Check the fine print: Ask for money back when you turn in a license plate
Posted April 28, 2016
Raleigh, N.C. — Ever sold, traded or totaled a car? You may be entitled to a refund on the property taxes you paid for the year ahead.
Yvonne Matthews was one of thousands of drivers who had no idea.
"I've probably asked 40 to 50 people. They're not even aware of this," Matthews said.
Matthews found out about the little-talked-about refund when she returned a tag for her son's 2003 Honda Accord.
"I said, 'Wouldn't it be nice if you can get some of your money back where he's already paid his taxes?'" Matthews told the DMV worker. "The young lady looked at me and said, 'Well, you can go by the Johnston County tax office.' I said, "Really? Thank you!'"
Matthews got $18 back, and asked herself: "What if this had been a 2013 or 2015, how much money would we have gotten back?" she said.
Wake County Revenue Direction Marcus Kinrade says the refund amount is based on vehicle value and the months left on a paid registration. Under state law, it's up to taxpayers to apply for a refund within a year of turning in a tag.
"The few times I've sold a vehicle and turned in the tag, I requested a refund. I mean, I wanted my money back, too," Kinrade said. "There's always been a question of why isn't it just automatic, and that's a good question."
Kinrade says the biggest reason for that problem is the DMV's outdated computer system, which can't connect to the North Carolina Department of Revenue or county tax offices to access the information needed to process refunds.
"If there's no automated way to figure out what that data is, you have to get someone to actually manually go in and try to find those," Kinrade said. "We have 850,000 vehicles in Wake County. It's not possible."
A spokeswoman for the DMV says the computer software hasn't been updated since the 1990s, and the agency has no plans in place to make updates
Information about refunds is written on the back of vehicle registration and tax notices, and when drivers turn in a tag, the DMV receipt notes that drivers should keep the receipt to "process a possible release or refund of property taxes."
Many people either don't see the small print or don't understand it. 5 On Your Side's investigation found that, in 2015, the DMV got almost 882,000 tags back. The agency doesn't keep track of how many taxpayers qualified for a refund and could not provide information for us to figure it out. But we tracked down numbers from the NC Department of Revenue. We found for the 2015 fiscal year, only 63,854 refunds were issued.
That's about 7 percent of the number of tags returned. The average refund for most drivers is about $50, plenty were more than $500.
5 On Your Side contacted DMV to find out why staff don't mention the possibility of refund when the tag is returned.
Despite our repeated requests, DMV Commissioner Kelly Thomas would not talk with us on camera. In a phone call, Thomas said the agency needs to "make efforts to get money to the people." Thomas also said the DMV has "no problem" reminding drivers of the process by either telling them or providing more specific written information.
Kinrade agrees that those two measures could help, but he also said it's time for the state to update its computer system, change current law and make the refunds automatic.
"I don't see any reason why it can't be done, other than getting it done," he said.
Matthews said she feels for the drivers who don't know.
"I'm just thinking about how much tax money...is being owed to individuals and they're not getting it back because they don't know the process," she said.