Exemptions and Exclusions

Following is the legal text describing that all property is taxable unless made exempt by North Carolina law.

§ 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.

(b) No provision of this Subchapter shall be construed to exempt from taxation any property situated in this State belonging to any foreign corporation unless the context of the provision clearly indicates a legislative intent to grant such an exemption.

Summary

Real Property

Property Tax Homestead Exclusion

The greater of $20,000, or fifty percent of the appraised value of real property owned by a North Carolina resident and occupied by the owner as his or her permanent residence is excluded from the taxpayer's assessment, if the following requirements are met:

1. The owner is 65 years of age or older or is totally and permanently disabled.
2. The disposable income of the owner did not exceed $19,700 for calendar year 2005 if applying in 2006, or $20,500 for calendar year 2006 if applying in 2007. The income eligibility limit is adjusted each year by the social security cost-of-living adjustment. The disposable income limit amount includes all moneys received plus the disposable income of the applicant's spouse if they reside together.
3. The owner completes the required application in a timely manner and the assessor approves it.

Disabled Veterans

The first $38,000 in assessed value of housing together with the necessary land therefor, owned and used as a residence by a disabled veteran who receives benefits under 38 U.S.C.§ 2101.

A motor vehicle owned by a disabled veteran (as defined in 38 U.S.C. § 101(2)) that is altered with special equipment to accommodate a service-connected disability as provided in 38 U.S.C. § 3901.

Land Use

The Land Use exclusion is designed for those property owners who grow agricultural, horticultural or forestry products on their land. A county may appraise agricultural, horticultural, and forest land based on their ability to grow crops rather than their market value, provided that the owner qualifies under certain criteria. These criteria include ownership, income, size of the tract in actual production and whether the farm is under sound management. The application for this exclusion must be made with the county assessor's office.

Personal Property

During the past several years, various types of personal property have been excluded from the tax base. These include the following:

1. Household Personal Property such as household furnishings, clothing, and lawn tools not used in connection with a business or for income producing purposes. This does not include motor vehicles, aircraft, mobile homes, watercraft, or engines for watercraft.
2. Manufacturers', Retailers', Wholesalers', and Contractors' Inventory held for sale in the regular course of business.
3. Poultry and livestock, in addition to feed used in the production of poultry and livestock.
4. Certain Computer Software. This exclusion does not include embedded software or software purchased or licensed from an unrelated entity and capitalized on the books of the taxpayer.

By no means is this a complete list of exempted property, but it does include the most recent additions to the exclusions of the local tax base.

Exemptions Applications

Last modified on: 10/31/07 03:53:23 PM.