10/7/2015 Wake County Revenue Department 1 Dan McCarty, CPA Business Auditor Wake County

Who owns the property? Airports Rental Companies Aircraft – FAA Registration Aircraft – Lease back Sale UDRP Vehicle Review

 Private company has a Government Contract  Private company purchases equipment  Pretty simple, all equipment purchased by the private company is taxable  Private company now states, wait…the Government owns some of the equipment.  Contract states government will own certain equipment entirely by reimbursing private co.  Who owns this equipment?

 Now its easy – rest of the equipment the private company owns  No, wait…  Private company now points to contract that states….

 Government contract states “The parties acknowledge that as they will be jointly funding construction, they will jointly own the facility and equipment in accordance with their respective shares of investment (40% by government) during the performance of 1 through 7. In consideration for the agreements and mutual benefits herein provided, upon completion of the performance of 7, all rights and title to facility and equipment shall pass to the contractor, and the Government shall retain no right of ownership in the facility and related equipment to be funded under this contract.”

 Private Company now states they only own 60% of all the equipment per the contract.  Is this true or does the private company own 100% of the equipment?

 No matter how small or big there is plenty to review.  If airport is privately or government owned, you should determine all the entities that supply hanger space or tie down service  Why  They are the companies that will inform you of all the aircraft being stored  How is N.C.G.S.§ (a)(3) helpful?

 Next be sure all buildings and businesses have been assessed  If government owned, then you must verify who owns all the buildings  Then secure a list of all businesses at the airport as of January 1 each year (should include all vending machine owners as well)

 How many of you have companies in your County renting personal property?  What schedule are they listing equipment on?  Many of them list everything on P5, equipment held for short term rentals (daily or weekly)  Is that correct that all company assets should be listed on P5?

 Taxpayer owns an aircraft on January 1, 2004, lists for 2004 (Aircraft 1)  Taxpayer sells Aircraft 1 on December 28,  Is Aircraft 1 taxable for 2005?  Same Taxpayer purchases new aircraft (Aircraft 2) and FAA registers it on January 18, 2005  Taxpayer files listing stating sold aircraft 1, did not take delivery of new aircraft 2 until after January 1,  Is this taxable for 2005?

 Same Taxpayer sells Aircraft 2 to Indiana Company on December 28,  Is this taxable for 2006?  Taxpayer as part of sale leases back Aircraft 2 from Indiana Company until January 28, Taxpayer had possession of aircraft the entire time – never turned over to Indiana Co.  Is it now taxable for 2006.

10/7/  What is a UDRP vehicle?  Which vehicles may be registered as UDRP vehicles?  Why should you check on the vehicles registered as UDRP?  What businesses should be checked for this problem?

10/7/  What is a UDRP vehicle? This is a vehicle that is registered to be used as a short term rental vehicle. The use the following codes; UDRP, UDRT, UDMC1, UDMC2, UDMC3 Short term is 364 continuous days or less

10/7/  Which vehicles may be registered as UDRP vehicles? A motor vehicle of the passenger type, including a passenger van, minivan, or sport utility vehicle (160A-215.1(e)(2)a) Under (27) the definition is virtually any vehicle can be a ‘Passenger Vehicle.’

10/7/  Which vehicles may be registered as UDRP vehicles? A motor vehicle of the cargo type, including cargo van, pickup truck, or truck with a gross vehicle weight rating of 26,000 pounds or less used predominantly in the transportation of property for other than commercial freight and that does not require the operator to posses a commercial drivers license. (160A (e)(2)b)

10/7/  Which vehicles may be registered as UDRP vehicles? A trailer or semi trailer with a gross vehicle weight of 6,000 pounds or less. (160A (e)(2)c) (page 293)

10/7/  Why should you check on the vehicles registered as UDRP? Any vehicle registered as UDRP is excluded from assessment by the assessor. If registered as such they should have a rental account with your county.

10/7/  What businesses should be checked for this problem? All auto dealerships!