Does North Carolina Have a Personal Property Tax on Cars?

All states assess taxes on cars, usually a highway use or sales tax, at the time of purchase and require annual registration fees. A few states require payment of an annual vehicle or property tax on cars. The North Carolina Department of Motor Vehicles and the revenue departments of the state’s 100 counties share information to apply the state’s personal property tax laws.

North Carolina charges an annual personal property tax on cars. The state requires the counties to assess and collect property taxes on cars registered with the Department of Motor Vehicles, or DMV. While each state has its own method for calculating property taxes, not all levy them on cars. While North Carolina does charge the tax, U.S. News & World Report ranks the state as one of the least expensive states in which to own a car.

The Department of Motor Vehicles, or DMV, provides county tax offices with records that list the makes and models of registered cars. County tax assessors use the information to determine the value of the car and calculate the property tax amount. Although all counties assess property taxes at 100 percent of the appraised value of the car, the property tax rates differ among the counties. The tax rates for 2017 to 2018 range from 0.3490 percent in Macon County to 1.0100 percent in Scotland County. Counties also use different schedules for reassessing the value, called revaluation schedules, of cars.

The counties now combine tax and tags into one bill, sent 60 days before the expiration date of the current tags. If you choose to defer payment of your taxes while renewing your tags, you'll receive a sticker that gives you 60 extra days to pay your bill. You might owe a prorated tax amount if you did not own the car for the entire year or if you registered the car in another state.

County tax offices charge interest on unpaid tax bills, 5 percent as of 2019, beginning in the month after the bill is due and continue to add interest monthly until the bill is paid or you reach 25 percent. If your tax payment is late, the county may place a block on your registration renewal. The block prevents the DMV from renewing your registration until you present a receipt showing that the taxes have been paid. The county that placed the block must remove it.