The yearly financial audit of the City of Henderson has revealed to city management that both Henderson’s motor vehicle tax levy and collection rate on motor vehicle taxes has declined sharply since 2006.
In a memorandum dated February 14, 2011, City Manager Ray Griffin writes that he was “shocked” to see that the collection rate for the city’s motor vehicle tax was down to 73.8%. A further inquiry revealed that the city lost 54.5% of its motor vehicle levy during fiscal 2006 and 2007.
During the same time period, the county’s motor vehicle tax collection rate increased from a low of 85.2% to a high of 92.4%.
The loss in value is concurrent with a new registration system initiated by North Carolina’s Department of Motor Vehicles (NCDMV) and the change from a January 1 listing of motor vehicle taxes to one based on the registration date of individual vehicles.
In a council discussion that occurred after the presentation of the fiscal year 2010 audit, Griffin stated that the levy has fallen from $1.1 million in 2005 to approximately $415,000 in 2010. During the same time period, the county saw both modest gains and losses to its motor vehicle tax levy.
The Vance County Tax Office is tasked with the collection of both county and Henderson municipal taxes as one of several jointly funded programs between the city and the county.
Griffin told members that he has been in contact with County Manager Jerry Ayscue and he characterized the response of Ayscue as positive. He also told the council that a board of inquiry is being formed to determine why motor vehicle tax revenues have gone so low.
The city manager speculated that many vehicles were dropped from being listed as domiciled in Henderson when the method of tax listing motor vehicles changed in 2006, and therefore those vehicles have not been taxed.