Transcript Personal Property Tax Relief

Personal Property
Exemptions and Exclusions
Lee Harris
Deputy Assessor
Orange County Tax Office
Terminology
• Exemptions
• Exclusions
• Special Classes of Property
NC Constitution-ARTICLE V FINANCE
• Sec. 2. State and local taxation.
• (1)
Power of taxation. The power of
taxation shall be exercised in a just and
equitable manner, for public purposes only,
and shall never be surrendered, suspended, or
contracted away.
NC Constitution-ARTICLE V FINANCE
• Sec. 2. State and local taxation.
• (2)
Classification. Only the General Assembly
shall have the power to classify property for
taxation, which power shall be exercised only on
a State-wide basis and shall not be delegated. No
class of property shall be taxed except by uniform
rule, and every classification shall be made by
general law uniformly applicable in every county,
city and town, and other unit of local
government.
NC Constitution-ARTICLE V FINANCE
• Sec. 2. State and local taxation.
• (3)
Exemptions.
Property belonging to the State, counties, and
municipal corporations shall be exempt from
taxation.
(cont’d)
NC Constitution-ARTICLE V FINANCE
• The General Assembly may exempt
• Cemeteries
and property held for:
• Educational,
• Scientific,
• Literary,
• Cultural,
• Charitable, or
• Religious purposes
(cont’d)
NC Constitution-ARTICLE V FINANCE
• Every exemption shall be on a State-wide basis
and shall be made by general law uniformly
applicable in every county, city and town, and
other unit of local government.
• No taxing authority other than the General
Assembly may grant exemptions, and the
General Assembly shall not delegate the
powers accorded to it by this subsection.
Exemption Language
• Exemption language is typically similar to this:
– Buildings, the land they actually occupy, and
additional adjacent land reasonably necessary for
the convenient use of any such building shall be
exempted from taxation if…
Special Classes Language
• Special class language is typically similar to this:
– …designated a special class of property under
Section 2(2) of Article V of the North Carolina
Constitution and are excluded from taxation to the
extent provided in this section.
or
– …designated a special class of property under
Section 2(2) of Article V of the North Carolina
Constitution and must be appraised, assessed,
and taxed in accordance with this section.
Magic Language Required?
• While most of the exemptions and special
classes of property have the standard
language identifying them as such, not all do.
• Absence of the classification language does
not prevent the creation of a special class of
property.
Burden of Proof
Every owner of property claiming exemption or
exclusion from property taxes under the
provisions of this Subchapter has the burden of
establishing that the property is entitled to it.
Burden of Proof
An application must contain a complete and
accurate statement of the facts that entitle the
property to the exemption or exclusion.
Applications—When, How Often?
An owner claiming an exemption or exclusion
from property taxes must file an application for
the exemption or exclusion annually during the
listing period, EXCEPT WHEN:
– No Application is Required
– Single Application is Required
Some Exceptions to Listing Period Filing
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Elderly/Disabled:
Circuit Breaker:
Disabled Veterans:
Present-Use Value:
Wildlife Land:
G.S. 105-277.1(c)
G.S. 105-277.1B(n)
G.S. 105-277.1C(f)
G.S. 105-277.4(a)
G.S. 105-277.15
Listing Period Extensions
• Per G.S. 105-307(a), an extended listing period
also constitutes the listing period. Thus
applications may be timely filed during any
extended listing period, either general or
individual.
• General extensions of the listing period:
– The entire period for listing, including any
extension of time granted, is considered the
regular listing period for the particular year.
No Application Required-Exempted
• G.S. 105-278.1
• G.S. 105-278.2
Government property
Burial property
No Application Required-Excluded
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G.S. 105-275 (15)
G.S. 105-275 (16)
G.S. 105-275 (26)
G.S. 105-275 (31)
G.S. 105-275 (32a)
G.S. 105-275 (33)
G.S. 105-275 (34)
Standing timber
Non-business property
Held by manuf for shipment
Intangible personal property
Inventories-contractors
Inventories-manufacturers
Inventories-merchants
No Application Required-Excluded
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G.S. 105-275 (37)
G.S. 105-275 (40)
G.S. 105-275 (42)
G.S. 105-275 (44)
Poultry and livestock
Computer software
Short-term vehicle rentals
Pharmaceutical samples
No Application-Reduced Valuation
• G.S. 105-277 (g)
• G.S. 105-277.9
Solar HVAC system
Roadway corridors
Single Application Required
Once the application has been approved, the
owner does not need to file an application in
subsequent years unless new or additional
property is acquired or improvements are added
or removed, necessitating a change in the
valuation of the property, or there is a change in
the use of the property or the qualifications or
eligibility of the taxpayer necessitating a review
of the benefit.
