Personal property tax levy is one of the most complicated delinquent tax remedies. Identifying and locating the taxpayer’s eligible property is often one of the biggest challenges of this delinquent property tax remedy.
The tips below will help you determine whether a delinquent taxpayer’s property is eligible for a property tax levy.
Q: What can you levy against?
A: Tax collectors may issue a tax levy against any personal property currently owned by the delinquent taxpayer, regardless of when they acquired it or whether there are mortgages or other liens on it.
Q: What if the taxpayer transferred ownership?
A: You have the authority to use the tax levy remedy against any personal property transferred by the delinquent taxpayer to:
- Any relative of the taxpayer
- The spouse of a relative of the taxpayer
- A relative of the taxpayer’s spouse
- A spouse of the relative of the taxpayer’s spouse
- Any non-relative as long as the levy is made within six months of the transfer and the transfer was not the result of a bona fide sale for value.
Q: What if the taxpayer is deceased?
A: You may pursue a tax levy against any personal property in a deceased person’s estate as long as you make the levy before the final settlement of the estate.
Q: What if the delinquent taxpayer is a wholesale merchant or retailer?
A: You may pursue a personal property levy against:
- Any goods or fixtures, even if those goods or fixtures have been sold to another person or entity.
- The personal property of the purchaser if taxes are unpaid 30 days after the date of sale or transfer. Beware: you only have a 6-month window after the date of sale to pursue this option. After that, you may only pursue a tax levy against the original goods or fixtures that the purchaser bought.
Q: What if the property has been repossessed?
A: Let’s say, for instance, that the property owner is buying a vehicle, misses some payments, and it is repossessed. G.S. 105-366 states that you may still issue a tax levy against that vehicle until or unless it is sold for cash value.
Q: What if the property tax is due on a partnership property?
A: In this case, you may purse levy on any personal property of either partner. But first, you must meet these criteria:
- You must have sold your taxing unit’s (county/municipality) lien for taxes against the partnership real property, if any exists
- Exhausted both the attachment and garnishment and levy remedies on the partnership’s personal property
- Exercised your taxing unit’s authority under S. 105-364. This statute grants tax collectors the authority to work with other taxing units to collect delinquent taxes in cases where the taxpayer has moved and his whereabouts are known.