AG 2000 10 16 - Laserfiche WebLink

Home Browse Search

North Carolina Depmlment of Revenue James B. Hunt, ~r. Governor June 16, 2000 Muriel K. Offerman Secretary MEMORANDUM TO: County Assessors FROM: David B. Baker, Property Valuation Specialist II Property Tax Division RE: SB 1076 - Tax on the gross receipt from short-term le. ase or rental. This is in response to the meeting on June 8th concerning SB 1076. This bill which becomes effective July 1, 2000 exempts motor vehicles held for short term lease or rental and replaces the property tax on these vehicles with a tax on the gross receipts of up to 1.5% from the same vehicles. All answers, examples, and forms in this memo are written as if the taxing unit is levying the maximum 1.5% tax on the gross regeipts allowed by law. The gross receipt tax is optional but the property tax exemption created by this bill is not. Below is a series of questions'and answers to help explain the new law and how to implement the exemption as well as the new tax on gross receipts. We are mailing this to all 100 counties and asking each county assessor to provide this to the appropriate departments in their county as well as to any municipality for which your county is not going to collect the new tax on gross receipts. There have been several technical problems identified with this new law. The amendments to correct these should be passed in the current session of the General Assembly. The following discussion of the bill is provided as if the technical changes.have been made. What does the bill exempt and as of when? This bill adds a new subdivision to G.S. 105-275 which exempts all vehicles that are offered at retail for short-term lease or rental and are owned or leased by an entity engaged in the business of leasing or renting vehicles to the general public for short-temi lease or rental. The bill defines a short-temt lease /)i_rental as one that is less than 365 continuous days. This exemption becomes effective for taxes imposed for taxable years beginning on or after July I, 2000. The exemption part of this bill under 105-275(41) is not optional. For the 2000 tax year going forward any vehicle, which is held for short-term rental or lease is exempted from property tax and should not be billed. Most of these vehicles would have been listed in January as non- classified motor vehicles pursuant to G.S. 105-330.1. These vehicles include the car rental companies as well as truck rental companies such as U-hual, Ryder, Penske, Budget, etc. The vehicles, which were listed in January, should not be billed for property taxes this year going forward. Any long term leased vehicles owned by these companies would still be subject to P. O. Box 871, Raleigh, North Carolina 27602-0871 State Courier 51-71-00 An Equal Opportunity Employer