Is e-Listing Right for Your County?

elisting

From online shopping and banking to e-filing tax returns, the desire to use twenty-first century technology to conduct transactions online is a sentiment felt by consumers and taxpayers across the country – including those in your own taxing jurisdiction. This attraction to conducting business online is why an increasing number of NC tax offices are looking towards the more convenient option of offering electronic listing (e-Listing) services.

“This service saves taxpayers time and expense in the filing process,” according to Durham County’s website, where BPP online listing is already put to use. “The online listing application is easy to use as the text fields for information mirror the fields on the NC State form.” In addition, “taxpayers may also store data so that future listings will have previously entered information and only additions and deletions will need to be entered.”

Not only is e-Listing a convenient and time-saving solution for taxpayers, but counties that provide this service also offer their citizens the option to electronically request an extension on the listing period – creating even more flexibility and satisfaction among their taxpayers.

e-Listing Benefits for Taxpayers

As the convenience of online business turns mainstream, check out the list of ways e-Listing caters to your business taxpayers:

  • Free access
  • Secure database
  • No travel or waiting times
  • Automatic responses & confirmation of completed listings
  • Increased accuracy with prelisted information available
  • Personalized database of clients maintained within the system
  • Ability to enter multiple extension requests simultaneously

e-Listing Benefits for Tax Staff

When taxpayers are happy, your work-life is made easier. Therefore, it should come as no surprise that improving citizen satisfaction through free access to online listing services will, in turn positively affect the way you do business.

Check out the list of additional e-Listing benefits your tax office can enjoy below!

  • Automatic uploads into your county’s existing database
  • Reduced paper and mailing costs
  • Less time processing paperwork
  • Shorter waiting lines in your office
  • Less re-keying of data & reduced keying errors
  • Increased  input value efficiency
  • A secure database of information
  • Increased accuracy year to year

Ideas that reduce your workload and improve taxpayer services are hard to come by, but e-Listing may just be one of those rarities.

For more information on the North Carolina Electronic Listing and Requirements as established by the NCDOR, click here.

Collecting Taxes on Beards?

beard tax

 

Why not?! Peter the Great did during his rule of the Russian empire in 1705 with the spirited hopes of “motivating” his taxpayers to adopt a more clean-shaven style that was becoming popular in Western Europe at that time.

Throughout history, in addition to their typical use as a steady revenue stream providing valuable community resources, there have been a number of intriguing tax laws enacted around the world that deserve a second-look.

These include taxes urging knights into battle, promoting social change, and even one that contributed to a revolution!

Take a look at some of the strangest tax laws ever created abroad:

  • From 1106-1135 during King Henry I rule of England, he allowed knights to opt out of their duties to fight in wars by paying a tax called “scutage”. Some claim that the excessive tax rate was one of the things that contributed to the creation of the Magna Carta, which limited the king’s power.
  • In 1696, England implemented a window tax, taxing houses based on the number of windows they had. That led to many houses having very few windows in order to avoid paying the tax. Eventually, this became a health problem and ultimately led to the tax’s repeal in 1851.
  • In the 1700’s, England placed a tax on bricks. Builders soon realized that they could use bigger bricks (and thus fewer bricks) to pay less tax. Soon after, the government caught on and placed a larger tax on bigger bricks. Brick taxes were finally repealed in 1850.
  • In 1784 England introduced a tax on hats. To avoid the tax, hat-makers stopped calling their creations “hats,” leading to a tax on any headgear by 1804. The tax was repealed in 1811.
  • In 1789, the French had a very unpopular tax on salt called the “gabelle,” which angered many and was one of the contributing factors to the French Revolution.
  • In 1795, England put a tax on the aromatic powders that men and women put on their wigs. This led to a dramatic decline in the popularity of wigs.

 If I were queen for the day I think I would put a tax on every call I receive from a telemarketer – charging double for when I am eating dinner! What would make the top of your list?

