This page is designed to walk you through the appeal of your individually-owned personal property valuation. It provides basic information necessary to understand the appeals process, as well as any forms or contacts needed to complete the process. Please read through the information below. If you have questions or concerns, contact us at (336) 570-4126.
“WHEN CAN I APPEAL MY PROPERTY?”
In general, personal property values may be appealed within 30 days of receiving notice of tax value (the bill serves as notice). [NCGS 105-317.1(b)] Registered motor vehicles (most cars, trucks, etc.) have a longer appeal window of within 30 days of the due date. [NCGS 105-330.2(b1)]
In addition to appealing the value, sometimes citizens want to prorate a bill if they have not owned it for the full year. Also, rather than an appeal of value, sometimes citizens want to file an exemption for their personal property. These topics are discussed below.
“WHAT IS THE DIFFERENCE BETWEEN AN APPEAL, A PRORATION AND AN EXEMPTION?”
An appeal is appropriate when the tax value assessed does not accurately represent the true market value (what it could be sold for). For more on tax value and market value, please see the section below: “What is Market Value?”
A proration is appropriate when the vehicle was billed for a full year of taxes but sold (and the tag turned in) part-way through that year. Proration generates a refund for the unused months. Proration is done in full month increments, requires the tag to be turned in (not transferred to the new vehicle) and may only be done within one year of transfer. For more information, see “Tell Me About Proration” below.
An exemption is appropriate when the vehicle falls into a special category recognized by the State of North Carolina as eligible for reduced taxation. For more on this, see “Tell Me About Exemptions” below.
“WHAT IS MARKET VALUE?”
The market value is the value in dollars that an informed, willing and able buyer and an informed, willing and able seller would typically agree to buy/sell the property for, given typical market conditions. An auction sale, for example, would not represent market value as the seller is unusually motived to liquidate the property. A sale from father to son would likely not represent market value as the parties may be unusually motivated.
A question that comes up frequently in valuing automobiles is the question of which market value to use. Is it the value of the vehicle if you sell it privately out of your front yard? Is it the value of the vehicle if you trade it in to a dealer? Is it the value of the vehicle if you purchase it from a dealer?
When individuals buy property from another individual’s front yard, there is an expectation of reduced price. Consider: Where do you expect to get a bargain: at a retail store or at a yard sale? Why would you shop at a neighbor’s house with a selection of one vehicle, no financing, no warranty, no maintenance agreement, no CARFAX, and not even the new car smell, when you could shop at a dealership with a wide selection, easy financing, full warranty, onsite maintenance, complete reporting, and a newly cleaned vehicle? In both cases the purchase from a private individual is conducted in order to save money. Private sales are considered to be discount prices and are not true market value.
When a dealer accepts property in lieu of cash they have turned a guaranteed revenue (cash) into a speculative revenue (a vehicle). This vehicle cannot be sold immediately, therefore there are “holding costs,” a kind of reverse interest for the amount of time it takes to sell the car. A certain number of trade-in vehicles will be found to have hidden defects which will cost the dealership to repair. The trade-in vehicle takes up lot space that could be used for a more valuable new vehicle. If the trade-in vehicle is old or has cosmetic problems, the dealer may not want it on the lot “scaring off” customers who want to see new and shiny cars. Finally, if the dealer cannot sell the trade-in vehicle, or “gets in a bind” and has to quickly liquidate the property the only option is the auction market which will discount the price. For all of these reasons, trade-in value will not be the same as true market value. The dealer will only give you a portion of the vehicle’s value at trade-in.
True market value is found at the most commonly paid price for the vehicle: the retail or dealership value. This is the price that most vehicles are sold at and represents a true market rate. Note that this is not the dealer advertised price (sticker price) as any informed buyer will negotiate the sale lower than its listed price. This is also not the dealer’s “bottom number” (the true minimum the dealer can afford to sell for) as most buyers will never reach this bottom number. This is not an “inventory clearance / going out of business super-sale” value as the dealer is unusually motivated to provide below market prices. This is the most typical negotiated price that an informed, willing and able buyer and an informed, willing and able seller will agree on.
Major publications such as the Kelley Blue Book and the NADA Manual research countless sales to determine what a typical sale amount is for each make, model and year. You will frequently see estimates for Private Sale, and Trade-In values because the subscribers to these publications may need that information, but you will always find that Retail Sale or Dealer Sale in these price guides is a higher figure. It is this Retail or Dealer sale that represents true market value and should be compared to our tax value.