Single Application Required-Exempted
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G.S. 105-278.3
G.S. 105-278.4
G.S. 105-278.5
G.S. 105-278.6
G.S. 105-278.7
• G.S. 105-278.8
Religious
Educational
Religious & educational assembly
Charitable purposes
Educational, scientific, literary,
charitable, cultural
Hospitals
Single Application Required-Excluded
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G.S. 105-275 (3)
G.S. 105-275 (7)
G.S. 105-275 (8)
G.S. 105-275 (12)
G.S. 105-275 (17)
G.S. 105-275 (18)
G.S. 105-275 (19)
G.S. 105-275 (20)
G.S. 105-275 (21)
Water/sewer associations
Public parks and drives
Recycling, air cleaning, etc
Conservation
Veteran’s organizations
Masonic orders
Fraternal and civic orgs
Goodwill Industries
Repealed
Single Application Required-Excluded
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G.S. 105-275 (31e)
G.S. 105-275 (35)
G.S. 105-275 (36)
G.S. 105-275 (38)
G.S. 105-275 (39)
G.S. 105-275 (41)
G.S. 105-275 (45)
G.S. 131A-21
LHI for gov’t afford. housing
Severed development rights
Repealed
Repealed
Project financing
Art held by State Art Society
Solar energy electric system
Medical Care Comm bonds
Single Application-Reduced Valuation
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G.S. 105-277 (h)
G.S. 105-277.1
G.S. 105-277.4
G.S. 105-277.1C
G.S. 105-277.10
G.S. 105-277.13
G.S. 105-277.14
G.S. 105-277.15
G.S. 105-277.17
G.S. 105-278
Private water companies
Homestead exclusion
Present-use value
Disabled veteran
Precious metals
Brownfields
Working waterfront
Wildlife conservation land
Community land trust
Historic properties
Single Application Required-Misc
• G.S. 105-277.8
Homeowners’ association
What Is a Proper Application Form?
• AV-10 Property Tax Exemption or Exclusion
• AV-10V Motor Vehicle Exemption
• AV-9
Homestead, Disabled Veteran, and
Circuit Breaker
• TC-WQ Water Quality
• TC-AQ Air Quality
• TC-WM Waste Management
Any Other Forms Acceptable?
• Yes, anything written that shows intent to apply
and contains the appropriate information is
acceptable.
“The County was clearly aware of the taxpayer’s
intent and received all of the relevant information
it needed.”
• In re Valley Proteins, Inc., 128 N.C. App. 151, 494 S.E. 2d
111 (1997).
Statute Cite Required?
A taxpayer does not have to cite or make
reference to the applicable statute in order to
claim the applicable exemption allowed by the
section if the application shows facts which
entitle the applicant to the exemption.
• In re R.J. Reynolds Tobacco Co., 74 N.C. App 140, 327
S.E. 2d 607 (1985).
Late Application-Current Year
• An untimely application for exemption or exclusion
applies only to property taxes levied by the county or
municipality in the calendar year in which the
untimely application is filed.
• What? Translation:
– An untimely application must be received by
December 31 of the year for which relief is
requested.
Late Application-Current Year
• Upon a showing of good cause by the
applicant for failure to make a timely
application, an application for exemption or
exclusion filed after the close of the listing
period may be approved by the board of
equalization and review, or if that board is not
in session, by the board of county
commissioners.
Late Application-Prior Years
• Late application for prior years can be considered only
when:
When an owner of property that may be eligible for
exemption or exclusion neither lists the property nor
files an application for exemption or exclusion, the
assessor or the Department of Revenue, as appropriate,
shall proceed to discover the property.
If, upon appeal, the owner demonstrates that the
property meets the conditions for exemption or
exclusion, the body hearing the appeal may approve the
exemption or exclusion.
Review the Application
• Check the application for timeliness,
completeness and sufficient content.
• If the application is timely but lacks sufficient
information, it is reasonable to request
additional information that must be returned
within a specified time period, typically 30
days.
Review the Application
• Review the requirements of the appropriate
statute.
• Does the application indicate that the
property meet the statutory requirements (if
any) for:
– Ownership
– Non-profit status
– Type of property
– Use of the property
Standard of Review
While the courts have consistently held that tax
exemption statutes must be strictly construed
against exemption, they have also held that such
statutes should not be given a narrow or stingy
construction.
• In re Wake Forest Univ., 51 N.C. App 516, 277 S.E. 2d 91
(1981).
Use of the Property
The use of the property, not the use to which
the income of the property is put, determines
exempt status.
• Rockingham County v. Board of Trustees of Elon College
219 N.C. 342, 13 S.E. 2d 270 (1941).
Search the Internet!
• Useful information can often be found
through internet searches:
– Corporate websites
– Newspaper articles
– Presentations to governments, other organizations
– Legal actions
NC Secretary of State
Corporation Search
• Until July 1, 2015:
http://www.secretary.state.nc.us/corporations/
csearch.aspx
• Starting October 1, 2014:
http://www.secretary.state.nc.us/search/index/corp
501(c)(3) Tidbits
• Not all special classes of property require that
the owner be a non-profit.
• 501(c)(3) status is not a guarantee of
exemption or exclusion. All requirements
must be met.
• All 501(c)(3) organizations are non-profit but
not all non-profits are 501(c)(3) organizations.
Misc Issues
• Recycling application requirements
• Solar exclusion requests
• Software exclusion changes