§ 105-357. Payment of taxes. - North Carolina Statutes

§ 105‑357.  Payment oftaxes.

(a)        Medium of Payment.– Taxes shall be payable in existing national currency. Deeds to real property,notes of the taxpayer or others, bonds or notes of the taxing unit, andpayments in kind shall not be accepted in payment of taxes. A taxing unit maynot permit the payment of taxes by offset of any bill, claim, judgment, orother obligation owed to the taxpayer by the taxing unit. The prohibitionagainst payment of taxes by offset does not apply to offset of an obligation arisingfrom a lease or another contract entered into between the taxpayer and thetaxing unit before July 1 of the fiscal year for which the unpaid taxes werelevied.

(b)        Acceptance ofChecks and Electronic Payment. – The tax collector may accept checks and electronicpayments, as defined in G.S. 147‑86.20, in payment of taxes, asauthorized by G.S. 159‑32.1. Acceptance of a check or electronic paymentis at the tax collector's own risk. A tax collector who accepts electronicpayment of taxes may add a fee to each electronic payment transaction to offsetthe service charge the taxing unit pays for electronic payment service. A taxcollector who accepts electronic payment or check in payment of taxes may issuethe tax receipt immediately or withhold the receipt until the check has beencollected or the electronic payment invoice has been honored by the issuer.

If a tax collector accepts acheck or an electronic payment and issues a tax receipt and the check isreturned unpaid (without negligence on the part of the tax collector inpresenting the check for payment) or the electronic payment invoice is nothonored by the issuer, the taxes for which the check or electronic payment wasgiven shall be deemed unpaid; the tax collector shall immediately correct thecopy of the tax receipt and other appropriate records to show the fact ofnonpayment, and shall give written notice by certified or registered mail tothe person to whom the tax receipt was issued to return it to the taxcollector. After correcting the records to show the fact of nonpayment, the taxcollector shall proceed to collect the taxes by the use of any remedies allowedfor the collection of taxes or by bringing a civil action on the check orelectronic payment.

A financial institution withwhich a taxing unit has contracted for receipt of payment of taxes may accept acheck in payment of taxes. If the check is honored, the financial institutionshall so notify the tax collector, who shall, upon request of the taxpayer,issue a receipt for payment of the taxes. If the check is returned unpaid, thefinancial institution shall so notify the tax collector, who shall proceed tocollect the taxes by use of any remedy allowed for collection of taxes or bybringing a civil action on the check.

(1)        Effect on Tax Lien.– If the tax collector accepts a check or electronic payment in payment oftaxes on real property and issues the receipt, and the check is later returnedunpaid or the electronic payment invoice is not honored by the issuer, thetaxing unit's lien for taxes on the real property shall be inferior to therights of purchasers for value and of persons acquiring liens of record forvalue if the purchasers or lienholders acquire their rights in good faith andwithout actual knowledge that the check has not been collected or theelectronic payment invoice has not been honored, after examination of the copyof the tax receipt in the tax collector's office during the time that recordshowed the taxes as paid or after examination of the official receipt issued tothe taxpayer prior to the date on which the tax collector notified the taxpayerto return the receipt.

(2)        Penalty. – Inaddition to interest for nonpayment of taxes provided by G.S. 105‑360 andin addition to any criminal penalties provided by law, the penalty forpresenting in payment of taxes a check or electronic funds transfer that isreturned or not completed because of insufficient funds or nonexistence of anaccount of the drawer or transferor is twenty‑five dollars ($25.00) orten percent (10%) of the amount of the check or electronic invoice, whicheveris greater, subject to a maximum of one thousand dollars ($1,000). This penaltydoes not apply if the tax collector finds that, when the check or electronicfunds transfer was presented for payment, the drawer of the check or transferorof funds had sufficient funds in an account at a financial institution in thisState to make the payment and, by inadvertence, the drawer of the check ortransferor of the funds failed to draw the check or initiate a transfer on theaccount that had sufficient funds. This penalty shall be added to and collectedin the same manner as the taxes for which the check or electronic payment wasgiven.

(c)        Small Underpaymentsand Overpayments. – The governing body of a taxing unit may, by resolution,permit its tax collector to treat small underpayments of taxes as fully paidand to not refund small overpayments of taxes unless the taxpayer requests arefund before the end of the fiscal year in which the small overpayment is made.A "small underpayment" is a payment made, other than in person, thatis no more than one dollar ($1.00) less than the taxes due on a tax receipt. A"small overpayment" is a payment made, other than in person, that isno more than one dollar ($1.00) greater than the taxes due on a tax receipt.

The tax collector shall keeprecords of all underpayments and overpayments of taxes by receipt number andamount and shall report these payments to the governing body as part of hissettlement.

A resolution authorizingadjustments of underpayments and overpayments as provided in this subsectionshall:

(1)        Be adopted on orbefore June 15 of the year to which it is to apply;

(2)        Apply to taxeslevied for all previous fiscal years; and

(3)        Continue in effectuntil repealed or amended by resolution of the taxing unit. (1939, c. 310, s. 1710; 1971,c. 806, s. 1; 1987, c. 661; 1989, c. 578, s. 3; 1989 (Reg. Sess., 1990), c.1005, s. 8; 1991, c. 584, s. 2; 1999‑434, s. 6; 2001‑487, s. 25;2002‑156, s. 1; 2005‑134, s. 1; 2005‑313, s. 10.)