GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2013

H                                                                                                                                                   2

HOUSE BILL 14*

Committee Substitute Favorable 6/27/13

 

Short Title:        Rev Laws Technical, Clarifying, & Admin. Chg.		(Public)
Sponsors:
Referred to:

January 31, 2013

A BILL TO BE ENTITLED

AN ACT to make technical, clarifying, and administrative changes to the revenue laws and related statutes, as recommended by the revenue laws study committee.

The General Assembly of North Carolina enacts:

 

revenue laws recommendations

SECTION 1.(a)  G.S. 105‑116(b) reads as rewritten:

"(b)      Report Return and Payment. – The tax imposed by this section is payable quarterly or monthly as specified in this subsection. A return is due quarterly.

A water company or public sewerage company must pay tax quarterly when filing a return. An electric power company must pay tax in accordance with the schedule and requirements that apply to payments of sales and use tax under G.S. 105‑164.16 and must file a return quarterly.

A quarterly return covers a calendar quarter and is due by the last day of the month that follows the quarter covered by the return. A taxpayer must submit a return on a form provided by the Secretary. The return must include the taxpayer's gross receipts from all property it owned or operated during the reporting period in connection with its business taxed under this section. A taxpayer must report its gross receipts on an accrual basis. A return must contain the following information:

(1)        The taxpayer's gross receipts for the reporting period from business inside and outside this State, stated separately.

(2)        The taxpayer's gross receipts from commodities or services described in subsection (a) that are sold to a vendee subject to the tax levied by this section or to a joint agency established under Chapter 159B of the General Statutes or a city having an ownership share in a project established under that Chapter.

(3)        The amount of and price paid by the taxpayer for commodities or services described in subsection (a) that are purchased from others engaged in business in this State and the name of each vendor.

(4)        For an electric power company the entity's gross receipts from the sale within each city of the commodities and services described in subsection (a)."

SECTION 1.(b)  G.S. 105‑120.2 reads as rewritten:

"§ 105‑120.2.  Franchise or privilege tax on holding companies.

(a)        Every corporation, domestic and foreign, incorporated or, by an act, domesticated under the laws of this State or doing business in this State which, that, at the close of its taxable year year, is a holding company as defined in subsection (c) of this section, shall, pursuant to the provisions of G.S. 105‑122:G.S. 105‑122, do all of the following:

(1)        Make a report and statement, andFile a return.

(2)        Determine the total amount of its issued and outstanding capital stock, surplus and undivided profits, andprofits.

(3)        Apportion such outstanding capital stock, surplus and undivided profits to this State.

(b)        (1)        Every corporation taxed under this section shall annually pay to the Secretary of Revenue, at the time the report and statement are return is due, a franchise or privilege tax, which is hereby levied, tax at the rate of one dollar and fifty cents ($1.50) per one thousand dollars ($1,000) of the amount determined under subsection (a) of this section, but in no case shall the tax be more than seventy‑five thousand dollars ($75,000) nor less than thirty‑five dollars ($35.00).

(2)        Notwithstanding the provisions of subdivision (1) of this subsection, if the tax produced pursuant to application of this paragraph (2) exceeds the tax produced pursuant to application of subdivision (1), then the tax shall be is levied at the rate of one dollar and fifty cents ($1.50) per one thousand dollars ($1,000) on the greater of the amounts offollowing:

a.         Fifty‑five percent (55%) of the appraised value as determined for ad valorem taxation of all the real and tangible personal property in this State of each such corporation plus the total appraised value of intangible property returned for taxation of intangible personal property as computed under G.S. 105‑122(d); orG.S. 105‑122(d).

b.         The total actual investment in tangible property in this State of such corporation as computed under G.S. 105‑122(d).

…."

SECTION 1.(c)  G.S. 105‑122 reads as rewritten:

"§ 105‑122.  Franchise or privilege tax on domestic and foreign corporations.

…

(d)        After determining the proportion of its total capital stock, surplus and undivided profits as set out in subsection (c)(c1) of this section, which amount shall not be less than fifty‑five percent (55%) of the appraised value as determined for ad valorem taxation of all the real and tangible personal property in this State of each corporation nor less than its total actual investment in tangible property in this State, every corporation taxed under this section shall annually pay to the Secretary of Revenue, at the time the report and statement are return is due, a franchise or privilege tax at the rate of one dollar and fifty cents ($1.50) per one thousand dollars ($1,000) of the total amount of capital stock, surplus and undivided profits as provided in this section. The tax imposed in this section shall not be less than thirty‑five dollars ($35.00) and shall be is for the privilege of carrying on, doing business, and/or the continuance of articles of incorporation or domestication of each corporation in this State. Appraised value of tangible property including real estate is the ad valorem valuation for the calendar year next preceding the due date of the franchise tax return. The term "total actual investment in tangible property" as used in this section means the total original purchase price or consideration to the reporting taxpayer of its tangible properties, including real estate, in this State plus additions and improvements thereto less reserve for depreciation as permitted for income tax purposes, and also less any indebtedness incurred and existing by virtue of the purchase of any real estate and any permanent improvements made thereon. In computing "total actual investment in tangible personal property" there shall also be deducted a corporation may deduct reserves for the entire cost of any air‑cleaning device or sewage or waste treatment plant, including waste lagoons, and pollution abatement equipment purchased or constructed and installed which reduces the amount of air or water pollution resulting from the emission of air contaminants or the discharge of sewage and industrial wastes or other polluting materials or substances into the outdoor atmosphere or into streams, lakes, or rivers, upon condition that the corporation claiming this deduction shall furnish to the Secretary a certificate from the Department of Environment and Natural Resources or from a local air pollution control program for air‑cleaning devices located in an area where the Environmental Management Commission has certified a local air pollution control program pursuant to G.S. 143‑215.112 certifying that said Department or local air pollution control program has found as a fact that the air‑cleaning device, waste treatment plant or pollution abatement equipment purchased or constructed and installed as above described has actually been constructed and installed and that the device, plant or equipment complies with the requirements of the Environmental Management Commission or local air pollution control program with respect to the devices, plants or equipment, that the device, plant or equipment is being effectively operated in accordance with the terms and conditions set forth in the permit, certificate of approval, or other document of approval issued by the Environmental Management Commission or local air pollution control program and that the primary purpose is to reduce air or water pollution resulting from the emission of air contaminants or the discharge of sewage and waste and not merely incidental to other purposes and functions. The cost of constructing facilities of any private or public utility built for the purpose of providing sewer service to residential and outlying areas is treated as deductible for the purposes of this section; the deductible liability allowed by this section shall apply applies only with respect to pollution abatement plants or equipment constructed or installed on or after January 1, 1955.

…

(f)         The report, statement return and tax required by this section shall be is in addition to all other reports required or taxes levied and assessed in this State.

…."

SECTION 1.(d)  G.S. 105‑127(a) reads as rewritten:

"(a)       Every corporation, domestic or foreign, that is required to file a return with the Secretary from which a report is required by law to be made to the Secretary of Revenue, shall, unless otherwise provided, pay annually to said Secretary annually the franchise tax as required by G.S. 105‑122."

SECTION 1.(e)  G.S. 105‑134.2(b) reads as rewritten:

"(b)      In lieu of the tax imposed by subsection (a) of this section, there is imposed for each taxable year upon the North Carolina taxable income of every individual a tax determined under tables, applicable to the taxable year, which may be prescribed by the Secretary. The amounts of the tax determined under the tables shall be computed on the basis of the rates prescribed by subsection (a) of this section. This subsection does not apply to an individual making filing a return under section 443(a)(1) of the Code for a period of less than 12 months on account of a change in the individual's annual accounting period, or to an estate or trust. The tax imposed by this subsection shall be treated as the tax imposed by subsection (a) of this section."

SECTION 1.(f)  G.S. 105‑164.19 reads as rewritten:

"§ 105‑164.19.  Extension of time for making returns and payment.

The Secretary for good cause may extend the time for making filing any return under the provisions of this Article and may grant such additional time within which to make such file the return as he may deem proper proper, but the time for filing any such return shall not be extended for more than 30 days after the regular due date of such the return. If the time for filing a return be is extended, interest accrues at the rate established pursuant to G.S. 105‑241.21 from the time the return was due to be filed to the date of payment.payment shall be added and paid."

SECTION 1.(g)  G.S. 105‑164.30 reads as rewritten:

"§ 105‑164.30.  Secretary or agent may examine books, etc.

For the purpose of enforcing the collection of the tax levied by this Article, the Secretary or his duly authorized agent is hereby specifically authorized and empowered to examine at all reasonable hours during the day the books, papers, records, documents or other data of all retailers or wholesale merchants bearing upon the correctness of any return or for the purpose of making filing a return where none has been made as required by this Article, and may require the attendance of any person and take his testimony with respect to any such matter, with power to administer oaths to such person or persons. If any person summoned as a witness shall fail fails to obey any summons to appear before the Secretary or his authorized agent, or shall refuse refuses to testify or answer any material question or to produce any book, record, paper, or other data when required to do so, such the Secretary or his authorized agent shall report the failure or refusal shall be reported to the Attorney General or the district solicitor, who shall thereupon institute proceedings in the superior court of the county where such the witness resides to compel obedience to any summons of the Secretary or his authorized agent. Officers who serve summonses or subpoenas, and witnesses attending, shall receive like compensation as officers and witnesses in the superior courts, to be paid from the proper appropriation for the administration of this Article.

In the event any retailer or wholesale merchant shall fail or refuse fails or refuses to permit examination of the Secretary or his authorized agent to examine his books, papers, accounts, records, documents or other data by the Secretary or his authorized agents as aforesaid, data, the Secretary shall have the power to proceed by citing said may require the retailer or wholesale merchant to show cause before the superior court of the county in which said taxpayer resides or has its principal place of business as to why such the books, records, papers, or documents should not be examined and said the superior court shall have jurisdiction to enter an order requiring the production of all necessary books, records, papers, or documents and to punish for contempt any person who violates the order.of such order any person violating the same."

SECTION 1.(h)  G.S. 105‑236(a)(9) reads as rewritten:

"(9)      Willful Failure to File Return, Supply Information, or Pay Tax. – Any person required to pay any tax, to make a return, to keep any records, or to supply any information, who willfully fails to pay the tax, make file the return, keep the records, or supply the information, at the time or times required by law, or rules issued pursuant thereto, shall, is, in addition to other penalties provided by law, be guilty of a Class 1 misdemeanor. Notwithstanding any other provision of law, no prosecution for a violation brought under this subdivision shall be is barred before the expiration of six years after the date of the violation."

SECTION 1.(i)  G.S. 105‑258(a) reads as rewritten:

"(a)       Secretary May Examine Data and Summon Persons. – The Secretary of Revenue,Revenue is authorized to do any of the following for the purpose of ascertaining the correctness of any return, making filing a return where none has been made, or determining the liability of any person for a tax, or collecting any tax:such tax, shall have the power

(1)        to examine, Examine, personally, or by an agent designated by him, any books, papers, records, or other data which that may be relevant or material to such inquiry, and the Secretary may the inquiry.

(2)        summon Summon any of the following persons to appear at a time and place named in the summons, to produce such books, papers, records, or other data, and to give such testimony under oath as may be relevant or material to the inquiry:

a.         the Any person liable for the tax or required to perform the act, or any officer or employee of such person, or any person.

b.         Any person having possession, custody, care or control of books of account containing entries relevant or material to the income and expenditures of the person liable for the tax or required to perform the act, or any other person having knowledge in the premises.premises, to appear before the Secretary, or his agent, at a time and place named in the summons, and to produce such books, papers, records or other data, and to give such testimony under oath as may be relevant or material to such inquiry, and the Secretary or his agent may

(3)        administer Administer oaths to such person or persons. the persons listed in this subsection.

(4)        If any person so summoned refuses to obey such summons or to give testimony when summoned, the Secretary may apply Apply to the Superior Court of Wake County for an order requiring such person or persons to comply with the summons of the Secretary, and the failureany person who refuses to obey the summons or to give testimony when summoned. Failure to comply with such the court order shall be punished as for contempt."

