Property Tax Exemptions for Community & Economic Development

<p>North Carolina property tax law, nicknamed the Machinery Act, contains many dozens of full or partial exemptions for property as diverse as free drug samples, uranium 233, and Loyal Order of the Moose clubhouses.</p> <p>This blog post attempts to identify which of these property tax breaks that might be relevant to a local government’s community and economic development plans.  Before we get to that list, I first offer some context and general observations about North Carolina’s property tax system.</p> <p>Uniformity</p> <p>Remember that only the General Assembly has the authority to create exemptions from property taxes. Local governments may not create their own custom exemptions; they all need to play by the uniform, statewide rules created by the General Assembly. See this post for more on our state constitution’s uniformity clause.</p> <p>Exemptions vs. Exclusions</p> <p>The terms “exemption” and “exclusion” both refer to provisions that remove some or all of the value of a particular property from taxation. Technically, exemptions are the property tax breaks listed in the state constitution (Art. V, Sect. 2(3)) for government, educational, scientific, literary, cultural, charitable, and religious property.  They reduce the taxable value of property to zero. Exclusions cover a wide variety of property and either eliminate all of a property’s taxable value or reduce it by a specified amount. The two terms are often used interchangeably; in this blog post I’ll stick with the term “exemption” for simplicity.</p> <p>It is possible to combine multiple exemptions on the same property.</p> <p>The Use Requirement</p> <p>Other than the exemption for government property, all exemptions create requirements for both ownership and use of the property in [...]</p>