Personal Property Tax
Listing & Collection Issues
Chris McLaughlin
Assistant Professor, UNC SOG
[email protected]
919.843.9167
Football Follies
2
In 2012, the UNC football team will
lead the ACC in which category?
25%
25%
25%
3.
or
2
vi
o
NC
AA
Sh
a
m
cl
la
as
tio
ns
.
se
s.
Wins.
Sham classes.
NCAA violations.
2 or 3.
W
in
s.
1.
2.
3.
4.
25%
3
At least we lose honorably.
4
Connection Between
Appraisals, Listings, and Collection
• Liens on Real Property
• Responsible Taxpayer
5
What is a Lien?
• The right to satisfy a debt out of a
particular piece of property
• Lien be created by:
– Contract
– Court order
– Statute
6
When Do
Property Tax Liens Attach?
• GS 105-355
• Real Property: January 1
– No recording or filing required
• Personal Property: date of levy
– No lien on PP until collector seizes it!
7
Liens on Real Property
• They include:
– Taxes on RP itself
– Taxes on personal property owned by same
taxpayer in the same jurisdiction as Jan. 1
(GS 105-355(a))
• They do NOT include:
– Taxes on RMVs (GS 105-330.4(c))
– Taxes on other parcels of real property
8
Liens on Real Property
• Required for foreclosure
• Survive transfer
• Super-priority
– Paid before mortgage liens
9
Trump Comes to Town
10
11
12
13
The Village People!!
14
15
Taxes on which of the following property create a
tax lien on Trump’s Dare County beach “cottage”?
20% 20% 20% 20% 20%
bo
a
Th
e
Hi
s
20
12
Co
rv
et
te
re
gi
tm
st
o
...
Hi
o
r
sV
ed
ill
in
ag
Da
eP
r ..
Th
eo
.
e
pl
Ch
e
al
ar
bu
lo
tte
m
...
pe
nt
ho
us
e.
Al
..
lo
ft
he
ab
ov
e.
1. His 2012 Corvette registered
in Dare County .
2. The boat moored in Dare
County.
3. His Village People albums
kept at the “cottage”.
4. The Charlotte penthouse
apartment.
5. All of the above.
16
Liens on Personal Property
• Attachment and Garnishment:
– Any $$ owed to responsible taxpayer
– Wages, bank accounts, rents
• Levy and Sale
– Any tangible personal property owned by
responsible taxpayer
– Collector must seize and secure
– Does not need to be the property that
generated the delinquent taxes
17
Who is the
Responsible Taxpayer?
•
Taxes on Personal Property:
(previous) Jan. 1 listing owner.
•
Taxes on Real Property:
record owner on date taxes
became delinquent (Jan. 6)
and all subsequent owners
Trump sells his beach house to Paris Hilton
in December 2012. The 2012 property taxes
20% 20% 20%
become delinquent. May the20%tax20%collector…
o.
..
3.
ft
he
ab
2&
An
yo
t..
.
on
se
Fo
re
clo
se
ll P
Le
vy
&
&
se
ll T
...
a.
..
Seize & sell Trump’s boat.
Levy & sell Paris’ Hummer.
Foreclose on the house.
2 & 3.
Any of the above.
Se
ize
1.
2.
3.
4.
5.
19
Trump sells his boat to Coach K in
December 2012. The 2012 property taxes
on the boat become delinquent. May the tax
collector…
..
th
e
of
Al
l
sh
20%
ab
o.
2
&
...
3.
20%
Co
d
an
Se
ize
20%
ac
h
se
ll.
..
T.
se
ll
&
Se
ize
20%
..
20%
Ga
rn
i
1. Seize & sell Trump’s
Corvette.
2. Seize and sell the boat.
3. Garnish Coach K’s wages.
4. 2 & 3.
5. All of the above.
20
Listing and Collections
• May correct names of listing taxpayers at
any time retroactively without time limit
– GS 105-302(b) and 105-306(b)
• Discoveries are a tax for the fiscal year in
that opens in the calendar year of the
discovery is made
– GS 105-312(i)
21
Listing and Collections:
Scenario 1
• Trumps fails to list his speed boat for taxes
in 2012, 2013 and 2014.
• Trump sells his boat to Coach Roy in
2014.
• Boat discovered in late 2014.
22
Whose name should be on the
discovery bill?
33%
33%
33%
.
Bo
th
Ro
y.
ch
Co
a
Tr
um
p.
1.Trump.
2.Coach Roy.
3.Both.
23
If the discovery bill is not paid,
who is responsible for those
taxes?
33%
33%
33%
.
Bo
th
Ro
y.
ch
Co
a
Tr
um
p.
1. Trump.
2. Coach Roy.
3. Both.
24
Listing and Collections:
Scenario 2
• Trump builds a 10,000 sq. ft. boat house
on his Dare County property in 2012.
• He never lists the boat house for taxes.
• Trump sells house to John Edwards in
2014.
• Boat house discovered in 2015.
25
Whose name should be on the
discovery bill?
33%
33%
33%
.
Bo
th
.
ar
ds
Ed
w
Tr
um
p.
1.Trump.
2.Edwards.
3.Both.
26
If the discovery bill is not paid,
who is responsible for those
taxes?
33%
33%
33%
.
Bo
th
.
ar
ds
Ed
w
Tr
um
p.
1. Trump.
2. Edwards.
3. Both.
27
Listing and Collections:
Scenario 3
• Trump has never listed his boat for taxes.
• In 2012 Trump sells his beach house to
Dean Smith.
• Boat discovered in 2013.
28
Is the discovery bill for the boat
a lien on the beach house?
50%
50%
No
Ye
s
1. Yes
2. No
29
Personal Property Discoveries
Following Sale of Real Property
• GS 105-306(b) states that listing records
can be changed retroactively
• GS 105-355 states that liens can arise
retroactively when corrections are made
• But . . . GS 105-312 states that
discoveries are considered part of the levy
for the fiscal year that opens in the
calendar year of discovery (not retroactive)
30