SECTION 2.(a)  G.S. 105‑122(c1) reads as rewritten:

"(c1)     Apportionment. – A corporation that is doing business in this State and in one or more other states must apportion its capital stock, surplus, and undivided profits to this State. A corporation must use the apportionment method set out in subdivision (1) of this subsection unless the Department has authorized it to use a different method under subdivision (2) of this subsection. The portion of a corporation's capital stock, surplus, and undivided profits determined by applying the appropriate apportionment method is considered the amount of capital stock, surplus, and undivided profits the corporation uses in its business in this State.

…

(2)        Alternative. – A corporation that believes the statutory apportionment method set out in subdivision (1) of this subsection subjects a greater portion of its capital stock, surplus, and undivided profits to tax under this section than is attributable to its business in this State may make a written request to the Secretary for permission to use an alternative method. The request must set out the reasons for the corporation's belief and propose an alternative method. The corporation has the burden of establishing by clear, cogent, and convincing proof that the statutory apportionment method subjects a greater portion of the corporation's capital stock, surplus, and undivided profits to tax under this section than is attributable to its business in this State and that the proposed alternative method is a better method of determining the amount of the corporation's capital stock, surplus, and undivided profits attributable to the corporation's business in this State.

                  The Secretary must issue a written decision on a corporation's request for an alternative apportionment method. If the decision grants the request, it must describe the alternative method the corporation is authorized to use and state the tax years to which the alternative method applies. A decision may apply to no more than three tax years, unless the provisions of subdivision (3) of this subsection applies. years. A corporation may renew a request to use an alternative apportionment method by following the procedure in this subdivision. A decision of the Secretary on a request for an alternative apportionment method is final and is not subject to administrative or judicial review. A corporation authorized to use an alternative method may apportion its capital stock, surplus, and undivided profits in accordance with the alternative method or the statutory method."

SECTION 2.(b)  G.S. 105‑130.4(t1) reads as rewritten:

"(t1)     Alternative Apportionment Method. – A corporation that believes the statutory apportionment method that otherwise applies to it under this section subjects a greater portion of its income to tax than is attributable to its business in this State may make a written request to the Secretary for permission to use an alternative method. The request must set out the reasons for the corporation's belief and propose an alternative method.

The statutory apportionment method that otherwise applies to a corporation under this section is presumed to be the best method of determining the portion of the corporation's income that is attributable to its business in this State. A corporation has the burden of establishing by clear, cogent, and convincing proof that the proposed alternative method is a better method of determining the amount of the corporation's income attributable to the corporation's business in this State.

The Secretary must issue a written decision on a corporation's request for an alternative apportionment method. If the decision grants the request, it must describe the alternative method the corporation is authorized to use and state the tax years to which the alternative method applies. A decision may apply to no more than three tax years, unless the provisions of subsection (t2) of this section apply. years. A corporation may renew a request to use an alternative apportionment method by following the procedure in this subsection. A decision of the Secretary on a request for an alternative apportionment method is final and is not subject to administrative or judicial review. A corporation authorized to use an alternative method may apportion its income in accordance with the alternative method or the statutory method. A corporation may not use an alternative apportionment method except upon written order of the Secretary, and any return in which any alternative apportionment method, other than the method prescribed by statute, is used without permission of the Secretary is not a lawful return."

SECTION 3.  G.S. 105‑163.41(c) reads as rewritten:

"(c)       The period of the underpayment shall run runs from the date the installment was required to be paid to the earlier of:

(1)        The 15th day of the 3rd fourth month following the close of the taxable year, or

(2)        With respect to any portion of the underpayment, the date on which the portion is paid. An installment payment of estimated tax shall be is considered a payment of any previous underpayment only to the extent the payment exceeds the amount of the installment determined under subdivision (1) of subsection (b) for that installment date."

SECTION 4.  G.S. 105‑129.84(c) reads as rewritten:

"(c)       Carryforward. – Unless a longer carryforward period applies, any unused portion of a credit allowed under G.S. 105‑129.87 or G.S. 105‑129.88 may be carried forward for the succeeding five years, and any unused portion of a credit allowed under G.S. 105‑129.89 may be carried forward for the succeeding 15 years. If the Secretary of Commerce makes a written determination that the taxpayer is expected to purchase or lease, and place in service in connection with an eligible business within a two‑year period, at least one hundred fifty million dollars ($150,000,000) worth of business and real property, any unused portion of a credit under this Article with respect to the establishment that satisfies that condition may be carried forward for the succeeding 20 years. If the taxpayer does not make the required level of investment, the taxpayer shall apply the five‑year standard carryforward period rather than the 20‑year carryforward period."

SECTION 5.(a)  G.S. 105‑134.6 reads as rewritten:

"§ 105‑134.6.  Modifications to adjusted gross income.

…

(b)        Other Deductions. – In calculating North Carolina taxable income, a taxpayer may deduct any of the following items to the extent those items are included in the taxpayer's adjusted gross income.

…

(17b)    An amount equal to twenty percent (20%) of the amount added to federal taxable income as accelerated depreciation under subdivision (c)(8b) of this section. For the amount added to taxable income in the 2010 taxable year, the deduction allowed by this subdivision applies to the first five taxable years beginning on or after January 1, 2011. For the amount added to taxable income in the 2011 taxable year, the deduction allowed by this subdivision applies to the first five taxable years beginning on or after January 1, 2012. For the amount added to taxable adjusted gross income in the 2012 taxable year, the deduction allowed by this subdivision applies to the first five taxable years beginning on or after January 1, 2013.

…

(d)        Other Adjustments. – In calculating North Carolina taxable income, a taxpayer must make the following adjustments to adjusted gross income.

(1)        The amount of inheritance or estate tax attributable to an item of income in respect of a decedent required to be included in gross income under the Code, adjusted as provided in G.S. 105‑134.5, 105‑134.6, and 105‑134.7, G.S. 105‑134.5 and G.S. 105‑134.6, may be deducted in the year the item of income is included. The amount of inheritance or estate tax attributable to an item of income in respect of a decedent is (i) the amount by which the inheritance or estate tax paid under Article 1 or 1A of this Chapter on property transferred to a beneficiary by a decedent exceeds the amount of the tax that would have been payable by the beneficiary if the item of income in respect of a decedent had not been included in the property transferred to the beneficiary by the decedent, (ii) multiplied by a fraction, the numerator of which is the amount required to be included in gross income for the taxable year under the Code, adjusted as provided in G.S. 105‑134.5, 105‑134.6, and 105‑134.7, G.S. 105‑134.5 and G.S. 105‑134.6, and the denominator of which is the total amount of income in respect of a decedent transferred to the beneficiary by the decedent. For an estate or trust, the deduction allowed by this subdivision shall be computed by excluding from the gross income of the estate or trust the portion, if any, of the items of income in respect of a decedent that are properly paid, credited, or to be distributed to the beneficiaries during the taxable year.

            The Secretary may provide to a beneficiary of an item of income in respect of a decedent any information contained on an inheritance or estate tax return that the beneficiary needs to compute the deduction allowed by this subdivision.

…

(3)        The taxpayer shall add to taxable adjusted gross income the amount of any recovery during the taxable year not included in taxable adjusted gross income, to the extent the taxpayer's deduction of the recovered amount in a prior taxable year reduced the taxpayer's tax imposed by this Part but, due to differences between the Code and this Part, did not reduce the amount of the taxpayer's tax imposed by the Code. The taxpayer may deduct from taxable adjusted gross income the amount of any recovery during the taxable year included in taxable adjusted gross income under section 111 of the Code, to the extent the taxpayer's deduction of the recovered amount in a prior taxable year reduced the taxpayer's tax imposed by the Code but, due to differences between the Code and this Part, did not reduce the amount of the taxpayer's tax imposed by this Part.

(4)        A taxpayer may deduct from taxable adjusted gross income the amount, not to exceed two thousand five hundred dollars ($2,500), contributed to an account in the Parental Savings Trust Fund of the State Education Assistance Authority established pursuant to G.S. 116‑209.25. In the case of a married couple filing a joint return, the maximum dollar amount of the deduction is five thousand dollars ($5,000).

(5)        The taxpayer shall add to taxable adjusted gross income the amount deducted from taxable income in a prior taxable year under subdivision (4) of this subsection to the extent this amount was withdrawn from the Parental Savings Trust Fund of the State Education Assistance Authority established pursuant to G.S. 116‑209.25 and not used to pay for the qualified higher education expenses of the designated beneficiary, unless the withdrawal was made without penalty under section 529 of the Code due to the death or permanent disability of the designated beneficiary.

(6)        A taxpayer who is an eligible firefighter or an eligible rescue squad worker may deduct from taxable adjusted gross income the sum of two hundred fifty dollars ($250.00). In the case of a married couple filing a joint return, each spouse may qualify separately for the deduction allowed under this subdivision. In order to claim the deduction allowed under this subdivision, the taxpayer must submit with the tax return any documentation required by the Secretary. An individual may not claim a deduction as both an eligible firefighter and as an eligible rescue squad worker in a single taxable year. The following definitions apply in this subdivision:

a.         Eligible firefighter. – An unpaid member of a volunteer fire department who attended at least 36 hours of fire department drills and meetings during the taxable year.

b.         Eligible rescue squad worker. – An unpaid member of a volunteer rescue or emergency medical services squad who attended at least 36 hours of rescue squad training and meetings during the taxable year.

…."

SECTION 5.(b)  G.S. 105‑151(a) reads as rewritten:

"(a)       An individual who is a resident of this State is allowed a credit against the taxes imposed by this Part for income taxes imposed by and paid to another state or country on income taxed under this Part, subject to the following conditions:

…

(2)        The fraction of the gross income, as calculated under the Code and adjusted as provided in G.S. 105‑134.6 and G.S. 105‑134.7, G.S. 105‑134.6, that is subject to income tax in another state or country shall be ascertained, and the North Carolina net income tax before credit under this section shall be multiplied by that fraction. The credit allowed is either the product thus calculated or the income tax actually paid the other state or country, whichever is smaller.

…."

SECTION 5.(c)  G.S. 105‑151.11(c) reads as rewritten:

"(c)       Limitations. – A nonresident or part‑year resident who claims the credit allowed by this section shall reduce the amount of the credit by multiplying it by the fraction calculated under G.S. 105‑134.5(b) or (c), as appropriate. No credit shall be allowed under this section for amounts deducted from gross income in calculating North Carolina taxable income under the Code. income. The credit allowed by this section may not exceed the amount of tax imposed by this Part for the taxable year reduced by the sum of all credits allowable, except for payments of tax made by or on behalf of the taxpayer."

SECTION 5.(d)  G.S. 105‑151.30(e) reads as rewritten:

"(e)       No Double Benefit. – A taxpayer who claims a credit under this section must add back to taxable adjusted gross income any amount deducted under G.S. 105‑134.6(a2)the Code for the donation of the oyster shells."

SECTION 5.(e)  G.S. 105‑152 reads as rewritten:

"§ 105‑152.  Income tax returns.

…

(c)        Information Required With Return. – The income tax return shall show the taxable adjusted gross income and adjustments required by this Part and any other information the Secretary requires. The Secretary may require some or all individuals required to file an income tax return to attach to the return a copy of their federal income tax return for the taxable year. The Secretary may require a taxpayer to provide the Department with copies of any other return the taxpayer has filed with the Internal Revenue Service and to verify any information in the return.

(d)        Secretary May Require Additional Information. – When the Secretary has reason to believe that any taxpayer conducts a trade or business in a way that directly or indirectly distorts the taxpayer's taxable adjusted gross income or North Carolina taxable income, the Secretary may require any additional information for the proper computation of the taxpayer's taxable adjusted gross income and North Carolina taxable income. In computing the taxpayer's taxable adjusted gross income and North Carolina taxable income, the Secretary shall consider the fair profit that would normally arise from the conduct of the trade or business.

