I often use this blog to provide detailed answers to common tax questions. But sometimes the most common questions have answers that aren’t quite long enough to justify their own blog post. Below is a collection of a few short but important FAQs and answers.
- Are we required to remove information relating to law enforcement officers from our county tax website?
I don’t think so. In 2015, the General Assembly passed a law that (possibly) was intended to require that all address information relating to law enforcement officers (LEOs) be kept confidential. But the law appears to be aimed only at information obtained from LEO personnel files. My colleague Frayda Bluestein discusses the law and its somewhat murky interpretation in this blog post. In the seven years since she published her analysis, there has not been any judicial or legislative interpretation of the statute suggesting that it applies to information other than that obtained from a personnel file.
Tax offices, of course, don’t get address information from local government employee personnel files. As a result, I do not believe there is any obligation to remove LEO information from county tax websites.
That said, counties are free if they so desire to remove LEO addresses (or any other information) from their tax websites. There is no law requiring that any particular tax information be made available via the Web. But removing information from the county tax website does not make that information confidential; that information would still be subject to disclosure upon request unless another public records law exception applied. See this blog post for more on county tax websites.
- Can we tax homes that are being used as Airbnb’s at a higher rate than other homes?
No. A local government must adopt a single tax rate for all property, both real and personal, in its jurisdiction. (See this blog post for more on our state constitution’s uniformity of taxation requirement.)
The only exceptions to the uniformity requirement are special service tax districts and rural fire districts, which allow a local government to levy an additional property tax rate for a specific purpose on a specific portion of its jurisdiction. (See this blog post and this one for more on special service tax districts.)
If a local government had a particular area in which there were many rental houses, that government could create a special tax district and levy higher property taxes in that area. But that additional property tax would apply uniformly to all property in the tax district, meaning even homes that were not used as rentals would be taxed. Equally important, the revenue from a special service district tax must be used for one of the limited purposes permitted under the special service district provisions. It could not be used for general local government expenses.
A related question is whether rental houses should be appraised for property taxes at higher values than similar homes that are not being rented by their owners. I’m not an appraisal expert like my colleague Kirk Boone, but I think the answer to this question is no.
A tax appraisal must be linked to the property’s true market value. GS 105-284. If two houses are identical, in the same neighborhood, and each could be used as short-term rentals, the tax appraisals of both houses should be identical (or at least very similar) because the market values of the two homes would presumably also be identical (or at least very similar). I think that would be true even if one house was currently used as a short-term rental and the other one wasn’t.
The only material property tax difference for houses used as short-term rentals is the requirement that the owners list all of the personal property in the houses (furniture, appliances, bedding, kitchen ware, etc.) as taxable business personal property.
- ABC, Inc. went out of business and now XYZ, Inc. is using ABC’s business personal property. Can we go after XYZ for old taxes on that personal property?
Probably not. Personal responsibility for taxes on personal property is limited to the listing owner of the property. GS 105-365.1. In this case, ABC, Inc. would be the listing owner for the old taxes on the business personal property now possessed by XYZ, Inc.
There is no “successor liability” for taxes on personal property as there is for real property, with one exception. The “going out of business” provision in GS 105-366(d) allows a tax collector to pursue delinquent tax collection against the purchaser of certain types of business personal property within six months of the transfer of that property. But that exception applies only to “merchants and retailers” and their “goods, materials, supplies, or fixtures.” It does not apply to businesses that are engaged in activities other than manufacturing or retailing. Nor does it apply to machines, equipment, furniture, or other common types of business personal property.
For example, GS 105-366(d) would not apply to delinquent taxes owed on mowers and tractors transferred from one landscaping business to another. The purchasing company would be responsible only for future taxes on the equipment and would have no liability for old delinquent taxes on that equipment.
For corporations that have gone out of business and dissolved, the collection of old taxes is often difficult. Neither the owners of a corporation nor its officers can be held personally liable for tax obligations of that corporation. For more on collecting taxes owed by corporations, please see this blog post.
- We’ve sent a tax file to our attorney to start the foreclosure process. Can we require the taxpayer to pay those attorney fees?
Not unless a foreclosure complaint has been filed under GS 105-374 or a foreclosure judgment has been docketed under GS 105-375. Attorney fees may be charged to a taxpayer only when a court proceeding has been initiated. Prior to the filing of a complaint or docketing of a judgment, no attorneys fees may be charged to the taxpayer.
The fact that a foreclosure attorney has started pre-foreclosure work such as a title search does not entitle the local government to charge the taxpayer for that work. The taxpayer still retains the right to stop that foreclosure by simply paying all taxes, interest, and other fees (such as advertising or bad check fees) owed on the account, without any obligation for attorney fees. Depending on the agreement between the local government and the attorney, the local government may be on the hook for the bill for the attorney’s pre-foreclosure work. But the taxpayer isn’t. See this blog post for more.
