§ 105-366. Remedies against personal property. - North Carolina Statutes

§105‑366.  Remedies against personal property.

(a)        Authority toProceed against Personal Property; Relation between Remedies against PersonalProperty and Remedies against Real Property. – All tax collectors shall haveauthority to proceed against personal property to enforce the collection oftaxes as provided in this section and in G.S. 105‑367 and 105‑368.Any tax collector may, in his discretion, proceed first against personalproperty before employing the remedies for enforcing the lien for taxes againstreal property, and he shall proceed first against personal property:

(1)        When directed to doso by the governing body of the taxing unit; or

(2)        When requested to doso by the taxpayer or by a mortgagee or other person holding a lien upon thereal property subject to the lien for taxes if the person making the requestfurnishes the tax collector with a written statement describing the personalproperty to be proceeded against and giving its location.

No foreclosure of a tax lienon real property may be attacked as invalid on the ground that payment of thetax should have been procured from personal property.

(b)        Remedies afterTaxes Are Delinquent. – At any time after taxes are delinquent and before thefiling of a tax foreclosure complaint under G.S. 105‑374 or the docketingof a judgment for taxes under G.S. 105‑375, and subject to the provisionsof G.S. 105‑356 governing the priority of liens, the tax collector maylevy upon and sell or attach the following property for failure to pay taxes:

(1)        Any personalproperty owned by the taxpayer, regardless of the time at which it was acquiredand regardless of the existence or date of creation of mortgages or other liensthereon.

(2)        Any personalproperty transferred by the taxpayer to a relative (which shall mean anyparent, grandparent, child, grandchild, brother, sister, aunt, uncle, niece, ornephew, or their spouses, of the taxpayer or his spouse).

(3)        Personal property inthe hands of a receiver for the taxpayer. (It shall not be necessary for thetax collector to apply for an order of the court directing payment orauthorizing the levy or attachment, but he may proceed as though the propertywere not in the hands of the receiver, and the tax collector's filing of aclaim in a receivership proceeding shall not preclude him from proceeding tolevy under G.S. 105‑367 or to attach under G.S. 105‑368.)

(4)        Personal property ofa deceased taxpayer if the levy or attachment is made before final settlementof the estate.

(5)        The stock of goodsor fixtures of a wholesale merchant or retailer, as defined in G.S. 105‑164.3,in the hands of a purchaser or transferee thereof, or any other personalproperty of the purchaser or transferee of the property, if the taxes on thegoods or fixtures remain unpaid 30 days after the date of the sale or transfer.In the case of other personal property of the purchaser or transferee, the levyor attachment must be made within six months of the sale or transfer.

(6)        Personal property ofthe taxpayer that has been repossessed by one having a security interesttherein so long as the property remains in the hands of the person who hasrepossessed it or the person to whom it has been transferred other than by bonafide sale for value.

(7)        Personal propertydue the taxpayer or to become due to him within the calendar year.

(8)        Personal property ofa partner in satisfaction of taxes on partnership property, but only after thetax collector:

a.         Has sold the taxingunit's lien for taxes against the partnership real property, if any; and

b.         Exhausted thepartnership's personal property through the use of levy and attachment andgarnishment; and

c.         Exercised theauthority granted him by G.S. 105‑364 in an effort to collect the tax dueon the partnership's property.

(9)        Personal propertytransferred by the taxpayer by any type of transfer other than those mentionedin this subsection (b) and other than by bona fide sale for value if the levyor attachment is made within six months of the transfer.

(c)        Remedies BeforeTaxes Are Delinquent. – If between the date as of which property is to belisted and January 6 of the fiscal year for which the taxes are imposed the taxcollector has reasonable grounds for believing that the taxpayer is about toremove his property from the taxing unit or transfer it to another person or isin imminent danger of becoming insolvent, the tax collector may levy on orattach that property or any other personal property of the taxpayer, in themanner provided in G.S. 105‑367 and 105‑368. If the amount of taxescollected under this subsection has not yet been determined, these taxes shallbe computed in accordance with G.S. 105‑359 and any applicable discountshall be allowed.

(d)        Remedies againstSellers and Purchasers of Stocks of Goods or Fixtures of Wholesale Merchants orRetailers. –

(1)        Any wholesalemerchant or retailer, as defined in G.S. 105‑164.3, who sells ortransfers the major part of its stock of goods, materials, supplies, orfixtures, other than in the ordinary course of business, or who goes out ofbusiness, must take the following actions:

a.         At least 48 hoursprior to the date of the pending sale, transfer, or termination of business,give notice to the assessors and tax collectors of the taxing units in whichthe business is located.

b.         Within 30 days of thesale, transfer, or termination of business, pay all taxes due or to become dueon the transferred property on the first day of September of the currentcalendar year.

(2)        Any person to whomthe major part of the stock of goods, materials, supplies, or fixtures of awholesale merchant or retailer is sold or transferred, other than in theordinary course of business, or who becomes the successor in business of awholesale merchant or retailer shall withhold from the purchase money paid tothe merchant an amount sufficient to pay the taxes due or to become due on thetransferred property on the first day of September of the current calendar yearuntil the former owner or seller produces either a receipt from the taxcollector showing that the taxes have been paid or a certificate that no taxesare due. If the purchaser or successor in business fails to withhold asufficient amount of the purchase money to pay the taxes as required by thissubsection and the taxes remain unpaid after the 30‑day period allowed, thepurchaser or successor is personally liable for the amount of the taxes unpaid.This liability may be enforced by means of a civil action brought in the nameof the taxing unit against the purchaser or successor in an appropriate trialdivision of the General Court of Justice in the county in which the taxing unitis located.

(3)        Whenever anywholesale merchant or retailer sells or transfers the major part of its stockof goods, materials, supplies, or fixtures, other than in the ordinary courseof business, or goes out of business and the taxes due or to become due on thetransferred property on the first day of September of the current calendar yearare unpaid, the tax collector, to enforce collection of the unpaid taxes, maydo any of the following:

a.         Levy on or attachany personal property of the seller.

b.         If the taxes remainunpaid 30 days after the date of the transfer or termination of business, levyon or attach any of the property transferred in the hands of the transferee orsuccessor in business, or any other personal property of the transferee orsuccessor in business, but in either case the levy or attachment must be madewithin six months of the transfer or termination of business.

(4)        In using theremedies provided in this subsection, the amount of taxes not yet determinedshall be computed in accordance with G.S. 105‑359, and any applicablediscount shall be allowed. (1939, c. 310, s. 1713; 1951, c. 1141, s. 1; 1955, cc.1263, 1264; 1957, c. 1414, ss. 2‑4; 1969, c. 305, c. 1029, s. 1; 1971, c.806, s. 1; 1973, c. 564, s. 1; 1987, c. 45, s. 1; c. 93, s. 3; 1998‑98,ss. 112, 113.)