…."

SECTION 5.(f)  G.S. 105‑160.1 reads as rewritten:

"§ 105‑160.1.  Definitions.

The definitions provided in Part 2 of this Article shall apply in this Part except where the context clearly indicates a different meaning. In addition, as used in this Part, "taxable income" is defined in section 63 of the Code."

SECTION 5.(g)  G.S. 105‑160.2 reads as rewritten:

"§ 105‑160.2.  Imposition of tax.

The tax imposed by this Part shall apply applies to the taxable income of estates and trusts as determined under the provisions of the Code except as otherwise provided in this Part. The taxable income of an estate or trust shall be is the same as taxable income for such an estate or trust under the provisions of the Code, adjusted as provided in G.S. 105‑134.6 and G.S. 105‑134.7, G.S. 105‑134.6, except that the adjustments provided in G.S. 105‑134.6 and G.S. 105‑134.7 shall be are apportioned between the estate or trust and the beneficiaries based on the distributions made during the taxable year. The tax shall be is computed on the amount of the taxable income of the estate or trust that is for the benefit of a resident of this State, or for the benefit of a nonresident to the extent that the income (i) is derived from North Carolina sources and is attributable to the ownership of any interest in real or tangible personal property in this State or (ii) is derived from a business, trade, profession, or occupation carried on in this State. For purposes of the preceding sentence, taxable income and gross income shall be is computed subject to the adjustments provided in G.S. 105‑134.6 and G.S. 105‑134.7. G.S. 105‑134.6. The tax on the amount computed above shall be is at the rates levied in G.S. 105‑134.2(a)(3). The fiduciary responsible for administering the estate or trust shall pay theThe tax computed under the provisions of this Part shall be paid by the fiduciary responsible for administering the estate or trust.Part."

SECTION 6.(a)  The first sentence of G.S. 105‑134.7(a)(3) is recodified as G.S. 105‑134.6(c)(17).

SECTION 6.(b)  G.S. 105‑134.7(a)(6) is recodified as G.S. 105‑134.6(c)(18) and reads as rewritten:

"(18)    A loss or deduction that was incurred or paid and deducted from State taxable income in a taxable year beginning before January 1, 1989, and is carried forward and deducted in a taxable year beginning on or after January 1, 1989, under the Code shall be added to taxable income.Code."

SECTION 6.(c)  The second sentence of G.S. 105‑134.7(a)(3) is recodified as G.S. 105‑134.6(b)(24).

SECTION 6.(d)  G.S. 134.7(a)(7) is recodified as G.S. 105‑134.6(d)(9).

SECTION 6.(e)  G.S. 134.7(b) is recodified as G.S. 105‑134.6(d)(10).

SECTION 6.(f)  The remainder of G.S. 105‑134.7 is repealed.

SECTION 7.  G.S. 105‑151.18 reads as rewritten:

"§ 105‑151.18.  Credit for the disabled.

(a)        Disabled Taxpayer. – A taxpayer who (i) is retired on disability, (ii) at the time of retirement, was permanently and totally disabled, and (iii) claims a federal income tax credit under section 22 of the Code for the taxable year, is allowed as a credit against the tax imposed by this Part an amount equal to one‑third of the amount of the federal income tax credit for which the taxpayer is eligible under section 22 of the Code.

(b)        Disabled Dependent. – If a dependent or spouse for whom a taxpayer is allowed an exemption under the Code is permanently and totally disabled, the taxpayer is allowed a credit against the tax imposed by this Part. In order to claim the credit allowed by this subsection, the taxpayer must attach to the tax return on which the credit is claimed a statement from a physician or local health department certifying that the dependent or spouse for whom the credit is claimed is permanently and totally disabled, as defined in this section. The amount of the credit allowed shall be is determined as follows: For a taxpayer whose North Carolina adjusted gross taxable income does not exceed the appropriate income amount provided in the table below, based on the taxpayer's filing status, the credit allowed is the appropriate initial credit provided in the table below. For a taxpayer whose North Carolina adjusted gross taxable income does exceed the appropriate income amount, the credit allowed is the appropriate initial credit reduced by four dollars ($4.00) for every one thousand dollars ($1,000) by which the taxpayer's North Carolina adjusted gross taxable income exceeds the appropriate income amount.

                                                                                            Initial                                      Income

Filing Status                                                                       Credit                                      Amount

Head of Household                                                              $64.00                                     $16,000

Surviving Spouse or Joint Return                                          $80.00                                     $20,000

Single                                                                                  $48.00                                     $12,000

Married Filing Separately                                                     $40.00                                     $10,000

(c)        Definitions. – The following definitions apply in this section:

(1)        North Carolina Adjusted Gross Income. taxable income. – Defined in G.S. 105‑134.5.Adjusted gross income, as determined under the Code, adjusted as provided in G.S. 105‑134.6 and G.S. 105‑134.7.

(2)        Permanently and Totally Disabled. totally disabled. – Unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than 12 months. For the purpose of this section, a minor is permanently and totally disabled if the impact of the impairment on the minor's ability to function is equivalent in severity to that which would make an adult unable to engage in any substantial gainful activity.

(d)        Limitations. – A nonresident or part‑year resident who claims the credit allowed by this section shall reduce the amount of the credit by multiplying it by the fraction calculated under G.S. 105‑134.5(b) or (c), as appropriate. The credit allowed under this section may not exceed the amount of tax imposed by this Part for the taxable year reduced by the sum of all credits allowable, except payments of tax made by or on behalf of the taxpayer."

SECTION 8.  G.S. 105‑164.3 reads as rewritten:

"§ 105‑164.3.  Definitions.

The following definitions apply in this Article:

…

(37b)    School instructional material. – Written material commonly used by a student in a course of study as a reference and to learn the subject being taught. The following is an all‑inclusive list:

a.         Reference books.

b.         Reference maps and globes.

c.         Textbooks.

d.         Workbooks.Defined in the Streamlined Agreement.

…

(44)      Storage. – The keeping or retention in this State for any purpose, except sale in the regular course of business, of tangible personal property or digital property purchased from a retailer. The term does not include a purchaser's storage of tangible personal property or digital property in any of the following circumstances:

a.         When the purchaser is able to document that at the time the purchaser acquires the property the property is designated for the purchaser's use outside the State and the purchaser subsequently takes it outside the State and uses it solely outside the State.

b.         When the purchaser acquires the property to process, fabricate, manufacture, or otherwise incorporate it into or attach it to other property for the purchaser's use outside the State and, after incorporating or attaching the purchased property, the purchaser subsequently takes the other property outside the State and uses it solely outside the State.

…

(45a)    Streamlined Agreement. – The Streamlined Sales and Use Tax Agreement as amended as of December 19, 2011.May 24, 2012.

…."

SECTION 9.  G.S. 105‑164.4(a)(3) reads as rewritten:

"(3)      A tax at the general rate applies to the gross receipts derived from the rental of an accommodation. The tax does not apply to (i) a private residence or cottage that is rented for fewer than 15 days in a calendar year; (ii) an accommodation rented to the same person for a period of 90 or more continuous days; or (iii) an accommodation arranged or provided to a person by a school, camp, or similar entity where a tuition or fee is charged to the person for enrollment in the school, camp, or similar entity.

Gross receipts derived from the rental of an accommodation include the sales price of the rental of the accommodation. The sales price of the rental of an accommodation is determined as if the rental were a rental of tangible personal property. The sales price of the rental of an accommodation marketed by a facilitator includes charges designated as facilitation fees and any other charges necessary to complete the rental.

A person who provides an accommodation that is offered for rent is considered a retailer under this Article. A facilitator must report to the retailer with whom it has a contract the sales price a consumer pays to the facilitator for an accommodation rental marketed by the facilitator. A retailer must notify a facilitator when an accommodation rental marketed by the facilitator is completed and, within three business days of receiving the notice, and the facilitator must send the retailer the portion of the sales price the facilitator owes the retailer and the tax due on the sales price. price no later than 10 days after the end of each calendar month. A facilitator that does not send the retailer the tax due on the sales price is liable for the amount of tax the facilitator fails to send. A facilitator is not liable for tax sent to a retailer but not remitted by the retailer to the Secretary. Tax payments received by a retailer from a facilitator are held in trust by the retailer for remittance to the Secretary. A retailer that receives a tax payment from a facilitator must remit the amount received to the Secretary. A retailer is not liable for tax due but not received from a facilitator. The requirements imposed by this subdivision on a retailer and a facilitator are considered terms of the contract between the retailer and the facilitator.

A person who, by written contract, agrees to be the rental agent for the provider of an accommodation is considered a retailer under this Article and is liable for the tax imposed by this subdivision. The liability of a rental agent for the tax imposed by this subdivision relieves the provider of the accommodation from liability. A rental agent includes a real estate broker, as defined in G.S. 93A‑2.

The following definitions apply in this subdivision:

a.         Accommodation. – A hotel room, a motel room, a residence, a cottage, or a similar lodging facility for occupancy by an individual.

b.         Facilitator. – A person who is not a rental agent and who contracts with a provider of an accommodation to market the accommodation and to accept payment from the consumer for the accommodation."

SECTION 10.  G.S. 105‑164.6(c) reads as rewritten:

"(c)       Credit. – A credit is allowed against the tax imposed by this section for the following:

(1)        The amount of sales or use tax paid on the item to this State. State, provided the tax is stated and charged separately on the invoices or other documents of the retailer given to the purchaser at the time of the sale, except as otherwise provided in G.S. 105‑164.7, or provided the retailer remitted the tax subsequent to the sale and the purchaser obtains such documentation. Payment of sales or use tax to this State on an item by a retailer extinguishes the liability of a purchaser for the tax imposed under this section.

(2)        The amount of sales or use tax due and paid on the item to another state. If the amount of tax paid to the other state is less than the amount of tax imposed by this section, the difference is payable to this State. The credit allowed by this subdivision does not apply to tax paid to a state that does not grant a similar credit for sales or use taxes paid in North Carolina."

SECTION 11.(a)  G.S. 105‑164.13 reads as rewritten:

"§ 105‑164.13.  Retail sales and use tax.

The sale at retail and the use, storage, or consumption in this State of the following tangible personal property, digital property, and services are specifically exempted from the tax imposed by this Article:

…

(26)      Food and prepared food sold not for profit by public or private school cafeterias within school buildings during the regular school day.

(26a)    Food and prepared food sold not for profit by a public school cafeteria to a child care center that participates in the Child and Adult Care Food Program of the Department of Health and Human Services.

(27)      Meals Prepared food and food products served to students in dining rooms regularly operated by State or private educational institutions or student organizations thereof.

…

(31a)    Food and prepared food sold by a church or religious organization not operated for profit when the proceeds of the sales are actually used for religious activities.

…

(33a)    Tangible personal property sold by a retailer to a purchaser within or withoutinside or outside this State, when the property is delivered by the retailer in this State to a common carrier or to the United States Postal Service for delivery to the purchaser or the purchaser's designees outside this State and the purchaser does not subsequently use the property in this State. This exemption includes printed material sold by a retailer to a purchaser inside or outside this State when the printed material is delivered directly to a mailing house, or to a common carrier, or to the United States Postal Service for delivery to a mailing house in this State that will preaddress and presort the material and deliver it to a common carrier or to the United States Postal Service for delivery to recipients outside this State designated by the purchaser.

…

(43a)    Computer software that meets any of the following descriptions:

a.         It is designed purchased to run on an enterprise server operating system. The exemption includes a purchase or license of computer software for high‑volume, simultaneous use on multiple computers, that is housed or maintained on an enterprise server or end users' computers. The exemption includes software designed to run a computer system, an operating program, or application software.

b.         It is sold to a person who operates a datacenter and is used within the datacenter.

c.         It is sold to a person who provides cable service, telecommunications service, or video programming and is used to provide ancillary service, cable service, Internet access service, telecommunications service, or video programming.

