'As a taxpayer, it bothers me': How to tell if you are paying too much for your car taxes

Wednesday, August 9, 2023
When Phil Jones found out how much he owed in vehicle taxes, he was shocked.

"I had done my best to prepare financially and mentally for what to expect at the end, and I was still off by a good amount: several hundred dollars," he said.
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He and his family moved to North Carolina from Florida last year. For just one car, they owed nearly $400 in taxes; a big increase from what they paid in Florida.

Jones said as he looked closer at the bill, he started having questions, specifically about his 2019 BMW.

The state estimated the car was worth $43,630, but when Jones used online sites to calculate its blue book value, it didn't match up. Online sites, valued his car at $37,000. He said multiple estimates from dealers also valued the car between $36-38K.

The price difference in the value of his car would mean he'd owe around $36 less in taxes. Jones thinks the difference stemmed from the state's method of not accounting for a car's mileage and use of data from the prior year.



"As a taxpayer, it bothers me for two reasons. One is I'm paying tax on a value that used to be, not on today's value. And secondly, as a taxpayer, we're funding the use of this third-party firm and it's providing, in my opinion, stale data," Jones said.

This isn't the first time the state's methodology for valuing cars and establishing taxes has come under scrutiny. In fact, nearly 10 years ago the ABC11 I-Team looked into this issue.

Multiple residents complained to ABC11 about their vehicles being valued too high and consequently costing them more in taxes. Nearly 10 years later, the state is using the same system and residents have the same concern.

"If you think about how many millions and millions of vehicles that are registered in North Carolina, if everybody's being overtaxed by even $10 per vehicle, that's a meaningful amount of money to the citizens," Jones said.
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The state contracts with a third party called TEC Data Systems that uses multiple factors to value a car including sales data provided by NCDMV. Ultimately, the North Carolina Department of Revenue said the value is based on what a dealer 'could' sell the vehicle for.

"There's not enough time for the counties to appraise each individual vehicle. So the values are done as a mass appraisal," explained Michael Connolly, the assistant director of local government at NCDOR.



This process means that values are based on the car being in average condition.

"If they have excessive mileage or some damage to the vehicle, those are things that county assessors are probably not going know about. The taxpayers have got to bring that to their attention," he said.

Car owners do have the option to appeal their car's value through the county's assessor's office. Owners with high mileage can provide the county with a statement from an odometer specialist or state inspection statement that shows the mileage from the first of the year.

Wake County's website also states that appeals can be filed based on significant damage. Bill of sales, written appraisal from a dealer and repair estimates are all listed as acceptable documentation. However, blue book values, offers from dealers and bill of sale from private sellers won't cut it during an appeal.

"Doing over a million vehicles every year, the system works extremely well for those few taxpayers that do have issues. We do recommend that they appeal to the local level," Connolly said.



The I-Team requested appeal data from local counties.
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Johnston County said it received 135 appeals and approved 88% of them for the past two fiscal years.

In Cumberland County, 77 residents appealed their values in 2022 and 2023. These appeals resulted in a $255,151 reduction in value for the collective vehicles in question.

Connolly said that even though these appeals get approved, that doesn't mean the system isn't working for residents.

"We're using mass appraisal, so we've always been a little bit potentially higher on some vehicles and lower on some vehicles," he said.

Jones did file an appeal in Henderson County and took the appeal all the way to a hearing; but still, they ruled against him.



Seventy-two other residents appealed in the county in 2022 and 75% won, which led to an average decrease in vehicle valuation of $5,205 and a tax reduction of around $30.

If drivers are denied at the county level, they still have the option to appeal to the Property Tax Commission.

You can check your estimated car taxes here.

You can find the process to appeal on your local county's website:
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