Tax & Tag Together Update - Summer 2014 NCLGBA Conference

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Tax & Tag Together Update - Summer 2014 NCLGBA Conference

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Tax & Tag Together Update - Summer 2014 NCLGBA Conference

  1. 1. David Baker, MPA, PPS Director Local Government Division NCDOR State of North Carolina System 1NCLGBA July 17, 2014
  2. 2. Major Issues: Average of 66% of RMV bills are paid on time Average Collection Rates at Fiscal Year End by County Population: RMV Annual Statewide Average 87.22% 97.91% 100,000+ 88.09% 98.37% 50,000 – 99,999 85.37% 96.96% 25,000 – 49,999 84.01% 96.61% 24,999 and Below 84.08% 95.23% *Source: LGC Memorandum #2012-14, 4/17/2012 NCLGBA July 17, 2014 2 Old System: “Billing In Arrears”
  3. 3.  To improve the citizen’s experience: • Reduce the number of government interactions. • Eliminate the need for delinquent collections.  Reduce/share costs: • Duplicate mailings (postage, materials, handling, and so on)  Increase Efficiency of an Existing Tax • Improved collections and revenues. • Improved compliance. Goals of the New System NCLGBA July 17, 2014 3 Goals
  4. 4.  In the new system, property taxes are included with the “invitation to renew”: • Assessor determines value, SITUS, and taxable status of the vehicle in advance – not in arrears. • File is “delivered” to DMV to prepare the invitations to renew the registration. • Taxes must be paid in order to obtain the registration – no partial payments will be allowed. NCLGBA July 17, 2014 4 New System Billing New System Billing
  5. 5. General Rules  DOT fiscal will distribute money by the 10th day of the month following collection.  Counties will distribute revenues to the municipalities and other taxing jurisdictions within the county.  DOT Fiscal will provide gross collections, billing, credit card and debit card costs, and net revenue.  Costs will be extracted.  Costs for the initial mailings were paid from the Special Account as we start the project. NCLGBA July 17, 2014 5
  6. 6. Overall the implementation has gone very good. A few minor defects which are being fixed. A major change but has been accepted by the citizens and other stakeholders. Implementation NCLGBA July 17, 2014 6
  7. 7. The implementation phase closed the end of September. Project was closed out the end of November. Final MOU has been approved and signed by all stakeholders. Update on Project: NCLGBA July 17, 2014 7
  8. 8. Steering Committee has transferred the project over to the Change Control Board. Make up of the Change Control Board  Chairman – David Baker  Six voting members  Group of SME’s  Purpose Update on Project: NCLGBA July 17, 2014 8
  9. 9. VTS Users Group  Made up of all different size counties from across the State.  Contract with VTS vendor will be transferred from NCDOT to NCDOR  NCDOR will work with all stakeholders to improve the system as we move forward. Update on Project: NCLGBA July 17, 2014 9
  10. 10. NCLGBA July 17, 2014 10 Project costs were paid through the Special Fund administered by the State Treasurer: • 3% additional interest. How We Paid For It
  11. 11. Interest Money From January 2006 to June 30, 2013 • $41,713,270.11 collected • Project Budget: $26,000,000 • Project cost: $25,062,346.16 • Money Returned $16,650,923.95 11NCLGBA July 17, 2014
  12. 12. Operational Costs will be passed to the local governments: • Costs will be prorated, based on a given jurisdiction’s contribution to the total of all local taxes/fees. Operational Costs 12NCLGBA July 17, 2014
  13. 13. SB 305  The issuance of a limited registration "T" sticker and the collection of property tax are each considered a separate transaction for which compensation at the rate of one dollar and twenty-seven cents ($1.27) and seventy-one cents ($0.71), respectively, shall be paid by counties and municipalities as a cost of the combined motor vehicle registration renewal and property tax collection system.  $1.06 For the LPA’s for the first months –September – February. 13NCLGBA July 17, 2014
  14. 14. HB 1050 Omnibus Tax Law Changes  The LPA fee for the 2014-2105 fiscal year will be $1.06.  The DMV collection fee will not be changed and will remain at $0.71 for the upcoming year.  The Limited Registration Plate is issued by an LPA fee of a $1.27 will not change for the upcoming year. 14NCLGBA July 17, 2014
  15. 15. Operational Costs  The LPA fee for the 2014-2105 fiscal year will be $1.06.  The $1.06 fee amount is retroactive for the months March 2014 to June 2014 and for any months from March 2014 to the date the DMV is able to implement the additional fee.  For any month that $0.71 was charged will be adjusted to $1.06 and the difference subtracted from future revenues equally over a three month period. The difference has to be calculated by September 1, 2014.  The DMV collection fee will not be changed and will remain at $0.71 for the upcoming year. 15NCLGBA July 17, 2014
  16. 16. 2014-15 Operational Costs An overhead fee is charged on each combined notice and includes but not limited to printing, postage, TEC valuation service, software licenses and maintenance, personnel costs, etc.  Overhead Fee $1.21 Collection Fees  LPA Collection Fee $1.06  DMV Collection Fee $0.71  LRP Issuance Fee $1.27  Credit Card Fee Variable  Debt Card Fee Variable Other Variable  LRP Cost- $0.50 for each LRP notice mailed for taxes due.  CPS- Common Payment Service 0.23 per transaction for payment processing 16NCLGBA July 17, 2014
  17. 17. 17NCLGBA July 17, 2014