…

(57)      Fuel and electricity sold to a manufacturer for use in connection with the operation of a manufacturing facility. The exemption does not apply to electricity used at a facility at which the primary activity is not manufacturing.

…."

SECTION 11.(b)  G.S. 105‑164.13A reads as rewritten:

"§ 105‑164.13A.  Service charges on food, beverages, or meals.prepared food.

When a service charge is imposed on food, beverages, or meals, prepared food, so much of the service charge that does not exceed twenty percent (20%) of the sales price is considered a tip and is specifically exempted from the tax imposed by this Article if it meets both of the following conditions:

(1)        Is separately stated in the price list, menu, or written proposal and also in the invoice or bill.

(2)        Is turned over to the personnel directly involved in the service of the food, beverages, or meals, prepared food, in accordance with G.S. 95‑25.6."

SECTION 12.  G.S. 105‑164.14(b) reads as rewritten:

"(b)      Nonprofit Entities and Hospital Drugs. – A nonprofit entity is allowed a semiannual refund of sales and use taxes paid by it under this Article on direct purchases of tangible personal property and services, other than electricity, telecommunications service, and ancillary service, for use in carrying on the work of the nonprofit entity. Sales and use tax liability indirectly incurred by a nonprofit entity through reimbursement to an employee of the entity for the purchase of tangible personal property and services, other than electricity, telecommunications service, and ancillary service, for use in carrying on the work of the nonprofit entity is considered a direct purchase by the entity. Sales and use tax liability indirectly incurred by a nonprofit entity on building materials, supplies, fixtures, and equipment that become a part of or annexed to any building or structure that is owned or leased by the nonprofit entity and is being erected, altered, or repaired for use by the nonprofit entity for carrying on its nonprofit activities is considered a sales or use tax liability incurred on direct purchases by the nonprofit entity. A request for a refund must be in writing and must include any information and documentation required by the Secretary. A request for a refund for the first six months of a calendar year is due the following October 15; a request for a refund for the second six months of a calendar year is due the following April 15.

The refunds allowed under this subsection do not apply to an entity that is owned and controlled by the United States or to an entity that is owned or controlled by the State and is not listed in this subsection. A hospital that is not listed in this subsection is allowed a semiannual refund of sales and use taxes paid by it on medicines and over‑the‑counter drugs purchased for use in carrying out its work. The following nonprofit entities are allowed a refund under this subsection:

(1)        Hospitals not operated for profit, including hospitals and medical accommodations operated by an authority or other public hospital described in Article 2 of Chapter 131E of the General Statutes.

(2)        An organization that is exempt from income tax under section 501(c)(3) of the Code, other than an organization that is properly classified in any of the following major group areas of the National Taxonomy of Exempt Entities:

a.         Community Improvement and Capacity Building.

b.         Public and Societal Benefit.

c.         Mutual and Membership Benefit.

(2a)      An organization that is exempt from income tax under the Code and is one of the following:

a.         A volunteer fire department.

b.         A volunteer emergency medical services squad.

(2b)      An organization that is a single member LLC that is disregarded for income tax purposes and satisfies all of the following conditions:

a.         The owner of the LLC is an organization that is exempt from income tax under section 501(c)(3) of the Code.

b.         The LLC is a nonprofit entity that would be eligible for an exemption under 501(c)(3) of the Code if it were not disregarded for income tax purposes.

c.         The LLC is not an organization that would be properly classified in any of the major group areas of the National Taxonomy of Exempt Entities listed in subdivision (2) of this subsection."

SECTION 13.  G.S. 105‑164.27A reads as rewritten:

"§ 105-164.27A.  Direct pay permit.

(a)        General. – A general direct pay permit authorizes its holder to purchase any tangible personal property, digital property, or service without paying tax to the seller and authorizes the seller to not collect any tax on a sale to the permit holder. A person who purchases an item under a direct pay permit issued under this subsection is liable for use tax due on the purchase. The tax is payable when the property is placed in use or the service is received. A direct pay permit issued under this subsection does not apply to taxes imposed under G.S. 105‑164.4 on electricity.sales of electricity or the gross receipts derived from rentals of accommodations.

A person who purchases an item for storage, use, or consumption in this State whose tax status cannot be determined at the time of the purchase because of one of the reasons listed below may apply to the Secretary for a general direct pay permit:

(1)        The place of business where the item will be stored, used, or consumed is not known at the time of the purchase and a different tax consequence applies depending on where the item is used.

(2)        The manner in which the item will be stored, used, or consumed is not known at the time of the purchase and one or more of the potential uses is taxable but others are not taxable.

(a1)      Direct Mail. – A person who purchases direct mail may apply to the Secretary for a direct pay permit for the purchase of direct mail. A direct pay permit issued for direct mail does not apply to any purchase other than the purchase of direct mail.

...."

SECTION 14.  G.S. 105‑164.35 is repealed.

SECTION 15.  G.S. 105‑164.42L reads as rewritten:

"§ 105‑164.42L.  Databases on taxing jurisdictions.Liability relief for erroneous information or insufficient notice by Department.

(a)        The Secretary may develop databases that provide information on the boundaries of taxing jurisdictions and the tax rates applicable to those taxing jurisdictions. A person who relies on the information provided in these databases is not liable for underpayments of tax attributable to erroneous information provided by the Secretary in those databases.

(b)        The Secretary may develop a taxability matrix that provides information on the taxability of certain items. A person who relies on the information provided in the taxability matrix is not liable for underpayments of tax attributable to erroneous information provided by the Secretary in the taxability matrix.

(c)        A retailer is not liable for an underpayment of tax attributable to a rate change when the State fails to provide for at least 30 days between the enactment of the rate change and the effective date of the rate change if the conditions of this subsection are satisfied. However, if the State establishes the retailer fraudulently failed to collect tax at the new rate or solicited customers based on the immediately preceding effective rate, this liability relief does not apply. Both of the following conditions must be satisfied for liability relief:

(1)        The retailer collected tax at the immediately preceding rate.

(2)        The retailer's failure to collect at the newly effective rate does not extend beyond 30 days after the date of enactment of the new rate."

SECTION 16.  G.S. 105‑187.52(b) reads as rewritten:

"(b)      Credit. – A credit is allowed against the tax imposed by this Article for the amount of a sales or use tax, privilege or excise tax, or substantially equivalent tax due and paid to another state. state or for the amount of sales and use tax paid to this State. The credit allowed by this subsection does not apply to tax paid to another state that does not grant a similar credit for the privilege tax paid in North Carolina."

SECTION 17.  G.S. 105‑236.1(a) reads as rewritten:

"(a)       General. – The Secretary may appoint employees of the Unauthorized Substances Tax Section of the Tax Enforcement Division to serve as revenue law enforcement officers having the responsibility and subject‑matter jurisdiction to enforce the excise tax on unauthorized substances imposed by Article 2D of this Chapter.

The Secretary may appoint up to 11 employees of the Motor Fuels Tax Investigations Section of the Tax Enforcement Division to serve as revenue law enforcement officers having the responsibility and subject‑matter jurisdiction to enforce the taxes on motor fuels imposed by Articles 36B, 36C, and 36D of this Chapter and by Chapter 119 of the General Statutes.

The Secretary may appoint employees of the Criminal Investigations Section of the Tax Enforcement Division to serve as revenue law enforcement officers having the responsibility and subject‑matter jurisdiction to enforce the following tax violations and criminal offenses:

(1)        The felony and misdemeanor tax violations in G.S. 105‑236.

(2)        The misdemeanor tax violations in G.S. 105‑449.117 and G.S. 105‑449.120.

(3)        The following criminal offenses when they involve a tax imposed under Chapter 105 of the General Statutes:

a.         G.S. 14‑91 (Embezzlement of State Property).

b.         G.S. 14‑92 (Embezzlement of Funds).

c.         G.S. 14‑100 (Obtaining Property By False Pretenses).

c1.       G.S. 14‑113.20 (Identity Theft).

c2.       G.S. 14‑133.20A (Trafficking in Stolen Identities).

d.         G.S. 14‑119 (Forgery).

e.         G.S. 14‑120 (Uttering Forged Paper).

f.          G.S. 14‑401.18 (Sale of Certain Packages of Cigarettes)."

SECTION 18.  G.S. 105‑256(a)(9) is repealed.

SECTION 19.  G.S. 105‑259(b) reads as rewritten:

"(b)      Disclosure Prohibited. – An officer, an employee, or an agent of the State who has access to tax information in the course of service to or employment by the State may not disclose the information to any other person except as provided in this subsection. Standards used or to be used for the selection of returns for examination and data used or to be used for determining the standards may not be disclosed for any purpose. All other tax information may be disclosed only if the disclosure is made for one of the following purposes:

…

(15a)    To furnish to the head of the appropriate State or local, State, or federal law enforcement agency agency, including a prosecutorial agency, information concerning the commission of an offense under the jurisdiction of that agency discovered by when the Department during has initiated a criminal investigation of the taxpayer.

…

(25)      To provide public access to a database containing the names and registration numbers of retailers who are registered to collect sales and use taxes under Article 5 of this Chapter.

…

(29)      To provide to the Economic Investment Committee established pursuant to G.S. 143B‑437.48 G.S. 143B‑437.54 information necessary to implement Part 2F of Article 10 of Chapter 143B of the General Statutes.economic development programs under the responsibility of the Committee."

SECTION 20.  Section 6A.3(d) of S.L. 2012‑142 reads as rewritten:

"SECTION 6A.3.(d) Funding. – Of funds generated from increased revenues or cost savings as compared to the baselines established by subdivision (1) of subsection (c) of this section, in the General Fund,  the Highway Fund, and that State portion of the Unauthorized Substance Tax collections of the Special Revenue Fund, the sum of up to a total of sixteen million dollars ($16,000,000) may be used authorized by the Office of State Budget and Management to make purchases related to the implementation of the additional public‑private arrangement authorized by this section, including payment for services from non‑State entities."

SECTION 21.  G.S. 105‑113.112 reads as rewritten:

"§ 105‑113.112.  Confidentiality of information.

(a)        Information obtained by the Department in the course of administering the tax imposed by this Article, including information on whether the Department has issued a revenue stamp to a person, is confidential tax information and is subject to the following restrictions on disclosure:

(1)        G.S. 105‑259 prohibits the disclosure of the information, except in the limited circumstances provided in that statute.

(2)        The information provisions of G.S. 105‑259.

(b)        Information obtained by the Department from the taxpayer in the course of administering the tax imposed by this Article, including information on whether the Department has issued a revenue stamp to a person, may not be used as evidence, as defined in G.S. 15A‑971, by a prosecutor in a criminal prosecution of the taxpayer for an offense other than an offense under this Article or under Article 9 of this Chapter. related to the manufacturing, possession, transportation, distribution, or sale of the unauthorized substance. Under this prohibition, no officer, employee, or agent of the Department may testify about thethis information in a criminal prosecution of the taxpayer for an offense related to the manufacturing, possession, transportation, distribution, or sale of the unauthorized substance.other than an offense under this Article or under Article 9 of this Chapter. This subdivision subsection implements the protections against double jeopardy and self‑incrimination set out in Amendment V of the United States Constitution and the restrictions in it apply regardless of whether information may be disclosed under G.S. 105‑259. This subdivision does not apply to information obtained from a source other than an employee, officer, or agent of the Department. This subdivision does not prohibit testimony by an officer, employee, or agent of the Department concerning an offense committed against that individual in the course of administering this Article. An officer, employee, or agent of the Department who provides evidence or testifies in violation of this subdivision is guilty of a Class 1 misdemeanor."

SECTION 22.(a)  G.S. 105‑113.4A reads as rewritten:

"§ 105‑113.4A.  Licenses.

(a)        General. – To obtain a license required by this Article, an applicant must apply to file an application with the Secretary on a form provided by the Secretary and pay the tax due for the license. An application must include the applicant's name, address, federal employer identification number, and any other information required by the Secretary. A license is not transferable or assignable and must be displayed at the place of business for which it is issued.

