Recent Blog Posts

  • The Final Four of Tax Questions

    Authored by: on Thursday, April 11th, 2013

    With this week’s men’s and women’s championship games (neither of which featured my beloved Blue Devils, alas), the college basketball season came to a close.  But don’t despair—you won’t need to wait a full year for another Final Four. 

    After much number crunching and bracketology, I’ve identified the four most popular tax questions I get from local governments across the state.  Here they are, listed along with the “region” they won to make it to my version of the Final Four

    Champion of the “[Ir]responsible Taxpayer” Region:

    Can a shareholder be held responsible for taxes owed on a corporation’s property?

    Champion of the “But I Never Owned That Property!” Region:

    When should the tax lien on subdivided lots be released?

    Champion of the “Uh Oh, We Really Messed Up” Region:

    How may a local government recapture property taxes that were never billed?

    Champion of the “I Hate Privilege License Taxes” Region:

    Are non-profit businesses exempt from privilege license taxes?

    The short answers are: probably not, maybe, likely through immaterial irregularity, and maybe.  What’s that you say, a bit more detail would be helpful?

    Read on for my more complete answers to each regional champion question. And feel free to use the comment section to vote for your favorite or offer up another common tax question that you think should be in the running for the overall championship. Read more »

  • What is a Synthetic Project Development Financing (aka Synthetic TIF)?

    Authored by: on Friday, April 5th, 2013

    Merriam-Webster’s online dictionary defines “synthetic,” among other things, as “devised, arranged, or fabricated for special situations to imitate or replace usual realities.” As the definition suggests, a “synthetic project development financing” (more commonly referred to as a “synthetic tax increment financing” or “synthetic TIF”) is a local government borrowing scheme that is “fabricated” to “imitate” a real TIF. If that does not totally clear things up for you read on…. Read more »

  • Denying the Manager a New Contract in Closed Session

    Authored by: on Tuesday, April 2nd, 2013

    A North Carolina city manager’s contract term is ending.  (Or maybe it’s the county manager.  The issues are the same.)  After June 30 she will have no further contract protection.  If she remains employed by the city after that date, it will be in an unadulterated at-will status

    Over coffee, the manager tells the board chair that she would like a new contract for a new two-year period.  At the next scheduled meeting, on the motion of the chair, the board goes into closed session to discuss the performance of the manager (and, really, to discuss whether to enter into a new contract with the manager).  In the closed session, the board decides not to offer the manager a new contract.  That vote result is put into the minutes of the closed session and the closed-session minutes are sealed.

    Two questions immediately arise.  Could the board lawfully make that decision in closed session?  If the newspaper asks a board member about the manager’s contract, may the board member comment on the request and the closed-session contract denial? Read more »

  • NC Appellate Court Defines “Ownership” For Property Tax Exemptions

    Authored by: on Thursday, March 28th, 2013

    Property tax exemptions all begin with the question of ownership.  Only certain types of property owners may qualify for a property tax exemption—governments, educational institutions, and religious congregations, to name a few.  If the property is not owned by a qualifying owner, the property cannot qualify for an exemption even if it is used for an exempt purpose.

    Consider a building used for worship services by a religious congregation.  That building would be exempt under G.S. 105-278.3 only if it were also owned by that religious congregation.  If the religious congregation rented that building from another owner, it would not be exempt. 

    Unfortunately the exemption statutes don’t define exactly what constitutes ownership. Usually the issue is clear, as in the above example. But what about situations in which there is a complicated corporate ownership structure involving both qualifying and non-qualifying owners?  The absence of clear statutory guidance means we need to turn to the courts to resolve those situations.

    The N.C. Court of Appeals recently tackled one of those complicated exemption situations in the Appeal of Blue Ridge Housing case. The March 23 opinion offers for the first time a court-approved test for determining what type of ownership is needed to qualify for an exemption. Read more »

  • Can I See What’s in My Personnel File?

    Authored by: on Wednesday, March 27th, 2013

    North Carolina statutes protect most public employee information from public access. Public employees have the right to inspect almost all of the information in the files their employers maintain about them. The statutes do, however, carve a few types of information that the employer “need not” disclose to the employee or any other person. A recent court of appeals opinion clarifies the meaning of one of those types of extra-confidential information. In Wind v. City of Gastonia the court held that the city was required to allow an employee to inspect records of complaints made about him, including records disclosing the identities of another employee and a citizen who filed the complaints. In reaching this holding, the court ruled that a decision not to pursue disciplinary action constitutes an “official personnel decision” for purposes of the personnel privacy statute, and that the city had no authority to redact the names of the complainants. Read more »

  • Is it a land use yet?

    Authored by: on Wednesday, March 20th, 2013

    In some scenarios, determining land use is fairly simple.  The ordinance permits a donut shop, the owner establishes and operates a donut shop, and the land use is clear.  But land development over time is not always straightforward, and clear land use categories may grow murky as a place evolves.  Questions arise.  When does a use become a use?  How can we distinguish uses?  And when is a use no longer a use?

    This is the first in a short series of blogs on determining land use, starting at the beginning: when does an activity reach the level of regulated (or protected) land use? Read more »

  • Can We Top Off Our Tower?

    Authored by: on Monday, March 18th, 2013

    Update:  Provisions substantially similar to the federal provisions discussed in this post were incorporated into state statutes in 2013.  S.L. 2013-185.  See the update at the end of this post for details.


    Cell tower construction is a hot zoning topic.  The proliferation of smart phones and tablet devices is substantially increasing the demand for wireless data transmission.  Everyone wants good cell phone reception and high quality access for their mobile devices.  But no one wants to look at a cell tower out their back door.  This demand for more and higher quality wireless coverage, combined with widespread concern about the aesthetic impact of telecommunication towers, has sparked a considerable amount of legislation and litigation, not to mention many heated zoning hearings.

    The latest wrinkle in reconciling these competing public interests is a little-noticed provision tucked into 2012 federal legislation extending payroll tax cuts and unemployment benefits.  This law, along with recently released FCC guidance, affects an issue that increasingly arises with cell towers.  Suppose there is an existing, permitted cell tower that was built to the maximum height and size allowed by local zoning regulations.  The tower owner now has an opportunity to lease space to a provider who wants to collocate a new antennae array on this tower, but there is not enough space on the tower for an additional antennae array. 

    If the tower owner applies for a permit modification to add height and new antennae to the tower, this new legislation dictates whether the local government has to approve it.  Can the tower owner top off the tower?  Under the new law, in many instances the answer is yes, the local government will have to approve the modification. Read more »