NC Property Tax Definitions

This is called the Machinery Act, and provides the basis for property taxation in NC, laying the ground rules.

“SUBCHAPTER II. LISTING, APPRAISAL, AND ASSESSMENT OF PROPERTY AND COLLECTION OF TAXES ON PROPERTY.

Article 11.

Short Title, Purpose, and Definitions.

§ 105-271.  Official title.

This Subchapter may be cited as the Machinery Act. (1939, c. 310, s. 1; 1971, c. 806. s. 1.)

§ 105-272.  Purpose of Subchapter.

The purpose of this Subchapter is to provide the machinery for the listing, appraisal, and assessment of property and the levy and collection of taxes on property by counties and municipalities. It is the intent of the General Assembly to make the provisions of this Subchapter uniformly applicable throughout the State, and to assure this objective no local act to become effective on or after July 1, 1971, shall be construed to repeal or amend any section of this Subchapter in whole or in part unless it shall expressly so provide by specific reference to the section to be repealed or amended. As used in this section, the term “local act” means any act of the General Assembly that applies to one or more counties by name, to one or more municipalities by name, or to all municipalities within one or more named counties. (1939, c. 310, s. 1802; 1971, c. 806, s. 1; 1991, c. 11, s. 1.)

§ 105-273.  Definitions.

The following definitions apply in this Subchapter:

(1)        Abstract. – The document on which the property of a taxpayer is listed for ad valorem taxation and on which the appraised and assessed values of the property are recorded.

(2)        Appraisal. – The true value of property or the process by which true value is ascertained.

(3)        Assessment. – The tax value of property or the process by which the assessment is determined.

(3a)      (Effective for taxes imposed for taxable years beginning on or after July 1, 2010. See note for repeal.) “Builder” means a taxpayer licensed as a general contractor under G.S. 87-1 and engaged in the business of buying real property, making improvements to it, and then reselling it.

(4)        Repealed by Session Laws 1973, c. 695, s. 15, effective January 1, 1974.

(4a)      Code. – Defined in G.S. 105-228.90.

(5)        Collector or tax collector. – A person charged with the duty of collecting taxes for a county or municipality.

(5a)      Construction contractor. – A taxpayer who is regularly engaged in building, installing, repairing, or improving real property.

(6)        Corporation. – An organization having capital stock represented by shares or an incorporated, nonprofit organization.

(6a)      Discovered property. – Any of the following:

a.         Property that was not listed during a listing period.

b.         Property that was listed but the listing included a substantial understatement.

c.         Property that has been granted an exemption or exclusion and does not qualify for the exemption or exclusion.

(6b)      Discover property. – Determine any of the following:

a.         Property has not been listed during a listing period.

b.         A taxpayer made a substantial understatement of listed property.

c.         Property was granted an exemption or exclusion and the property does not qualify for an exemption or exclusion.

(7)        Document. – A book, paper, record, statement, account, map, plat, film, picture, tape, object, instrument, or any other thing conveying information.

(7a)      Failure to list property. – Any of the following:

a.         Failure to list property during a listing period.

b.         A substantial understatement of listed property.

c.         Failure to notify the assessor that property granted an exemption or exclusion under an application for exemption or exclusion does not qualify for the exemption or exclusion.

(8)        Intangible personal property. – Patents, copyrights, secret processes, formulae, good will, trademarks, trade brands, franchises, stocks, bonds, cash, bank deposits, notes, evidences of debt, leasehold interests in exempted real property, bills and accounts receivable, or other like property.

(8a)      Inventories. – Any of the following:

a.         Goods held for sale in the regular course of business by manufacturers, retail and wholesale merchants, and construction contractors. As to retail and wholesale merchants and construction contractors, the term includes packaging materials that accompany and become a part of the goods sold.

b.         Goods held by construction contractors to be furnished in the course of building, installing, repairing, or improving real property.

c.         As to manufacturers, raw materials, goods in process, finished goods, or other materials or supplies that are consumed in manufacturing or processing or that accompany and become a part of the sale of the property being sold. The term does not include fuel used in manufacturing or processing and materials or supplies not used directly in manufacturing or processing.

d.         A modular home as defined in G.S. 105-164.3(21b) that is used exclusively as a display model and held for eventual sale at the retail merchant’s place of business.

e.         Crops, livestock, poultry, feed used in the production of livestock and poultry, or other agricultural or horticultural products held for sale, whether in process or ready for sale.

(9)        List or listing. – An abstract, when the term is used as a noun.

(10)      Repealed by Session Laws 1987, c. 43, s. 1.

(10a)    Local tax official. – A county assessor, an assistant county assessor, a member of a county board of commissioners, a member of a county board of equalization and review, a county tax collector, or the municipal equivalent of one of these officials.

(10b)    Manufacturer. – A taxpayer who is regularly engaged in the mechanical or chemical conversion or transformation of materials or substances into new products for sale or in the growth, breeding, raising, or other production of new products for sale. The term does not include delicatessens, cafes, cafeterias, restaurants, and other similar retailers that are principally engaged in the retail sale of foods prepared by them for consumption on or off their premises.

(11)      Municipal corporation or municipality. – A city, town, incorporated village, sanitary district, rural fire protection district, rural recreation district, mosquito control district, hospital district, metropolitan sewerage district, watershed improvement district, a consolidated city-county as defined by G.S. 160B-2, or another district or unit of local government by or for which ad valorem taxes are levied.

(12)      Person. – An individual, a trustee, an executor, an administrator, another fiduciary, a corporation, a limited liability company, an unincorporated association, a partnership, a sole proprietorship, a company, a firm, or another legal entity.

(13)      Real property, real estate, or land. – Any of the following:

a.         The land itself.

b.         Buildings, structures, improvements, or permanent fixtures on land.

c.         All rights and privileges belonging or in any way appertaining to the property.

d.         A manufactured home as defined in G.S. 143-143.9(6), unless it is considered tangible personal property for failure to meet all of the following requirements:

1.         It is a residential structure.

2.         It has the moving hitch, wheels, and axles removed.

3.         It is placed upon a permanent foundation either on land owned by the owner of the manufactured home or on land in which the owner of the manufactured home has a leasehold interest pursuant to a lease with a primary term of at least 20 years and the lease expressly provides for disposition of the manufactured home upon termination of the lease.”

Pay CLOSE attention to the construction of these definitions, especially 13:

“(13)      Real property, real estate, or land. – Any of the following:

a.         The land itself.

b.         Buildings, structures, improvements, or permanent fixtures on land.

c.         All rights and privileges belonging or in any way appertaining to the property.

Note how it says, paraphrasing– “Real Property– any of the following: land… buildings… rights and privileges”.

If I say “Breakfast– any of the following: bananas, cereal, or eggs, or rights pertaining to any of those things”, have I defined “breakfast”? Not really. I have given examples of what can be breakfast. In no way does that statement limit bananas, cereal, or eggs. it becomes absurd when you look at it for what it really says.

All of those things can be real property, if they are claimed to be. The presumption made on the part of the county is that it is all taxable. Why? Because if they presumed the opposite, they’d bring in a LOT less of your money. You have to rebut the presumption.

 

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