Confused about NC Vehicle Highway Use (Sales) Tax (inspection, property tax)

[korben dallas]

Back to the original question, as quilterchick alluded to, unless you trade in your car to reduce the total cost (or value) of the new car you're buying, you can't (avoid paying the HUT).

However, re: the PPT to pay after the purchase (which I believe is a bill received about 3 mos later), here's where they get you again, only this time on the assessed value of the vehicle at time of taxing. Fair? Hardly. Cheaper than paying straight out sales tax? Depends.

Consider this: buy a $20k car, @ 7% sales tax you would pay $1,400 now and that's it. Under the NC way, you pay 3% HUT ($600), then pay the ~ 1% or so PPT on it each year, which could be somewhere starting @ $200 the first year and slightly less each year thereafter. So keep the car 4-5 years and you're pretty much paying the man the same money. It's worse for moving here with a car you already paid the sales tax on in another state! And don't get me started on how any state should continue to collect sales tax on the purchase of a car each and every time it gets sold! It's somewhat amazing how these revenue-generating schemes that are put into place are allowed to exist and just continue to get worse (for the taxpayer) over time. Gotta love it.

[arbyunc]

Korben, the point I was trying to make is that the HUT and sales taxes are two very different things. HUT money is restricted for highway use. Sales taxes are used for all sorts of things, including a percentage that's returned to each county's general fund. The government has to generate revenue from somewhere--in NC they get it (partly) from HUT and property taxes. Other states have tolls, or higher permit fees, or special levies, etc. In that regard they are all "revenue-generating schemes" as you call it. Whether it's fair or not probably depends on your personal situation--people who don't own cars likely think it's extremely fair.

[b-dub]

I live in New York, and own a car that I bought in New York in 2012. I'll be moving to NC in a few months.

I know that I'll have to pay a one-time, 3% HUT when I register the car in North Carolina. I just have one simple question:

Is that 3% of what I paid for the car in 2012, or 3% of what the car is worth now? Haven't been able to figure that out based on what I've read so far.

Thanks.

[wheelsup]

Originally Posted by b-dub

I live in New York, and own a car that I bought in New York in 2012. I'll be moving to NC in a few months.

I know that I'll have to pay a one-time, 3% HUT when I register the car in North Carolina. I just have one simple question:

Is that 3% of what I paid for the car in 2012, or 3% of what the car is worth now? Haven't been able to figure that out based on what I've read so far.

Thanks.

3% of the car value currently. However it will most likely be for more than you paid in 2012. No joke. NC has ridiculously high valuations on cars.

[b-dub]

Thanks. I actually bought the car new in 2012 (as in 0 miles on it, it now has about 15K miles on it). Don't know how they could value it for more than what I paid but we'll see.

[rgtoomey]

This tax is NOT segrigated to highway funding. It is designated to Highway and the general fund , but I can not find how much goes where. I anybody can find that info I would love to know it.

[BC1960]

Originally Posted by rgtoomey

This tax is NOT segrigated to highway funding. It is designated to Highway and the general fund , but I can not find how much goes where. I anybody can find that info I would love to know it.

All of the 3% Highway Use Tax goes to the NC Highway Trust Fund:

"§ 105-187.9. Disposition of tax proceeds.
(a) Distribution. - Taxes collected under this Article at the rate of eight percent (8%) shall be credited to the General Fund. Taxes collected under this Article at the rate of three percent (3%) shall be credited to the North Carolina Highway Trust Fund."

The 8% collection relates to short term rental cars.

Chapter 105 - Article 5A

[polcdb]

How does it work it I am moving from out-of-state and already paid the sales tax here. I understand I will have the recurring tax every year, will I have to pay an up front 3% tax as well?

[BC1960]

Originally Posted by polcdb

How does it work it I am moving from out-of-state and already paid the sales tax here. I understand I will have the recurring tax every year, will I have to pay an up front 3% tax as well?

From the NCDMV website:

"If the vehicle is owned for LESS than 90 days before applying for an NC Title, tax credit against the Highway Use Tax due will be allowed for the amount of tax paid to another state, upon submission of proof of payment.

If the vehicle was titled in NC after 90 days of purchase from a dealer, no credit is allowed. Full Highway Use Tax will be due on the purchase price, less any trade-in credit.

If the vehicle is owned for MORE than 90 days prior to registering in NC, you will be taxed on the vehicles value, up to a maximum of $250.00 tax."

https://www.ncdot.gov/dmv/vehicle/title/tax/

[polcdb]

Thank you VERY much for the clarification, thank god for the maximum of $250.00