  18. 18. 18NCLGBA July 17, 2014
  19. 19. Actual Gross Revenues Collections Month Gross Revenues September $22,867,318.79 October $45,801,194.74 November $42,921,999.66 December $51,147,385.28 January $53,763,540.81 February $56,441,017.63 March $64,191,509.89 April $66,084,464.45 May $67,411,659.22 Total $470,630,090.47 19NCLGBA July 17, 2014
  20. 20. Actual Net Revenues Collections Month Net Revenues September $22,867,318.79 October $44,206,970.11 November $42,139,411.92 December $48,523,666.04 January $51,960,006.06 February $55,484,526.58 March $61,296,290.33 April $64,152,390.42 May $66,352,183.21 Total $456,982,763.46 20NCLGBA July 17, 2014
  21. 21. Old System Collections Gross Revenues Data from Treasurer's Website Statewide Totals 2012-13 Total Revenue $570,960,352.28 2012-13 average collection per month $47,580,029.36 Tag and Tax collection Estimate Gross Revenues Statewide Totals 2013-14 average net collection per month $55,970,346.46 Total Estimated Revenue for 2013-14 $671,644,157.52 Difference (increase) $100,683,805.25 21NCLGBA July 17, 2014
  22. 22. Actual Collections from September 2013 to May 2014 Gross Revenues $447,762,771.68 NetRevenues $434,115,444.67 Expenses $13,647,327.01 Percentage 3% 22NCLGBA July 17, 2014
  23. 23. Estimated 2013-14 Revenues Both Systems 6 monthson old system $285,480,176.14 10 months on new system $559,703,464.60 Total Revenue Both Systems $845,183,640.74 23NCLGBA July 17, 2014
  24. 24. Old system Expenses based on Survey in 2012 County Share $2.65 Municipalities' Share $1.00 Total Cost per Transaction on a $100 tax bill $3.65 24NCLGBA July 17, 2014
  25. 25. Tag and Tax Cost per transaction County Share $1.84 Other units share $0.79 Total Cost per Transaction on a $100 tax bill $2.62 25NCLGBA July 17, 2014
  26. 26. Tax Collection Percentages Tag and Tax System 80% Renewals @100% collection rate 80.00% 20% Issuances @ 85% collection rate 17.00% Statewide Collection Rate 97.00% Old System Statewide Collection Rate 86.20% 26NCLGBA July 17, 2014
  27. 27.  Appeal Loss Report: Displays the effect of the property tax appeals on appraised and assessed value  Assessed Value Report by Renewal Month Displays assessed values for each tax district where the assessed value is the total appraised value minus the total exempt value in each tax district by renewal Period This report is used to estimate number of vehicles and value in each tax district 27NCLGBA July 17, 2014
  28. 28.  Assessed Value Report by Transaction Displays assessed values by payment transaction date  County Net Collection Report By Renewal Month Summarizes the following:  tax income,  tax bill data by fiscal year  tax district  levy type 28NCLGBA July 17, 2014
  29. 29.  County Net Collection Report By Transaction Date Track Net collections for vehicles bills based payment date  County Reconciliation Report Lists all vehicle taxes, fees, and interest collected for each jurisdiction along with total payments, holds, reversed taxes, reversed fees, and reversed interest. Breaks down how much of the total payment was collected by credit card and debit card.  Default Situs Report Identify abstracts billed with default address based on renewal dates  Default Situs Report By Transaction Date Identify abstracts billed with default address based on transaction dates 29NCLGBA July 17, 2014
  30. 30.  Exclusion Report Lists all vehicles that are excluded from taxation based on plate issue dates  Exempt Report Lists all vehicles that are exempt from taxation based on renewal dates NCLGBA July 17, 2014 30
  31. 31.  Finance Report Displays a summary of levy amounts and amounts collected by year and tax district  Gap Billing List all vehicles that have had a new plate issued or has had a new sticker that changes the renewal cycle where one or more months of taxes has been omitted. 31NCLGBA July 17, 2014
  32. 32.  NET Distribution Report List all collections and refunds for a specific date (Date sent to Finance) including over/under amounts NCLGBA July 17, 2014 32
  33. 33.  Not Renewed Vehicle Report List the Abstract number, owner, vehicle description, plate valid through, vehicle value, and amount due for vehicles where the registration has not been renewed, but renewal miss is more than one year. Parameters are: Renewal Period, Tax Year, and Tax Jurisdiction  Pending Refund Report Displays refunds (both pending and authorized) of vehicle tax and fees. 33NCLGBA July 17, 2014
  34. 34. Tax Billing Detail Report Lists VIN, Vehicle info, Bill number, due date, Taxpayer name and address, tax District, levy type and levy amount and then total value and total taxes and fees for all vehicles in the county matching the parameters. If a subset of tax districts are selected it will list each vehicle in that tax district and then all line items including all other tax districts that apply to that vehicle NCLGBA July 17, 2014 34
  35. 35.  Tax Billing Summary Report This report may be used to project the following:  number of vehicles  assessed values  taxes and vehicle fees 35NCLGBA July 17, 2014
  36. 36.  Vehicle Tax Collection Data Displays the following:  Vehicle bill information  Amounts paid  Summary of total taxes and amounts paid by tax district.  Vehicle Tax Collection Date By Transaction Date Tract paid and unpaid tax bills 36NCLGBA July 17, 2014
  37. 37. State Auditor’s Report  IS Auditor in process – results should be out soon.  SOC1 Report 37NCLGBA July 17, 2014
  38. 38. Questions? 38NCLGBA July 17, 2014

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