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Bill Summary · SB 427

Summary — SB 427: Property Tax Modifications

Status: Enacted (Chapter 317, Statutes of 2025 — approved by Governor 10/03/2025)
Introduced: February 18, 2025
Primary subject areas: Property; Real estate; Taxation; Tax exemptions

Purpose / Intent

SB 427 modifies North Carolina’s property tax rules (the Machinery Act) to (1) change the statutory classification and exclusion of certain personal property from the property tax base, (2) clarify listing duties and penalties for failure to list property, and (3) provide temporary interest relief for real and personal property located in a statutorily defined “affected area.”

Key provisions and changes

  • New/modified special class: "Non‑business Qualified Personal Property"
    • Redefines “qualified personal property” to encompass:
    • Personal property used by an owner for non‑income (household) purposes (examples listed: household furnishings, clothing, pets, lawn tools/equipment).
    • Personal property used in connection with a business or for production of income, provided the value at acquisition is $20,000 or less.
    • Explicitly excludes motor vehicles, mobile homes, aircraft, watercraft, and engines for watercraft from this class.
  • Listing duty and penalty (G.S. 105‑308)
    • Reaffirms duty to timely list property changes with the assessor.
    • Willful failure or willfully aiding evasion of listing duties is a Class 2 misdemeanor; failure to list is prima facie evidence of willfulness where a listing duty exists.
  • Interest relief for property in a defined “affected area”
    • Real and personal property located in the affected area (per S.L. 2024‑57, Section 1A.4) is designated a special class.
    • Interest on an underpayment of property tax that (a) accrues during Jan 7, 2025 through Dec 31, 2026 and (b) is due Sept 1, 2024, shall not be collected; any such amounts collected must be carried forward as a credit against the following year’s tax. (This exclusion does not apply to classified motor vehicles.)
  • Effective dates
    • Sections establishing the new property classification and the listing/penalty rules are effective for taxes imposed for taxable years beginning on or after July 1, 2025.
    • The remainder of the Act is effective upon becoming law.

Who is affected

  • Individual taxpayers: homeowners and households benefit from clarified exclusions for household personal property.
  • Small businesses / owners of lower‑value business personal property (acquired at ≤ $20,000) may see qualifying property excluded from the tax base.
  • Property owners located in the specified “affected area” gain temporary relief from interest on certain underpayments.
  • County assessors, tax collectors, and local governments (administration and collection functions); potential short‑term revenue and administrative impacts at the local level.

Potential fiscal and administrative impacts

  • Possible reduction in assessed taxable property for qualifying items and a short‑term reduction or deferral of interest revenue for properties in the affected area.
  • Administrative impacts for assessors and collectors to implement the new classification, process credits, and enforce listing/penalty provisions.
  • No dollar amounts are specified in the statute; local fiscal effects depend on the number/value of qualifying properties and the scope of the affected area.

Procedural / timeline notes

  • The bill was enacted and chaptered as Chapter 317, Statutes of 2025 (Governor approval on 10/03/2025).
  • Key operative timeline: tax‑year provisions take effect for taxable years beginning July 1, 2025; other provisions effective upon enactment.

If you want, I can:
- Pull the exact statutory text of the amended G.S. sections for comparison to current law, or
- Provide a short checklist for assessors/tax offices to implement these changes.

Compiled from official sources — confirm details with the bill’s official record.

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