WECT Investigates: County revises car tax policy

Published: Mar. 2, 2016 at 6:51 PM EST
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NEW HANOVER COUNTY, NC (WECT) - A New Hanover County man who was upset with his car tax bill didn't let the issue drop when the county tax department dismissed his concern over their tax policy. Instead, Ned Pitts contacted WECT, we contacted Senator Michael Lee, and New Hanover County has now changed its policy in an effort to be more fair to taxpayers.

Over the years, we've done reports about a controversial classic car tax that many of you considered unfair. When a car turns 25-years-old, the New Hanover County Tax Department automatically revalues it as a classic which significantly and often incorrectly inflates the assessed value of the car

Pitts is the original owner of a 1988 Volvo station wagon. It still runs great, but you don't have to look very hard to see rust and other evidence it hasn't been restored to its original condition.

"It's just an old car that's just a commonplace kind of car," Pitts said, describing his vehicle. "It's not the kind of car you think would be a classic."

The car was worth $710 the first time the county sent Pitts a bill using classic car estimates to calculate its worth. That inflated the car's tax value to over $9,000.

"I thought at first it was just a mistake, and when I called up the tax office, they said 'Oh no, when a car hits 25-years-old it is automatically classified as a classic vehicle,'" Pitts recalled.

Pitts appealed and his car tax bill was reduced. But the next year, he got another bill in the mail which had reverted the car's assessed value back to over $9,000.

"The way they do it, every year, the value sets back up to the higher value," Pitts said. "You've got a large group of people out there that have been taken advantage of, and a lot of them, I'd say the majority of them, don't know they could appeal this."

Fed up, Pitts called us, and told us about some state statutes on antique cars he'd uncovered that were potentially at odds with the county's classic car tax policy. We called State Senator Michael Lee, who did some research of his own and reached out to the county.

"Senator Lee had been perhaps looking into it and expressed perhaps some concern with how we were doing it," New Hanover County Manager Chris Coudriet said. "What we were doing was acceptable, but not necessarily in the best interest of the taxpayer or the most fair to the taxpayer."

The county has now changed its procedure. Moving forward, they will send out letters to residents who have cars over 25-years-old, warning them their cars will be assessed as classics before the tax bill is even generated. That should help tax payers recognized a potentially inflated valuation, and give them more time to challenge it.

"I feel like we've made a good change on that front," Coudriet said of the revised policy. "We are assuming it's a classic, but we are giving the taxpayer the opportunity [to challenge that] before that tax bill is in their mail box."

So can you get a refund if you've already overpaid without realizing it? Unfortunately not. The county says state law won't allow tax refunds unless there was an illegal tax. While many may question the fairness of the classic car tax, the county says it is not illegal.

This automatic revaluation of old cars as classics generates about $100,000 a year for New Hanover County, judging by a monthly figure provided to us by the county manager.

We've reached out to surrounding counties to see if they automatically revalue cars as classics at 25-years-old. Brunswick and Bladen Counties do not. We are still waiting for a response from Columbus and Pender Counties.

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