Highway Use Tax

North Carolina collects a Highway Use Tax (HUT) on vehicles instead of a state sales tax. The tax is assessed each time a title is transferred.

Money that is collected for the Highway Use Tax goes to the NC Highway Trust Fund and the State's General Fund. That money is then used to improve the roads of North Carolina.

Fees

Payments for transactions at DMV License Plate offices are accepted in the form of cash, money order, personal checks, credit cards or debit cards. [?].

Highway Use Tax
Tax, Commercial Vehicles 26,001 lbs and over [?] Max $1000.00
Tax, Mobile Homes (Collected by Selling Dealers) [?] 2% Sales Tax, Max $300.00
Tax, Out-of-State Residents [?] Max $150.00
Tax, Overseas Vehicles [?] 3% Sales Tax
Tax, Overseas Vehicles - Military Personnel [?] 3% Sales Tax, Max $150.00
Tax, Special Mobile Equipment [?] 7% Sales Tax
Tax, Vehicles [?] 3% Highway Use Tax

Exemptions from Highway Use Tax

Vehicles already titled within North Carolina have certain exemptions from the HUT such as:

  • An insurance company obtaining a salvage title for a vehicle on which a total loss claim was paid.
  • When transferring a title to a manufacturer or retailer for the purpose of resale.
  • When making a name change or name correction to a title.
  • If the vehicle is transferred by a will or intestacy.
  • If the vehicle is a gift between a husband and wife, a parent and child or a stepparent and a stepchild. This exemption does not include out-of-state title transactions, only NC title transactions apply.
  • If the vehicle is transferred as a result of the distribution of marital or divisible property incident to a marital separation or divorce.
  • To a handicapped person from the Department of Health and Human Services after the vehicle has been equipped by the Department for use by the handicapped.
  • To a local board of education for use in the driver education program of a public school when the vehicle is transferred by a retailer and is to be transferred back to the retailer within 300 days after the transfer or transferred by a local board of education.
  • To a volunteer fire department or volunteer rescue squad that is not part of a unit of local government, has no more than two paid employees, and is exempt from NC Income Tax under G.S. 105-130.11, when the motor vehicle is one of the following:
    • A fire truck, a pump truck, a tanker truck, or a ladder truck used to suppress fire.
    • A four-wheel drive vehicle intended to be mounted with a water tank and hose and used for forest fire fighting.
    • An emergency services vehicle.

Property Taxes

Registration Stop: County Tax Block

If you fail to pay county taxes on your vehicle you must contact your County Tax Department to clear the stop.

State property tax law requires counties to assess the value of motor vehicles registered with DMV and to prepare tax bills. Three months after the motor vehicle's registration renewal date, the vehicle owner will receive a tax bill which is payable on the first day of the following month.

The property tax law calls for counties to charge interest for overdue accounts. Legislation now allows counties to block the license plate (registration) renewal for any vehicle for which the owner owes an overdue property tax.

A county tax collector can place a "block" on the registration of any vehicle for which property tax payment is at least four months overdue. If a county places a "block" on the vehicle registration, the DMV is unable to renew the license plate for that vehicle until the owner presents the DMV with a paid tax receipt. The county that placed the "block" removes the "tax block" from the system.

The DMV is not involved in establishing the value of a vehicle for property tax purposes. It furnishes a record of the make and model of the registered vehicle, and the local county assessment office determines the tax accordingly.

Vehicles not included under NC Property Tax

  • Vehicles exempt from registration by NC law.
  • Manufactured homes
  • Mobile classrooms and offices
  • Semi-trailers registered on a multi-year basis
  • Motor vehicles owned or leased by public service companies
  • Vehicles in confidential status

NC residents who have not registered their vehicles or who have not renewed their vehicle registrations are required to list their vehicles with their county of residence by January 31 of each year.