If you find that the Blue Book or NADA value for Retail or Dealer sale is significantly lower than our tax value, please let us know. All counties in the State of North Carolina use a valuation service called TEC Data Systems which is usually very close to the Blue Book and NADA values. However, when there is a discrepancy, we welcome a second opinion and would like to know of your concern. (see “How Do I Start the Appeal Process?” below to get started)
“MY PROPERTY HAS HIGH MILEAGE, BODY DAMAGE, IS A SALVAGE VEHICLE, NEEDS REPAIR, ETC.”
Beyond just applying a price guide, some items of personal property need adjustment due to condition. If you have never contacted us about the condition of the vehicle, then odds are good that we don’t know. See “How Do I Start the Appeal Process?” below to find out how to inform us of this concern.
“TELL ME ABOUT PRORATION.”
Proration only applies to registered motor vehicles. Proration can only be given if the tag was turned in. Transferred, retained or lost but unreported tags will block proration. A proration can be done when the taxed vehicle was sold/reposed midway into the tax year. We may only prorate for full months. That means that even if you only owned the vehicle a few days out of a month you will still have to pay taxes for that full month. However, any months that you had no days in ownership would be subject to refund.
Three important limitations: [NCGS 105-330.6(c)]
- The vehicle must be transferred to another owner or moved out of state and registered in its new location.
- The tag must be turned in to the DMV. (Transferred, retained or lost-but-unreported tags will block proration.)
- The receipt (FS-20) from the DMV must be presented within one year of tag turn-in.
The limitations above are not the policy of the Alamance County Tax Department, but rather the Law of the State of North Carolina to which our department must conform.
If you feel that you qualify for a proration, please contact our office immediately to get the process started.
“TELL ME ABOUT EXEMPTIONS.”
Exemptions on registered motor vehicles must be filed within 30 days of the due date. [NCGS 105-330.3(b)] Exemptions on all other personal property must be filed during the month of January each year. [NCGS 105-282.1(a)]
Exemptions for individually-owned personal property include:
- Antique Automobiles [NCGS 105-330.9]
- Antique Airplanes [NCGS 105-277.12]
- Vehicles Specially Equipped for Disabled Veterans [NCGS 105-275(5) and (5a)]
- Property Used for Religious Purposes [NCGS 105-278.3]
- Property Used for Educational Purposes [NCGS 105-278.4]
- Property of Religious Educational Assemblies Used for Religious and Educational Purposes [NCGS 105-278.5]
- Property Used for Charitable Purposes [NCGS 105-278.6]
- Property Used for Educational, Scientific, Literary, or Charitable Purposes [NCGS 105-278.7]
- Property Used for Charitable Hospital Purposes [NCGS 105-278.8]
- Property Owned by Military Personnel Having a Different Home of Record [50 USC App 571(d)]
As the requirements and specific qualifications of these exemptions vary, it is important to contact our office and discuss the exact details of the exemption that may apply to your property.
“HOW DO I START THE APPEAL PROCESS?” [NCGS 105-317.1(c)]
Before you begin the formal appeal process, a logical first step is to notify our department of your concern. Our Individual Personal Property staff will review your concern and may be able to make corrections “on the spot.”
If our staff cannot address your concern to your satisfaction, you should begin the appeal process. This process begins with a written letter of appeal addressed to the Tax Administrator. The Tax Administrator will review your concern and make a decision regarding your case.
If you are unsatisfied with the Tax Administrator’s decision regarding your property value, you have 30 days from the date of the Administrator’s decision to request review from the Board of Equalization and Review. This should be a written request, signed and dated, to avoid any confusion as to the validity of the appeal. The Board of Equalization and Review is a five-member board appointed by the County Commissioners. The Tax Administrator serves as Clerk to that board and will schedule a hearing. At the hearing, evidence will be submitted by both the appellant and the department and the board will render a judgment.
Decisions by the Board of Equalization and Review may be further appealed to the North Carolina Property Tax Commission, the NC Court of Appeals, and ultimately, the NC Supreme Court.
“HOW DO I CONTACT YOU?”Individual Personal Property Section Phone: (336) 570-4126
E-Mail: tax.help[at]alamance-nc[dot]com Address: 124 West Elm Street Graham, NC 27253