Leave your comments in the box below. The most intriguing tax law will be featured in next month’s NL!

Source: http://thediggerer.com/component/k2/item/82-merry-tax-day

New Software Exclusions

software exclusions

NC Senate Bill 490 modified G.S. 105-275(40) to exclude custom software from the property tax base. The additional wordage now reads as follows:

“The foregoing does not include development of software or any modifications to software, whether done internally by the taxpayer or externally by a third party, to meet the customer’s specified needs.”

What Does This Mean?

Beginning in January of 2014, customized software will be viewed as a service. Thus, custom software services rendered will be transactions that are exempt from state sales tax – effectively changing the way that software is taxed in your jurisdiction.

Software that is purchased before customization will still be subject to taxation, but significantly enhanced additions to a commercial piece will not.

The revenue impact of this new exclusion is unknown at this time. However, NC legislators believe that relieving the broad levy on computer software will make North Carolina a more attractive business environment.

Know the Distinction

What classifies as a “customized” software piece will be highly debated, so it is important to understand the distinction between commercial and custom software and the language generally used to describe both:

  • Commercial/Taxable: Off-the-shelf software that is readily available for purchase by the general public and often sold in retail stores (e.g. Microsoft Office, Windows).
    • Prewritten software
    • Canned software
    • Mass marketed consumer software products (e.g. video games)
  • Customized/Not Taxable: Made-from-scratch software & customized software that has substantially modified existing software; often developed for use by a single user or business.

To further distinguish these differences, “…modifications to a prewritten program are treated as custom software and not taxed if the modification costs are separately stated from the canned program cost. If modifications are not separately stated, the total amount is taxed. However, if the modifications are so extensive that the end result is not a modification to a canned program, but rather is a custom program, then the program as a whole is not taxed” (Wei-Ching Kuo 7-8).

It’s possible that the lessened burden on taxpayers will increase growth and decrease transaction costs for software companies in NC, making business use of software less costly. Going forward, be sure to pay close attention to any changes to the computer section of your tax base to develop a more clear understanding of the effect the new exclusion may have on the tax revenue in your jurisdiction.

Source:

Wei-Ching Kuo, John. “SALES/USE TAXATION OF SOFTWARE: AN ISSUE OF TANGIBILITY.”High Technology Law Journal. 1987:  7-8. Web. 5 Dec. 2013. 

The Network Brand: Can Co-opetition Benefit Your County?

co-opetitionDrawing inspiration from Kate McEnroe’s presentation at the NCACC’s annual conference this year, we are taking a look at the fascinating concept of co-opetition. Specifically, we will look at how co-opetition could benefit our local governments through the use of network branding.

What is co-opetition?

Co-opetition describes the concept of cooperative competition, where multiple parties are involved in both a cooperative and competitive relationship at the same time.

It is grounded in “game theory” which approaches business relationships as “games” that can be understood through mathematical models. Co-opetition rejects the idea that marketplace competition always result in winners at the cost of losers. Instead, it argues that all parties in a “game” can benefit by cooperatively adding value to their market and while competing for shares of that larger market.

Applying Co-opetition: Network Branding

Local governments could apply the concept of co-opetition through the use of regional network branding. Network branding refers to a single branding across multiple territories (cities or counties) that leverage the resources of those respective territories into a more attractive package. If we look at local governments as businesses, then the application of these concepts to them are natural extensions of marketing.

The use of network branding isn’t entirely new to North Carolina. For example, the Triangle area of central North Carolina has been a network brand that has existed since the 1950s. By pitching the Triangle area as a whole instead of any of its constituent eight counties separately, the Triangle has successfully attracted many high tech companies into the area.

Benefits of a Strong Network Brand

For local economies, the benefits of a strong network brand are twofold.

First, the network brand provides a more complete package of resources to attract capital investment from companies. Companies will look for a strong workforce pool, existing infrastructure and housing needs for employees among many other factors.