(b)        Requirements. – An applicant for a license must meet the following requirements:

(1)        If the applicant is a corporation, the applicant must either be incorporated in this State or be authorized to transact business in this State.

(2)        If the applicant for a license is a limited liability company, the applicant must either be organized in this State or be authorized to transact business in this State.

(3)        If the applicant for a license is a limited partnership, the applicant must either be formed in this State or be authorized to transact business in this State.

(4)        If the applicant for a license is an individual or a general partnership, the applicant must designate an agent for service of process and give the agent's name and address.

(c)        Denial. – The Secretary may investigate an applicant for a license required under this Article to determine if the information the applicant submits with the application is accurate and if the applicant is eligible to be licensed under this Article. The Secretary may refuse to issue a license to an applicant that has done any of the following:

(1)        Submitted false or misleading information on its application.

(2)        Had a license issued under this Article cancelled by the Secretary for cause.

(3)        Had a tobacco products license or registration issued by another state cancelled for cause.

(4)        Been convicted of fraud or misrepresentation.

(5)        Been convicted of any other offense that indicates the applicant may not comply with this Article if issued a license.

(6)        Failed to remit payment for a tax debt under this Chapter. The term "tax debt" has the same meaning as defined in G.S. 105‑243.1.

(7)        Failed to file a return due under this Chapter.

(b)(d)   Refund. – A refund of a license tax is allowed only when the tax was collected or paid in error. No refund is allowed when a license holder surrenders a license or the Secretary revokes a license.

(c)(e)    Duplicate or Amended License. – Upon application to the Secretary, a license holder may obtain without charge one of the following:a duplicate or amended license as provided in this subsection. A duplicate or amended license must state that it is a duplicate or amended license, as appropriate.

(1)        A duplicate license, if the license holder establishes that the original license has been lost, destroyed, or defaced.

(2)        An amended license, if the license holder establishes that the location of the place of business for which the license was issued has changed.

A duplicate or amended license shall state that it is a duplicate or amended license, as appropriate.

(f)         Information on License. – The Secretary must include the following information on each license required by this Article:

(1)        The legal name of the license holder.

(2)        The name under which the license holder conducts business.

(3)        The physical address of the place of business of the license holder.

(4)        The account number assigned to the license by the Department.

(g)        Records. – The Secretary must keep a record of the following:

(1)        Applicants for a license under this Article.

(2)        Persons to whom a license has been issued under this Article.

(3)        Persons that hold a current license issued under this Article, by license category.

(h)        Lists. – The Secretary must provide the list required under subsection (g) of this section upon request of a manufacturer that is a license holder under this Article. The list must state the name, account number, and business address of each license holder on the list."

SECTION 22.(b)  G.S. 105‑113.4B reads as rewritten:

"§ 105‑113.4B.  Reasons why the Secretary can cancel a license.

(a)        Reasons. – The Secretary may cancel a license issued under this Article upon the written request of the license holder. The Secretary may summarily cancel the license of a license holder when the Secretary finds that the license holder is incurring liability for the tax imposed under this Article after failing to pay a tax when due under this Article. In addition, the Secretary may cancel the license of a license holder that commits one or more of the following acts after holding a hearing on whether the license should be cancelled:

(1)        A violation of this Article.Fails to obtain a license required by this Article.

(2)        Willfully fails to file a return required by this Article.

(3)        Willfully fails to pay a tax when due under this Article.

(4)        Makes a false statement in an application or return required under this Article.

(5)        Fails to keep records as required by this Article.

(6)        Refuses to allow the Secretary or a representative of the Secretary to examine the person's books, accounts, and records concerning tobacco product.

(7)        Fails to disclose the correct amount of tobacco product taxable in this State.

(8)        Fails to file a replacement bond or an additional bond if required by the Secretary under this Article.

(2)(9)   A violation of Violates G.S. 14‑401.18.

(b)        Procedure. – The Secretary must send a person whose license is summarily cancelled a notice of the cancellation and must give the person an opportunity to have a hearing on the cancellation within 10 days after the cancellation. The Secretary must give a person whose license may be cancelled after a hearing at least 10 days' written notice of the date, time, and place of the hearing. A notice of a summary license cancellation and a notice of hearing must be sent by registered mail to the last known address of the license holder.

(c)        Release of Bond. – When the Secretary cancels a license and the license holder has paid all taxes and penalties due under this Article, the Secretary must take one of the following actions concerning a bond or an irrevocable letter of credit filed by the license holder:

(1)        Return an irrevocable letter of credit to the license holder.

(2)        Return a bond to the license holder or notify the person liable on the bond and the license holder that the person is released from liability on the bond."

SECTION 22.(c)  G.S. 105‑113.13 reads as rewritten:

"§ 105‑113.13.  Secretary may investigate applicant for distributor's license and require a bond.bond or irrevocable letter of credit.

(a)        Investigation. – The Secretary may investigate an applicant for a distributor's license to determine if the information the applicant submits with the application is accurate and if the applicant is eligible to be licensed as a distributor. The Secretary may decline to issue a distributor's license to an applicant when the Secretary has reasonable cause to believe any of the following:

(1)        That the applicant has willfully withheld information requested by the Secretary for the purpose of determining the applicant's eligibility for the license.

(2)        That information submitted with the application is false or misleading.

(3)        That the application is not made in good faith.

(b)        Bond. – The Secretary may require a distributor to furnish a bond in an amount that adequately protects the State from loss if the distributor fails to pay taxes due under this Part. A bond shall be conditioned on compliance with this Part, shall be payable to the State, and shall be in the form required by the Secretary. The Secretary shall set the bond amount based on the anticipated tax liability of the distributor. The Secretary shall periodically review the sufficiency of bonds required of the distributor and shall increase the amount of a required bond if the bond amount no longer covers the anticipated tax liability of the distributor. The Secretary shall decrease the amount of a required bond if the Secretary finds that a lower bond amount will protect the State adequately from loss. For purposes of this section, a bond may also include an irrevocable letter of credit."

SECTION 22.(d)  This section becomes effective September 1, 2013.

SECTION 23.(a)  G.S. 105‑164.3 reads as rewritten:

"§ 105‑164.3.  Definitions.

The following definitions apply in this Article:

(1)        Advertising and promotional direct mail. – Printed material that meets the definition of "direct mail" and the primary purpose of which is to attract public attention to a product, person, business, or organization, or to attempt to sell, popularize, or secure financial support for a product, person, business, or organization. As used in this subdivision, "product" means tangible personal property, digital property, or a service.

(1)(1a) Analytical services. – Testing laboratories that are included in national industry 541380 of NAICS or medical laboratories that are included in national industry 621511 of NAICS.

(1a)(1b)     Ancillary service. – A service associated with or incidental to the provision of a telecommunications service. The term includes detailed communications billing, directory assistance, vertical service, and voice mail service. A vertical service is a service, such as call forwarding, caller ID, three‑way calling, and conference bridging, that allows a customer to identify a caller or manage multiple calls and call connections.

(1b)(1c)     through (1d)(1e) Reserved for future codification purposes.

(1e)(1f)      Audio work. – A series of musical, spoken, or other sounds, including a ringtone.

(1f)(1g)      Reserved for future codification purposes.

(1g)(1h)      Audiovisual work. – A series of related images and any sounds accompanying the images that impart an impression of motion when shown in succession.

(1h)(1i) Reserved for future codification purposes.

(1i)(1j) Bundled transaction. – A retail sale of two or more distinct and identifiable products, at least one of which is taxable and one of which is exempt, for one nonitemized price. Products are not sold for one nonitemized price if an invoice or another sales document made available to the purchaser separately identifies the price of each product. A bundled transaction does not include the retail sale of any of the following:

a.         A product and any packaging item that accompanies the product and is exempt under G.S. 105‑164.13(23).

b.         A sale of two or more products whose combined price varies, or is negotiable, depending on the products the purchaser selects.

c.         A sale of a product accompanied by a transfer of another product with no additional consideration.

d.         A product and the delivery or installation of the product.

e.         A product and any service necessary to complete the sale.

(1j)(1k)      Reserved for future codification purposes.

(1k)(1l)      Business. – An activity a person engages in or causes another to engage in with the object of gain, profit, benefit, or advantage, either direct or indirect. The term does not include an occasional and isolated sale or transaction by a person who does not claim to be engaged in business.

(1l)(1m)      Reserved for future codification purposes.

(1m)(1n)     Cable service. – The one‑way transmission to subscribers of video programming or other programming service and any subscriber interaction required to select or use the service.

...."

SECTION 23.(b)  G.S. 105‑164.4B(d) reads as rewritten:

"(d)      Exceptions. – This section does not apply to the following:

(1)        Telecommunications services. – Telecommunications services are sourced in accordance with G.S. 105‑164.4C.

(2)        Direct mail. – Direct mail that meets one of the following descriptions is sourced to the location where the property is delivered, and direct mail that does not meet one of these descriptions is sourced to the location from which the direct mail was shipped:is sourced as follows:

a.         Direct mail To the location where the direct mail is delivered if it (i) is purchased pursuant to a direct pay permit.permit issued under G.S. 105‑164.27A(a1) or (ii) when

b.         When the purchaser provides the seller with information to show the jurisdictions to which the direct mail is to be delivered.

b.         To the location from which the direct mail was shipped if (i) it is advertising and promotional direct mail and (ii) sub‑subdivision a. of this subdivision does not apply.

(3)        Florist wire sale. – A florist wire sale is sourced to the business location of the florist that takes an order for the sale. A "florist wire sale" is a sale in which a retail florist takes a customer's order and transmits the order to another retail florist to be filled and delivered."

SECTION 24.(a)  Section 7 of S.L. 2011‑296 reads as rewritten:

"SECTION 7. This act becomes effective October 1, 2011, and applies to instruments registered on or after that date. Sections 1 through 3 of this act expire July 1, 2013."

SECTION 24.(b)  The lead‑in language for Section 2.16 of S.L. 2012‑79 reads as rewritten:

"SECTION 2.16. Effective when it becomes law, but expiring at the same time as Section 1 of S.L. 2011‑296 expires (currently July 1, 2013), law, G.S. 161‑10(a), as rewritten by S.L. 2011‑296, reads as rewritten:"

SECTION 24.(c)  G.S. 161‑11.4 and G.S. 161‑11.6 are repealed.

SECTION 24.(d)  G.S. 143‑215.56A reads as rewritten:

"§ 143‑215.56A.  Floodplain Mapping Fund.

The Floodplain Mapping Fund is established as a special revenue fund. The Fund consists of the fees credited to it under G.S. 161‑11.4.G.S. 161‑11.5. Revenue in the fund may be used only to offset the Department's cost in preparing floodplain maps and performing its other duties under this Part."

SECTION 24.(e)  This section becomes effective July 1, 2013.

 

additional changes

SECTION 30.  G.S. 62A‑54(a) reads as rewritten:

"(a)       Retail Collection. – A seller of prepaid wireless telecommunications service shall collect the 911 service charge for prepaid wireless telecommunications service from the consumer on each retail transaction occurring in this State. The 911 service charge for prepaid wireless telecommunications service is in addition to the sales tax imposed on the sale or recharge of prepaid telephone calling service under G.S. 105‑164.4(a)(4d). The amount of the 911 service charge for prepaid wireless telecommunications service must be separately stated on an invoice, receipt, or other reasonable notification provided to the consumer by the seller at the time of the retail transaction. For purposes of this Article, a retail transaction is occurring in this State if the sale is sourced to this State under G.S. 105‑164.4B(a)."

SECTION 31.  G.S. 66‑255 reads as rewritten:

"§ 66‑255.  Specialty market or operator of an event registration list.

