NC General Statutes

N.C. Gen. Stat. § 20-97 (2026)

Taxes credited to Highway Fund; municipal vehicle taxes

✓ current as of July 2026

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(a) State Taxes to Highway Fund. - All taxes levied under this Article are compensatory taxes for the use and privileges of the public highways of this State. The taxes collected shall be credited to the State Highway Fund. Except as provided in this section, no county or municipality shall levy any license or privilege tax upon any motor vehicle licensed by the State.

(b) Repealed by Session Laws 2015-241, s. 29.27A(a), effective July 1, 2016.

(b1) Municipal Vehicle Tax. - A city or town may levy an annual municipal vehicle tax upon any vehicle resident in the city or town. The aggregate annual municipal vehicle tax levied, including any annual municipal vehicle tax authorized by local legislation, may not exceed thirty dollars ($30.00) per vehicle. A city or town may use the net proceeds from the municipal vehicle tax as follows:

(1) General purpose. - Not more than five dollars ($5.00) of the tax levied may be used for any lawful purpose.

(2) Public transportation. - Not more than five dollars ($5.00) of the tax levied may be used for financing, constructing, operating, and maintaining local public transportation systems. This subdivision only applies to a city or town that operates a public transportation system as defined in G.S. 105-550.

(3) Public streets. - The remainder of the tax levied may be used for maintaining, repairing, constructing, reconstructing, widening, or improving public streets in the city or town that do not form a part of the State highway system.

(d) Municipal Taxi Tax. - Cities and towns may levy a tax of not more than fifteen dollars ($15.00) per year upon each vehicle operated in the city or town as a taxicab. The proceeds of the tax may be used for any lawful purpose.

(e) No Additional Local Tax. - No county, city or town may impose a franchise tax, license tax, or other fee upon a motor carrier unless the tax is authorized by this section. (1937, c. 407, s. 61; 1941, c. 36; 1943, c. 639, ss. 3, 4; 1975, c. 716, s. 5; 1977, c. 433, s. 1; c. 880, s. 1; 1979, c. 173, s. 1; c. 216, s. 1; c. 217; c. 248, s. 1; c. 398; c. 400, s. 1; c. 458; c. 530, s. 1; c. 790; 1979, 2nd Sess., c. 1152; c. 1153, s. 1; c. 1155, s. 1; c. 1189; c. 1308, s. 1; 1981, cc. 74, 129, 210, 228, 310, 311, 312, 315, 368, 370, s. 10; c. 415, s. 10; cc. 857, 858, 991; 1981 (Reg. Sess., 1982), cc. 1202, 1250; 1983, cc. 9, 75; c. 106, s. 1; c. 188, ss. 1, 2; 1993, c. 321, s. 146, c. 479, s. 4; c. 456, s. 1; 1997-417, s. 2; 2009-166, s. 2(b); 2015-241, s. 29.27A(a).)

§ 20-98: Repealed by Session Laws 2007-491, s. 2, effective January 1, 2008.

§ 20-99: Repealed by Session Laws 2007-491, s. 2, effective January 1, 2008.

Notes of Decisions

Cited in 10 cases, 1951–2006 · leading case: Victory Cab Co. v. City of Charlotte, 68 S.E.2d 433 (N.C. 1951).

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Victory Cab Co. v. City of Charlotte, 68 S.E.2d 433 (N.C. 1951). · cites it 8× “The plaintiffs contend that by the terms of G.S. 20-97 (a) and (b) the City was limited to the collection of $1.”

Bald Head Island, Ltd. v. Vill. of Bald Head Island, 624 S.E.2d 406 (N.C. Ct. App. 2006). · cites it 8× “Plaintiffs also argue that the ICE fees assessed by the Village violate N.C. Gen. Stat. § 20-97 , which limits municipal taxes on vehicles to $5.”

North Carolina Sch. Boards Ass'n v. Moore, 585 S.E.2d 418 (N.C. Ct. App. 2003). · cites it 4× “" N.C. Gen.Stat. § 20-97 (2001). Thus, the annual registration fees under N.”

In Re the Assessment of Additional Sales & Use Taxes Against Halifax Paper Co., 131 S.E.2d 441 (N.C. 1963). “A prior statute, G.S. 20-97, limited the levy to $15.00. This Court in an opinion delivered by Johnson, J.”

Hodgson v. Hyatt Realty & Inv. Co., Inc., 353 F. Supp. 1363 (M.D.N.C. 1973). · cites it 7× “" In the present case, not all of the tax money collected is credited to the State Highway Fund.”

Meade v. Meade, 650 F. Supp. 205 (M.D.N.C. 1986). “Code § 20-97. Since all parties resided in Virginia on the date the divorce proceedings were commenced, and for at least six months prior to that date, Virginia had jurisdiction to make the initial custody award and the November 10, 1982, award is consistent with the PKPA.”

Hodgson v. Hyatt Realty & Inv. Co., 353 F. Supp. 1363 (M.D.N.C. 1973). · cites it 7× “” In the present case, not all of the tax money collected is credited to the State Highway Fund.”

Cooke v. Futrell, 246 S.E.2d 65 (N.C. Ct. App. 1978). “” G.S. 20-97 authorizes cities and towns to levy not more than one dollar ($1.”

North Carolina Sch. Boards Ass'n v. Moore, 614 S.E.2d 504 (2005). · cites it 4× “2d at 438 -40 (quoting N.C.G.S. § 20-97 (2001)). *500 On appeal to this Court, defendants contend that the majority of the Court of Appeals erred and argue that the penalties assessed against the owners of overweight vehicles are reimbursement for damages or are a tax.”

Pilot Freight Carriers, Inc. v. Scheidt, 140 S.E.2d 383 (N.C. 1965). “The construction and maintenance of our highways is financed, in part, by a tax based on the use of the highways by motor vehicles, G.S. 20-97. The amount of the tax varies with the type of vehicle, its weight and intended use.”

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