§ 105-338. Allocation of appraised valuation of system property among local taxing units. - North Carolina Statutes

§105‑338.  Allocation of appraised valuation of system property amonglocal taxing units.

(a)        State Board's Duty.– For purposes of taxation by local taxing units in this State, the Departmentof Revenue shall allocate the valuations of public service company propertyamong the local taxing units in accordance with the provisions of this section.

(b)        System Valuation ofCompanies Other Than Those Noted in Subsection (c). –

(1)        System Property ofRailroad Companies. – The appraised valuation of the distributable systemproperty of a railroad shall be allocated for taxation to the local taxingunits in accordance with the ratio of the miles of all the company's tracks inthe local taxing unit to the total miles of all the company's tracks in thisState, adjusted to reflect density of traffic in the local taxing unit.

(2)        System Property ofTelephone Companies. –

a.         The Department ofRevenue shall divide each telephone company's system property in this Stateinto the following two classes and shall determine the original cost of thatproperty and the percentage thereof represented by the property in each of thetwo classes.

            – Class 1: Propertylocated in this State that is identified under the applicable uniform system ofaccounts as central office equipment, large P.B.X. equipment, motor vehicles,tools and work equipment, office furniture and equipment, materials andsupplies, and land and buildings (including towers and other structures).

            – Class 2: Propertylocated in this State that does not come within Class 1.

                  TheDepartment of Revenue shall then apply the percentages obtained in accordancewith this subdivision to the appraised valuation of the company's systemproperty in this State and thereby derive the proportions of appraisedvaluation to be allocated as Class 1 and Class 2 valuations to local taxingunits in accordance with subdivision (b)(2)b, below.

b.         Having made thedivision required by subdivision (b)(2)a, above, the Department of Revenueshall allocate the appraised valuation of the properties in each class amongthe local taxing units of the State as follows:

            – Class 1: Theappraised valuations of property in this class shall be allocated among thelocal taxing units in which such property of the company is situated on January1 in the proportion that the original cost of such property in the taxing unitbears to the original cost of all such property in this State.

            – Class 2:The appraised valuations of property in this class shall be allocated among thelocal taxing units in which the company operates in the proportion that themiles of the company's single aerial wire and single wire in cable (includingsingle tube in coaxial cable) in the taxing unit bears to the total of suchwire miles of the company in this State.

(3)        System Property ofOther Companies Appraised by the Department of Revenue. –

a.         The provisions ofthis subdivision (b)(3) shall govern the allocation of the property of allcompanies appraised by the Department of Revenue except railroad, telephone,bus line, motor freight carrier, and airline companies.

b.         The appraisedvaluation of the system property of such a company shall be allocated fortaxation to the local taxing units in which the company operates in theproportion that the original cost of the taxable system property in the localtaxing unit on January 1 bears to the original cost of all the taxable systemproperty in this State. If in any local taxing unit the company owns systemproperty acquired prior to January 1, 1972, for which the original cost cannotbe definitely ascertained, a reasonable estimate of the original cost of thatproperty shall be made by the company, and this estimate shall be used by theDepartment of Revenue for allocation purposes as if it were the actual originalcost of the property.

(c)        Property of BusLine, Motor Freight Carrier, and Airline Companies. –

(1)        The appraisedvaluation of a bus line company's rolling stock shall be allocated for taxationto each local taxing unit according to the ratio of the company's scheduledmiles during the calendar year preceding January 1 in each such unit to thecompany's total scheduled miles in this State for the same period. In no event,however, shall the State Board make an allocation to a taxing unit if, whencomputed, the valuation for that taxing unit amounts to less than five hundreddollars ($500.00).

(2)        The appraisedvaluation of the rolling stock (other than locally assigned rolling stock)owned or leased by a motor freight carrier company shall be allocated fortaxation to each local taxing unit in which the company has a terminalaccording to the ratio of the tons of freight handled in the calendar yearpreceding January 1 at the company's terminals within the taxing unit to thetotal tons of freight handled by the company in this State in the same period.If a North Carolina interstate motor freight carrier company has no terminaloutside this State, but has been required to pay ad valorem tax to one or moretaxing units outside this State, there shall be allowed a reduction in the NorthCarolina valuation measured by the ratio of the rolling stock subject to advalorem taxation outside the State to all of the carrier's rolling stock.

(3)        The appraisedvaluation of an airline company's flight equipment shall be allocated fortaxation to each local taxing unit in which an airport used by the company issituated according to the ratio obtained by averaging the following two ratios:the ratio of the company's ground hours in the taxing unit in the yearpreceding January 1 to the company's ground hours in the State in the sameperiod, and the ratio of the company's gross revenue in the taxing unit in theyear preceding January 1 to the company's gross revenue in the State in thesame period. (1939, c. 310, s. 1610; 1971, c. 806, s. 1; 1973, c.476, s. 193; c. 1180; 1997‑456, s. 27.)