A specialty market operator or operator of an event where space is provided to a vendor must maintain a daily registration list of all specialty market or other vendors selling or offering goods for sale at the specialty market. market or other event. The registration list must clearly and legibly show each specialty market vendor's name, permanent address, and certificate of registration number. The specialty market operator or other event operator must require each specialty market vendor to exhibit a valid certificate of registration for visual inspection by the specialty market operator or other event operator at the time of registration, and must require each specialty market vendor to keep the certificate of registration conspicuously and prominently displayed, so as to be visible for inspection by patrons of the specialty market vendor at the places or locations at which the goods are offered for sale. Each daily registration list maintained pursuant to this section must be retained by the specialty market operator or other event operator for no less than two years and must at any time be made available upon request to any law enforcement officer.officer or the Secretary of Revenue or the Secretary's duly authorized agent. For purposes of the registration list, the exemptions in G.S. 66‑256 do not apply."

SECTION 32.  G.S. 105‑129.16H is amended by adding a new subsection to read:

"(d)      Sunset. – This section is repealed as of the date that G.S. 105‑129.16A is repealed. The repeal applies to donations made for renewable energy property placed in service on or after the date the section is repealed."

SECTION 33.  G.S. 105‑129.26(c) reads as rewritten:

"(c)       Forfeiture. – If the owner of a large or major recycling facility fails to make the required minimum investment or create the required number of new jobs within the period certified by the Secretary of Commerce under this section, the recycling facility no longer qualifies for the applicable recycling facility tax benefits provided in this Article and in Article 5 of this Chapter and forfeits all tax benefits previously received under those Articles. Forfeiture does not occur, however, if the failure was due to events beyond the owner's control. Upon forfeiture of tax benefits previously received, the owner is liable under Part 1 of Article 4 of this Chapter for a tax equal to the amount of all past taxes under Articles 3, 4, and 5 previously avoided as a result of the tax benefits received plus interest at the rate established in G.S. 105‑241.21, computed from the date the taxes would have been due if the tax benefits had not been received. The tax and interest are due 30 days after the date of the forfeiture. An owner that fails to pay the tax and interest is subject to the penalties provided in G.S. 105‑236."

SECTION 34.(a)  G.S. 105‑130.5, as amended by S.L. 2013‑10, reads as rewritten:

"§ 105‑130.5.  Adjustments to federal taxable income in determining State net income.

(a)        The following additions to federal taxable income shall be made in determining State net income:

…

(15)      For taxable years 2002‑2005, the applicable percentage of the amount allowed as a special accelerated depreciation deduction under section 168(k) or section 1400L of the Code, as set out in the table below. In addition, a taxpayer who was allowed a special accelerated depreciation deduction under section 168(k) or section 1400L of the Code in a taxable year beginning before January 1, 2002, and whose North Carolina taxable income in that earlier year reflected that accelerated depreciation deduction must add to federal taxable income in the taxpayer's first taxable year beginning on or after January 1, 2002, an amount equal to the amount of the deduction allowed in the earlier taxable year. These adjustments do not result in a difference in basis of the affected assets for State and federal income tax purposes. The applicable percentage is as follows:

Taxable Year                                     Percentage

2002                                                   100%

2003                                                     70%

2004                                                     70%

2005                                                       0%

(15a)    The applicable percentage of the amount allowed as a special accelerated depreciation deduction under section 168(k) or 168(n) of the Code for property placed in service after December 31, 2007, but before January 1, 2010. The applicable percentage under this subdivision is eighty‑five percent (85%).

            In addition, a taxpayer who was allowed a special accelerated depreciation deduction in taxable year 2007 or 2008 for property placed in service during that year, and whose North Carolina taxable income for that year reflected that accelerated depreciation deduction must make the adjustments set out below. These adjustments do not result in a difference in basis of the affected assets for State and federal income tax purposes.

a.         A taxpayer must add to federal taxable income in the taxpayer's 2008 taxable year an amount equal to the applicable percentage of the accelerated depreciation deduction reflected in the taxpayer's 2007 North Carolina taxable income.

b.         A taxpayer must add to federal taxable income in the taxpayer's 2009 taxable year an amount equal to the applicable percentage of the accelerated depreciation deduction reflected in the taxpayer's 2008 North Carolina taxable income.

(15b)    For taxable years 2010 through 2013, eighty‑five percent (85%) of the amount allowed as a special accelerated depreciation deduction under section 168(k) or 168(n) of the Code for property placed in service during the taxable year. In addition, for taxable year 2010, a taxpayer who placed property in service during the 2009 taxable year and whose North Carolina taxable income for the 2009 taxable year reflected a special accelerated depreciation deduction allowed for the property under section 168(k) of the Code must add eighty‑five percent (85%) of the amount of the special accelerated depreciation deduction. These adjustments do not result in a difference in basis of the affected assets for State and federal income tax purposes.

…

(23)      For taxable years 2010 and 2011, eighty‑five percent (85%) of the amount by which the taxpayer's expense deduction under section 179 of the Code for property placed in service in taxable year 2010 or 2011 exceeds the amount that would have been allowed for the respective taxable year under section 179 of the Code as of May 1, 2010. For purposes of this subdivision, the definition of section 179 property has the same meaning as under section 179 of the Code as of January 1, 2011. These adjustments do not result in a difference in basis of the affected assets for State and federal income tax purposes.

(23a)    For taxable years 2012 and 2013, eighty‑five percent (85%) of the amount by which the taxpayer's expense deduction under section 179 of the Code for property placed in service in taxable year 2012 or 2013 exceeds the amount that would have been allowed for the respective taxable year under section 179 of the Code as of May 1, 2010. For purposes of this subdivision, the definition of section 179 property has the same meaning as under section 179 of the Code as of January 2, 2013. These adjustments do not result in a difference in basis of the affected assets for State and federal income tax purposes.

(24)      The amount required to be added under G.S. 105‑130.5B when the State decouples from federal accelerated depreciation and expensing.

(b)        The following deductions from federal taxable income shall be made in determining State net income:

…

(21)      In each of the taxpayer's first five taxable years beginning on or after January 1, 2005, an amount equal to twenty percent (20%) of the amount added to taxable income in a previous year as accelerated depreciation under subdivision (a)(15) of this section.

(21a)    An amount equal to twenty percent (20%) of the amount added to federal taxable income as accelerated depreciation under subdivision (a)(15a) of this section. For a taxpayer who made the addition for accelerated depreciation in the 2008 taxable year, the deduction allowed by this subdivision applies to the first five taxable years beginning on or after January 1, 2009. For a taxpayer who made the addition for accelerated depreciation in the 2009 taxable year, the deduction allowed by this subdivision applies to the first five taxable years beginning on or after January 1, 2010.

(21b)    An amount equal to twenty percent (20%) of the amount added to federal taxable income as accelerated depreciation under subdivision (a)(15b) of this section. For the amount added to taxable income in the 2010 taxable year, the deduction allowed by this subdivision applies to the first five taxable years beginning on or after January 1, 2011. For the amount added to taxable income in the 2011 taxable year, the deduction allowed by this subdivision applies to the first five taxable years beginning on or after January 1, 2012. For the amount added to taxable income in the 2012 taxable year, the deduction allowed by this subdivision applies to the first five taxable years beginning on or after January 1, 2013. For the amount added to taxable income in the 2013 taxable year, the deduction allowed by this subdivision applies to the first five taxable years beginning on or after January 1, 2014.

…

(26)      An amount equal to twenty percent (20%) of the amount added to federal taxable income under subdivision (a)(23) of this section. For the amount added to taxable income in the 2010 taxable year, the deduction allowed by this subdivision applies to the first five taxable years beginning on or after January 1, 2011. For the amount added to taxable income in the 2011 taxable year, the deduction allowed by this subdivision applies to the first five taxable years beginning on or after January 1, 2012.

(26a)    An amount equal to twenty percent (20%) of the amount added to federal taxable income under subdivision (a)(23a) of this section. For the amount added to taxable income in the 2012 taxable year, the deduction allowed by this subdivision applies to the first five taxable years beginning on or after January 1, 2013. For the amount added to taxable income in the 2013 taxable year, the deduction allowed by this subdivision applies to the first five taxable years beginning on or after January 1, 2014.

(27)      The amount allowed as a deduction under G.S. 105‑130.5B as a result of an add‑back for federal accelerated depreciation and expensing.

…."

SECTION 34.(b)  Part 1 of Article 4 of Chapter 105 of the General Statutes is amended by adding a new section to read:

"§ 105‑130.5B.  Adjustments when State decouples from federal accelerated depreciation and expensing.

(a)        Special Accelerated Depreciation. – A taxpayer who takes a special accelerated depreciation deduction for property under section 168(k) or 168(n) of the Code must add to the taxpayer's federal taxable income eighty‑five percent (85%) of the amount taken for that year under those Code provisions. A taxpayer is allowed to deduct twenty percent (20%) of the add‑back in each of the first five taxable years following the year the taxpayer is required to include the add‑back in income.

(b)        2009 Depreciation Exception. – A taxpayer who placed property in service during the 2009 taxable year and whose North Carolina taxable income for the 2009 taxable year reflected a special accelerated depreciation deduction allowed for the property under section 168(k) of the Code must add eighty‑five percent (85%) of the amount of the special accelerated depreciation deduction to its federal taxable income for the 2010 taxable year. A taxpayer is allowed to deduct this add‑back under subsection (a) of this section as if it were for property placed in service in 2010.

(c)        Section 179 Expense. – For purposes of this subdivision, the definition of section 179 property has the same meaning as under section 179 of the Code as of January 2, 2013. A taxpayer who places section 179 property in service during a taxable year listed in the table below must add to the taxpayer's federal taxable income eighty‑five percent (85%) of the amount by which the taxpayer's expense deduction under section 179 of the Code exceeds the dollar and investment limitation listed in the table below for the taxable year.

A taxpayer is allowed to deduct twenty percent (20%) of the add‑back in each of the first five taxable years following the year the taxpayer is required to include the add‑back in income. The table below indicates the applicable five‑year period.

Taxable Year of               Dollar Limitation              Investment Limitation

85% Add‑Back

2010                               $250,000                                 $800,000

2011                               $250,000                                 $800,000

2012                               $250,000                                 $800,000

2013                                 $25,000                                 $125,000

(d)        Transfer of Assets. – A taxpayer that transfers an asset where the basis of the asset transferred carries over from the transferor to the transferee for federal income tax purposes is allowed to fully deduct the amount of accelerated depreciation added to federal taxable income in a prior year under this section less any portion of that amount previously deducted. The taxpayer may fully deduct any unused portion of the amount of accelerated depreciation in one of the following two ways:

(1)        A taxpayer required to file a return pursuant to G.S. 105‑130.17(e) may deduct any unused portion of the deduction on the taxpayer's final return.

(2)        A taxpayer who is not required to file a return pursuant to G.S. 105‑130.17(e) may carry back the unused portion of the deduction to the taxable year the accelerated depreciation was added to federal taxable income and deduct that amount from that taxable year's federal taxable income. A taxpayer may file an amended return for that taxable year for the purpose of claiming the deduction allowed by this subdivision.

(e)        Asset Basis. – The adjustments made in this section do not result in a difference in basis of the affected assets for State and federal income tax purposes."

SECTION 34.(c)  G.S. 105‑134.6, as amended by S.L. 2013‑10, reads as rewritten:

"§ 105‑134.6.  Modifications to adjusted gross income.

…

(b)        Other Deductions. – In calculating North Carolina taxable income, a taxpayer may deduct any of the following items to the extent those items are included in the taxpayer's adjusted gross income.

…

(17)      In each of the taxpayer's first five taxable years beginning on or after January 1, 2005, an amount equal to twenty percent (20%) of the amount added to taxable income in a previous year as accelerated depreciation under subdivision (c)(8) of this section.

(17a)    An amount equal to twenty percent (20%) of the amount added to federal taxable income as accelerated depreciation under subdivision (c)(8a) of this section. For a taxpayer who made the addition for accelerated depreciation in the 2008 taxable year, the deduction allowed by this subdivision applies to the first five taxable years beginning on or after January 1, 2009. For a taxpayer who made the addition for accelerated depreciation in the 2009 taxable year, the deduction allowed by this subdivision applies to the first five taxable years beginning on or after January 1, 2010.

