Deal Pack Blog

Recent Tax Changes for Dealers in North Carolina

Effective October 1st, 2014, Auto Dealers in North Carolina need to be wary of the taxes due at signing. Under Section 34.29 of Senate Bill 402, Dealer Admin and Doc fees are now taxable as are any other fees described in GS 20-101.1 (administrative, origination, documentary, procurement, or other similar administrative fees). The tax rate is 3% for all vehicles for which a certificate of title is issued. There is a maximum for commercial vehicles in either class A or B of 3% up to the amount of $1000.00 and a maximum for recreational vehicles of 3% up to the amount of $1,500.00.

In addition, any amount of a payment made by the purchaser, renter or lessee of a retail vehicle that goes towards the tax on and or the cost of a vehicle service contract must be listed separately on documents such as monthly billing statements.

One last recent change to keep in mind for your customers is the addition of the annual electric vehicle tax effective January 1st, 2014. As electric vehicles get older, many are likely to end up on used car lots and customers may not be aware of the annual $100.00 fee for these vehicles in addition to any other registration and property tax amounts due.

North Carolina is one of five states currently charging an extra fee for all-electric vehicles. The other four are Washington, Colorado, Virginia and Nebraska. These states enacted this tax because these vehicles don’t use gasoline and therefore aren’t subject to gas taxes. As gas taxes go towards road construction costs, the states are trying to recoup these amounts through the electric vehicle tax.

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