For instance, Raleigh may provide better infrastructure for a company, but Cary or Morrisville may provide better living areas for its employees.  The location of three large universities within the region ensures a skilled workforce pool.

A strong network brand region will not only address more of these needs for prospective companies, it will also provide unity for those local territories in bargaining with those companies. If the network region is selected by the company, the region as a whole will benefit regardless of which territory the company physically resides.

Secondly, a strong network brand will be a boon for tourism. Given the close proximity of attractions and the diversity of many North Carolina regions, tourists can potentially be attracted to the area by the variety that a network branded region can provide. Simply put: no single attraction can accommodate the different interests of tourist families the way an entire region can.

Not so easy…

Implementing a successful network brand is not easy. Drawing lines around a few counties and slapping a label on it can be a more arbitrary identification than political county lines.  If the brand feels artificial or forced on the region, it will not be embraced by the citizens of the region regardless of marketing approaches. So, it is important to create network brands that are natural extensions of already-existing relationships.

Furthermore, there will also be the obvious political barriers to overcome with inter-territorial branding. A high level of cooperation between leaders will be needed to coordinate a successful network branding across municipalities and counties, which can potentially be one of the hardest hurdles to overcome.

However, for regions with an existing unique identity and a solid desire for cooperative improvement, network branding could be the right brand of progress.

Sales Verification Techniques

sales verification

When it comes to the sales verification process, both finding the right contact to verify sales data AND receiving a timely response are not the easiest of tasks – often requiring appraisers to get a bit creative in their verification techniques.

Sales verification should always include a joint effort of both examining real estate transfer documents and qualifying the sales price listed for ratio study purposes.

Check out the list below to see if you are using all of the verification sources and methods available to you.

Buyers and Sellers

If the contact information for a buyer or seller is available, reach out to them directly to qualify a recent sale price. Be prepared, know what questions you plan to ask ahead of time, and clearly explain your reasons for getting in touch.

Contact a buyer/seller using one of the methods below with the following benefits:

  1. Telephone interviews
    • Quick responses
    • Immediate clarification
  2. Personal Interviews
    • Fewer Refusals
    • Reliable information
    • Reveal more unusual or special considerations
  3. Sales Verification Questionnaire
    • An authorized signature or sworn statement
    • Information in writing

If contact details are not provided, try the phone book or stop by for an on-site visit. But, don’t limit yourself to a phone directory – try LinkedIn, Facebook, or a Google search. If the information is public, why not use it as a resource to locate a phone number or email address and contact the buyer/seller listed?  Electronic means of contact tend to be quick and inexpensive.

If you still can’t reach your intended target, send a sales verification questionnaire to the home address of the new buyer, with a postage-paid return envelope included.

Third Party Sources

When transfer documents don’t provide full disclosure or omit important sales information and the buyer/seller can’t be reached, you can always reach out to one of these third-party sources:

  • Multiple Listing Services
  • Title companies
  • Financial institutions
  • Leasing agencies
  • Property managers
  • Real estate brokers and agencies
  • Government and private fee appraisers
  • Attorneys
  • Appraisal organizations

Sound too easy? It’s important to note that none of the methods for reaching sources is without its faults. For example, phone interviews make it difficult to prove the identity of the person on the other end of the line and personal interviews are both costly and time consuming.

And, although using a sales verification questionnaire as a source for collecting sales data is not very costly, you do incur the costs of printing and mailing the letter and you have the disadvantage of having to wait for a response. Information gained is limited to the questions stated on the questionnaire and can leave the need for follow-up verification.

Just keep in mind, sales information should never be accepted at face value without first verifying the sale by contacting a party to the sale – especially when data is unclear, or when questions about the sale remain unanswered.

*Special thanks to Harding Sugg, Deputy Tax Assessor for Pitt County, for providing information on the sales verification process.

Additional Source: http://www.iaao.org/uploads/Verification_Adjustment_of_Sales.pdf