(17b)    An amount equal to twenty percent (20%) of the amount added to federal taxable income as accelerated depreciation under subdivision (c)(8b) of this section. For the amount added to adjusted gross income in the 2010 taxable year, the deduction allowed by this subdivision applies to the first five taxable years beginning on or after January 1, 2011. For the amount added to taxable income in the 2011 taxable year, the deduction allowed by this subdivision applies to the first five taxable years beginning on or after January 1, 2012. For the amount added to taxable income in the 2012 taxable year, the deduction allowed by this subdivision applies to the first five taxable years beginning on or after January 1, 2013.For the amount added to adjusted gross income in the 2013 taxable year, the deduction allowed by this subdivision applies to the first five taxable years beginning on or after January 1, 2014.

…

(21)      An amount equal to twenty percent (20%) of the amount added to federal taxable income under subdivision (c)(15) of this section. For the amount added to taxable income in the 2010 taxable year, the deduction allowed by this subdivision applies to the first five taxable years beginning on or after January 1, 2011. For the amount added to taxable income in the 2011 taxable year, the deduction allowed by this subdivision applies to the first five taxable years beginning on or after January 1, 2012.

(21a)    An amount equal to twenty percent (20%) of the amount added to adjusted gross income under subdivision (c)(15a) of this section. For the amount added to adjusted gross income in the 2012 taxable year, the deduction allowed by this subdivision applies to the first five taxable years beginning on or after January 1, 2013. For the amount added to adjusted gross income in the 2013 taxable year, the deduction allowed by this subdivision applies to the first five taxable years beginning on or after January 1, 2014.

…

(23)      The amount allowed as a deduction under G.S. 105‑134.6A as a result of an add‑back for federal accelerated depreciation and expensing.

(c)        Additions. – In calculating North Carolina taxable income, a taxpayer must add any of the following items to the extent those items are not included in the taxpayer's adjusted gross income. For a taxpayer who deducts the itemized deductions amount under subsection (a2) of this section, the taxpayer must add any of the following items to the extent those items are included in the itemized deductions amount.

…

(8)        For taxable years 2002‑2005, the applicable percentage of the amount allowed as a special accelerated depreciation deduction under section 168(k) or section 1400L of the Code, as set out in the table below. In addition, a taxpayer who was allowed a special accelerated depreciation deduction under section 168(k) or section 1400L of the Code in a taxable year beginning before January 1, 2002, and whose North Carolina taxable income in that earlier year reflected that accelerated depreciation deduction must add to federal taxable income in the taxpayer's first taxable year beginning on or after January 1, 2002, an amount equal to the amount of the deduction allowed in the earlier taxable year. These adjustments do not result in a difference in basis of the affected assets for State and federal income tax purposes. The applicable percentage is as follows:

Taxable Year                                                          Percentage

2002                                                                      100%

2003                                                                        70%

2004                                                                        70%

2005                                                                          0%

(8a)      The applicable percentage of the amount allowed as a special accelerated depreciation deduction under section 168(k) or 168(n) of the Code for property placed in service after December 31, 2007, but before January 1, 2010. The applicable percentage under this subdivision is eighty‑five percent (85%).

            In addition, a taxpayer who was allowed a special accelerated depreciation deduction in taxable year 2007 or 2008 for property placed in service during that year, and whose North Carolina taxable income for that year reflected that accelerated depreciation deduction must make the adjustments set out below. These adjustments do not result in a difference in basis of the affected assets for State and federal income tax purposes.

a.         A taxpayer must add to federal taxable income in the taxpayer's 2008 taxable year an amount equal to the applicable percentage of the accelerated depreciation deduction reflected in the taxpayer's 2007 North Carolina taxable income.

b.         A taxpayer must add to federal taxable income in the taxpayer's 2009 taxable year an amount equal to the applicable percentage of the accelerated depreciation deduction reflected in the taxpayer's 2008 North Carolina taxable income.

(8b)      For taxable years 2010 through 2013, eighty‑five percent (85%) of the amount allowed as a special accelerated depreciation deduction under section 168(k) or 168(n) of the Code for property placed in service during the taxable year. In addition, for taxable year 2010, a taxpayer who placed property in service during the 2009 taxable year and whose North Carolina taxable income for the 2009 taxable year reflected a special accelerated depreciation deduction allowed for the property under section 168(k) of the Code must add eighty‑five percent (85%) of the amount of the special accelerated depreciation deduction. These adjustments do not result in a difference in basis of the affected assets for State and federal income tax purposes.

…

(15)      For taxable years 2010 and 2011, eighty‑five percent (85%) of the amount by which the taxpayer's expense deduction under section 179 of the Code for property placed in service in taxable year 2010 or 2011 exceeds the amount that would have been allowed for the respective taxable year under section 179 of the Code as of May 1, 2010. For purposes of this subdivision, the definition of section 179 property has the same meaning as under section 179 of the Code as of January 1, 2011. These adjustments do not result in a difference in basis of the affected assets for State and federal income tax purposes.(15a) For taxable years 2012 and 2013, eighty‑five percent (85%) of the amount by which the taxpayer's expense deduction under section 179 of the Code for property placed in service in taxable year 2012 or 2013 exceeds the amount that would have been allowed for the respective taxable year under section 179 of the Code as of May 1, 2010. For purposes of this subdivision, the definition of section 179 property has the same meaning as under section 179 of the Code as of January 2, 2013. These adjustments do not result in a difference in basis of the affected assets for State and federal income tax purposes.

(15a)    For taxable years 2012 and 2013, eighty five percent (85%) of the amount by which the taxpayer's expense deduction under section 179 of the Code for property placed in service in taxable year 2012 or 2013 exceeds the amount that would have been allowed for the respective taxable year under section 179 of the Code as of May 1, 2010. For purposes of this subdivision, the definition of section 179 property has the same meaning as under section 179 of the Code as of January 2, 2013. These adjustments do not result in a difference in basis of the affected assets for State and federal income tax purposes.

(16)      The amount required to be added under G.S. 105‑134.6A when the State decouples from federal accelerated depreciation and expensing.

…."

SECTION 34.(d)  Part 2 of Article 4 of Chapter 105 of the General Statutes is amended by adding a new section to read:

"§ 105‑134.6A.  Adjustments when State decouples from federal accelerated depreciation and expensing.

(a)        Special Accelerated Depreciation. – A taxpayer who takes a special accelerated depreciation deduction for that property under section 168(k) or 168(n) of the Code must add to the taxpayer's federal taxable income or adjusted gross income, as appropriate, eighty‑five percent (85%) of the amount taken for that year under those Code provisions. For taxable years before 2012, the taxpayer must add the amount to the taxpayer's federal taxable income. For taxable year 2012 and after, the taxpayer must add the amount to the taxpayer's adjusted gross income. A taxpayer is allowed to deduct twenty percent (20%) of the add‑back in each of the first five taxable years following the year the taxpayer is required to include the add‑back in income.

(b)        2009 Depreciation Exception. – A taxpayer who placed property in service during the 2009 taxable year and whose North Carolina taxable income for the 2009 taxable year reflected a special accelerated depreciation deduction allowed for the property under section 168(k) of the Code must add eighty‑five percent (85%) of the amount of the special accelerated depreciation deduction to its federal taxable income for the 2010 taxable year. A taxpayer is allowed to deduct this add‑back under subsection (a) of this section as if it were for property placed in service in 2010.

(c)        Section 179 Expense. – For purposes of this subdivision, the definition of section 179 property has the same meaning as under section 179 of the Code as of January 2, 2013. A taxpayer who places section 179 property in service during a taxable year listed in the table below must add to the taxpayer's federal taxable income or adjusted gross income, as appropriate, eighty‑five percent (85%) of the amount by which the taxpayer's expense deduction under section 179 of the Code exceeds the dollar and investment limitation listed in the table below for that taxable year. For taxable years before 2012, the taxpayer must add the amount to the taxpayer's federal taxable income. For taxable year 2012 and after, the taxpayer must add the amount to the taxpayer's adjusted gross income.

A taxpayer is allowed to deduct twenty percent (20%) of the add‑back in each of the first five taxable years following the year the taxpayer is required to include the add‑back in income. The table below indicates the applicable five‑year period.

Taxable Year of               Dollar Limitation              Investment Limitation

85% Add‑Back

2010                               $250,000                                 $800,000

2011                               $250,000                                 $800,000

2012                               $250,000                                 $800,000

2013                                 $25,000                                 $125,000

(d)        Transfer of Assets. – A taxpayer that transfers an asset where the basis of the asset transferred carries over from the transferor to the transferee for federal income tax purposes is allowed to fully deduct the amount of accelerated depreciation added to federal taxable income in a prior year under this section less any portion of that amount previously deducted. The taxpayer may fully deduct any unused portion of the amount of accelerated depreciation in one of the following two ways:

(1)        A taxpayer may deduct any unused portion of the deduction on the taxpayer's final return.

(2)        A taxpayer may carry back the unused portion of the deduction to the taxable year the accelerated depreciation was added to federal taxable income and deduct that amount from that taxable year's federal taxable income. A taxpayer may file an amended return for that taxable year for the purpose of claiming the deduction allowed by this subdivision.

(e)        Asset Basis. – The adjustments made in this section do not result in a difference in basis of the affected assets for State and federal income tax purposes."

SECTION 34.(e)  A taxpayer subject to income tax under Article 4 of Chapter 105 of the General Statutes for taxable years beginning on or after January 1, 2007, and on or before January 1, 2012, that meets the requirements of G.S. 105‑130.5B(d) or G.S. 105‑134.6A(d), may apply to the Department of Revenue for a refund of any excess tax paid to the extent the refund would be allowed under G.S. 105‑130.5B(d) or G.S. 105‑134.6A(d). A request for a refund must be made on or before January 1, 2014, and must include any supporting documentation that the Secretary of Revenue requires. A request for refund received after that date is barred.

SECTION 34.(f)  Subsections (a) through (d) of this section are effective for taxable years beginning on or after January 1, 2013. The remainder of this section is effective when it becomes law.

SECTION 35.  G.S. 105‑134.6(d)(23), as enacted by S.L. 2013‑10, reads as rewritten:

"(23)(10)    For taxable year 2013, the taxpayer who elects to itemize deductions under G.S. 105‑134.6(a2) may deduct the amount that would have been allowed as a charitable deduction under section 170 of the Code had the taxpayer not elected to take the income exclusion under 408(d)(8) of the Code. However, this deduction is not subject to the charitable contribution limitation and carryover provisions under section 170 of the Code, but it is subject to the overall limitation on itemized deductions under section 68 of the Code."

SECTION 36.  G.S. 105‑130.6A(a) reads as rewritten:

"(a)       Definitions. – The provisions of G.S. 105‑130.6 definitions in G.S. 105‑130.2 govern the determination of whether a corporation is a subsidiary or an affiliate of another corporation. In addition, the following definitions apply in this section:

(1)        Affiliated group. – A group that includes a corporation, all other corporations that are affiliates or subsidiaries of that corporation, and all other corporations that are affiliates or subsidiaries of another corporation in the group.

(2)        Bank holding company. – A holding company with an affiliate that is subject to the privilege tax on banks levied in G.S. 105‑102.3.

(3)        Dividends. – Dividends received that are not taxed under this Part.

(4)        Electric power holding company. – A holding company with an affiliate or a subsidiary that is subject to the franchise tax on electric power companies levied in G.S. 105‑116.

(5)        Expense adjustment. – The adjustment required by G.S. 105‑130.5(c)(3) for expenses related to dividends not taxed under this Part.

(6)        Holding company. – Defined in G.S. 105‑120.2."

SECTION 37.  G.S. 105‑151.26 reads as rewritten:

"§ 105‑151.26.  Credit for charitable contributions by nonitemizers.

