy’s operation, the zoning officer has not pursued enforcement any further.  This year a new neighbor moved in next door, saw and heard the auto repair shop, and called the town to complain.  Can the town now enforce the zoning ordinance against Jimmy’s commercial business in this residential area?  The law on this is changing.

    A new law sets specific statutes of limitation for land use enforcement litigation.  This blog explores the new limitations and practical considerations for moving forward.  The new law may spark local governments to initiate additional zoning enforcement actions over the next year (in anticipation of the law’s 2018 effective date) and to take a more proactive stance on zoning enforcement generally. Read more »

  • BPP Can Be a Real PITA

    Authored by: on Wednesday, September 20th, 2017

    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

    Authored by: on Tuesday, September 19th, 2017

    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

    Authored by: on Tuesday, September 19th, 2017

    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

    Authored by: on Friday, September 1st, 2017

    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)!

    Authored by: on Monday, August 28th, 2017

    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 »