This is a doozy.
I have been looking into the tax laws, scouring as I do to make sense of it all. There is always so much in the laws that is either unspoken or implied. This works to the advantage of those that benefit from taxation or fines.
i will try to break this into digestible sections. It’s a big subject, and there is a lot to grasp that differs from the common belief.
First of all, it is very easy for me to say that private property is not taxable. I can tell you all sorts of reasons why it shouldn’t be… but I am going to show you exactly why it is not. That’s a little more useful, yes? You probably already know it should not be taxed if you are reading this.
Hopefully, you know that the statutes are not written to be clearly understood on first read. If they were, revenues would drop sharply.
From the NC Constitution:
Section 1. No capitation tax to be levied.
No poll or capitation tax shall be levied by the General Assembly or by any county, city or town, or other taxing unit.
Sec. 2. State and local taxation.
(1) Power of taxation. The power of taxation shall be exercised in a just and equitable manner, for public purposes only, and shall never be surrendered, suspended, or contracted away.
(2) Classification. Only the General Assembly shall have the power to classify property for taxation, which power shall be exercised only on a State-wide basis and shall not be delegated. No class of property shall be taxed except by uniform rule, and every classification shall be made by general law uniformly applicable in every county, city and town, and other unit of local government.”
It is clear that this article relates to the funding of state and local government, as it is called “Finance”.
The main take-away from this is that taxation can only be done under uniform rule. There is no “case-by-case” handling of tax decisions.
The juiciest part of this research has been this:
An exemption is when a subject of taxation, over which the County/state has power to tax, has been granted the status of being non-taxable. This status or rule could be changed at any time through legislation.
An exclusion refers to the subject of ownership being non-taxable by nature.
Over and over, we see that an exclusion merely has to be established; if the property is outside of the scope of what is taxable, there is no application needed. One applies for something when that request can be denied. Make sense?
Property Subject to Taxation.
§ 105-274. Property subject to taxation.
(a) All property, real and personal, within the jurisdiction of the State shall be subject to taxation unless it is:
(1) Excluded from the tax base by a statute of statewide application enacted under the classification power accorded the General Assembly by Article V, § 2(2), of the North Carolina Constitution, or
(2) Exempted from taxation by the Constitution or by a statute of statewide application enacted under the authority granted the General Assembly by Article V, § 2(3), of the North Carolina Constitution.”
Continued in part 2…