A taxpayer who elects the standard deduction under G.S. 105‑134.6(a2) is allowed as a credit against the tax imposed by this Part an amount equal to seven percent (7%) of the taxpayer's excess charitable contributions. The taxpayer's excess charitable contributions are the amount by which the taxpayer's charitable contributions for the taxable year that would have been deductible under section 170 of the Code if the taxpayer had not elected the standard deduction exceed two percent (2%) of the taxpayer's adjusted gross income. For tax year 2013, the taxpayer's excess charitable contributions also include the amount by which the taxpayer's charitable contributions for the taxable year would have been deductible under section 170 of the Code had the taxpayer not elected to take the income exclusion under section 408(d)(8) of the Code that exceed two percent (2%) of the taxpayer's adjusted gross income. For purposes of computing this tax credit charitable contributions are not subject to the charitable contribution limitation and carryover provisions under section 170 of the Code.

No credit shall be allowed under this section for contributions for which a credit was claimed under G.S. 105‑151.12 or G.S. 105‑151.14. A nonresident or part‑year resident who claims the credit allowed by this section shall reduce the amount of the credit by multiplying it by the fraction calculated under G.S. 105‑134.5(b) or (c), as appropriate. The credit allowed under this section may not exceed the amount of tax imposed by this Part for the taxable year reduced by the sum of all credits allowed, except payments of tax made by or on behalf of the taxpayer."

SECTION 38.  G.S. 105‑159 reads as rewritten:

"§ 105‑159.  Federal corrections.

If a taxpayer's federal taxable income adjusted gross income or federal tax credit is corrected or otherwise determined by the federal government, the taxpayer must, within six months after being notified of the correction or final determination by the federal government, file an income tax return with the Secretary reflecting the corrected or determined taxable income. adjusted gross income or federal tax credit. The Secretary must propose an assessment for any additional tax due from the taxpayer as provided in Article 9 of this Chapter. The Secretary must refund any overpayment of tax as provided in Article 9 of this Chapter. A taxpayer who fails to comply with this section is subject to the penalties in G.S. 105‑236 and forfeits the right to any refund due by reason of the determination."

SECTION 39.(a)  G.S. 105‑163.3(d) reads as rewritten:

"(d)      Annual Statement; Report to Secretary. – A payer required to deduct and withhold from a contractor's compensation under this section shall furnish to the contractor duplicate copies of a written statement showing the following:

(1)        The payer's name, address, and taxpayer identification number.

(2)        The contractor's name, address, and taxpayer identification number.

(3)        The total amount of compensation paid during the calendar year.

(4)        The total amount deducted and withheld under this section during the calendar year.

This statement is due by January 31 following the calendar year. If the personal services for which the payer is paying are completed before the end of the calendar year and the contractor requests the statement, the statement is due within 45 days after the payer's last payment of compensation to the contractor. The Secretary may require the payer to include additional information on the statement.

Each payer shall file with the Secretary an annual report that compiles the information contained in each of the payer's statements to contractors and any other information required by the Secretary. Secretary in the manner required by the Secretary. This report is due on the date prescribed by the Secretary and is in lieu of the information report required by G.S. 105‑154."

SECTION 39.(b)  G.S. 105‑163.6(a) reads as rewritten:

"(a)       General. – A return is due quarterly or monthly as specified in this section. A return shall be filed with the Secretary on a form prepared in the manner required by the Secretary, shall report any payments of withheld taxes made during the period covered by the return, and shall contain any other information required by the Secretary.

Withheld taxes are payable quarterly, monthly, or semiweekly, as specified in this section. If the Secretary finds that collection of the amount of taxes this Article requires an employer to withhold is in jeopardy, the Secretary may require the employer to file a return or pay withheld taxes at a time other than that specified in this section."

SECTION 40.  G.S. 105‑164.4(a)(6b) reads as rewritten:

"(6b)    The general rate applies to the sales price of digital property that is sold at retail and that is listed in this subdivision, is delivered or accessed electronically, is not considered tangible personal property, and would be taxable under this Article if sold in a tangible medium. The tax applies regardless of whether the purchaser of the item has a right to use it permanently or to use it without making continued payments. The tax does not apply to a service that is taxed under another subdivision of this subsection or to an information service. The following property is subject to tax under this subdivision:

a.         An audio work.

b.         An audiovisual work.

c.         A book, a magazine, a newspaper, a newsletter, a report, or another publication.

d.         A photograph or a greeting card."

SECTION 41.  G.S. 105‑164.4C(a2) reads as rewritten:

"(a2)     Sourcing Exceptions. – The following telecommunications services and products are sourced in accordance with the principles set out in this subsection:

(1)        Mobile. – Mobile telecommunications service is sourced to the place of primary use, unless the service is prepaid wireless calling service or is air‑to‑ground radiotelephone service. Air‑to‑ground radiotelephone service is a postpaid calling service that is offered by an aircraft common carrier to passengers on its aircraft and enables a telephone call to be made from the aircraft. The sourcing principle in this subdivision applies to a service or product provided as an adjunct to mobile telecommunications service if the charge for the service or product is included within the term "charges for mobile telecommunications services" under the federal Mobile Telecommunications Sourcing Act.

(2)        Prepaid. – Prepaid telephone calling service is sourced in accordance with G.S. 105‑164.4B.

(3)        Private. – Private telecommunications service is sourced in accordance with subsection (e) of this section.

...."

SECTION 42.(a)  G.S. 105‑164.14(c)(24) reads as rewritten:

"(c)       Certain Governmental Entities. – A governmental entity listed in this subsection is allowed an annual refund of sales and use taxes paid by it under this Article on direct purchases of tangible personal property and services, other than electricity, telecommunications service, and ancillary service. Sales and use tax liability indirectly incurred by a governmental entity on building materials, supplies, fixtures, and equipment that become a part of or annexed to any building or structure that is owned or leased by the governmental entity and is being erected, altered, or repaired for use by the governmental entity is considered a sales or use tax liability incurred on direct purchases by the governmental entity for the purpose of this subsection. A request for a refund must be in writing and must include any information and documentation required by the Secretary. A request for a refund is due within six months after the end of the governmental entity's fiscal year.

This subsection applies only to the following governmental entities:

…

(24)      A public library created pursuant to an act of the General Assembly.Assembly or established pursuant to G.S. 153A‑270."

SECTION 42.(b)  This section becomes effective January 1, 2013, and applies to purchases occurring on or after that date.

SECTION 43.(a)  G.S. 105‑164.28 reads as rewritten:

"§ 105‑164.28.  Certificate of exemption.

(a)        Seller's Responsibility. – A seller who accepts a certificate of exemption from a purchaser has the burden of proving that the sale was not a retail sale unless all of the following conditions are met:Relief from Liability. – Except as provided in subsection (b) of this section, a seller is not liable for the tax otherwise applicable if the Secretary determines that a purchaser improperly claimed an exemption, or if the seller within 90 days of the sale meets the following requirements:

(1)        For a sale made in person, the seller obtains a certificate of exemption or a blanket certificate of exemption from a purchaser with which the seller has a recurring business relationship. If the purchaser provides a paper certificate, the certificate must be is signed by the purchaser and states state the purchaser's name, address, certificate of registration number, reason for exemption, and type of business. For purposes of this subdivision, a certificate received by fax is a paper certificate. If the purchaser does not provide a paper certificate, the seller must obtain and maintain the same information required had a certificate been provided by the purchaser.

(2)        For a sale made in person, the item sold is the type of item typically sold by the type of business stated on the certificate.

(3)        For a sale made over the Internet or by other remote means, the seller obtains the purchaser's name, address, certificate of registration number, reason for exemption, and type of business and maintains this information in a retrievable format in its records. If a certificate of exemption is provided electronically for a remote sale, the requirements of subdivision (1) of this subsection apply except the electronic certificate is not required to be signed by the purchaser.

(4)        In the case of drop shipment sales, a third‑party vendor obtains a certificate of exemption provided by its customer or any other acceptable information evidencing qualification for a resale exemption, regardless of whether the customer is registered to collect and remit sales and use tax in the State.

(b)        Substantiation Request. – If the Secretary determines that a certificate of exemption or the required data elements obtained by the seller are incomplete, the Secretary may request substantiation from the seller. A seller is not required to verify that a certificate of registration number provided by a purchaser is correct. If a seller does one of the following within 120 days after a request for substantiation by the Secretary, the seller is not liable for the tax otherwise applicable:

(1)        Obtains a fully completed certificate of exemption from the purchaser provided in good faith. The certificate is provided in good faith if it claims an exemption that meets all of the following conditions:

a.         It was statutorily available in this State on the date of the transaction.

b.         It could be applicable to the item being purchased.

c.         It is reasonable for the purchaser's type of business.

(2)        Obtains other information to establish the transaction was not subject to tax.

(c)        Fraud. – The relief from liability under this section does not apply to a seller who does any of the following:

(1)        Fraudulently fails to collect tax.

(2)        Solicits purchasers to participate in the unlawful claim of an exemption.

(3)        Accepts an exemption certificate when the purchaser claims an entity‑based exemption when the subject of the transaction sought to be covered by the exemption certificate is received by the purchaser at a location operated by the seller, and the claimed exemption is not available in this State.

(4)        Had knowledge or had reason to know at the time information was provided relating to the exemption claimed that the information was materially false.

(5)        Knowingly participated in activity intended to purposefully evade tax properly due on the transaction.

(d)        Purchaser's Liability. – A purchaser who does not resell an item purchased under a certificate of exemption is liable for any tax subsequently determined to be due on the sale.

(e)        Renewal of Information. – The Secretary may not require a seller to renew a blanket certificate or to update exemption certificate information or data elements when there is a recurring business relationship between the buyer and seller. For purposes of this section, a recurring business relationship exists when a period of no more than 12 months elapses between sales transactions."

SECTION 43.(b)  G.S. 105‑164.28A reads as rewritten:

"§ 105‑164.28A.  Other exemption certificates.

(a)        Authorization. – The Secretary may require a person who purchases an item that is exempt from tax or is subject to a preferential rate of tax depending on the status of the purchaser or the intended use of the item to obtain an exemption certificate from the Department to receive the exemption or preferential rate. An exemption certificate authorizes a retailer to sell an item to the holder of the certificate and either collect tax at a preferential rate or not collect tax on the sale, as appropriate. A person who purchases an item under an exemption certificate is liable for any tax due on the sale if the Department determines that the person is not eligible for the certificate or the item was not used as intended.certificate. The liability is relieved when the seller obtains the purchaser's name, address, type of business, reason for exemption, and exemption number in lieu of obtaining an exemption certificate.

(b)        Scope. – This section does not apply to a direct pay permit or a certificate of resale. G.S. 105‑164.27A addresses a direct pay permit, and G.S. 105‑164.28 addresses a certificate of resale.

(c)        Administration. – This section shall be administered in accordance with G.S. 105‑164.28."

SECTION 44.  G.S. 105‑164.42I(b) reads as rewritten:

"(b)      Contract. – The Secretary may contract contract or authorize in writing the Streamlined Sales Tax Governing Board to contract on behalf of the Secretary with a certified service provider for the collection and remittance of sales and use taxes. A certified service provider must file with the Secretary or the Streamlined Sales Tax Governing Board a bond or an irrevocable letter of credit in the amount set by the Secretary. A bond or irrevocable letter of credit must be conditioned upon compliance with the contract, be payable to the State, State or the Streamlined Sales Tax Governing Board, and be in the form required by the Secretary. The amount a certified service provider charges under the contract is a cost of collecting the tax and is payable from the amount collected."

SECTION 45.  G.S. 105‑164.44I(a) reads as rewritten:

"(a)       Distribution. – The Secretary must distribute to the counties and cities part of the taxes imposed by G.S. 105‑164.4(a)(4c) on telecommunications service and G.S. 105‑164.4(a)(6) on video programming service. The Secretary must make the distribution within 75 days after the end of each calendar quarter. The amount the Secretary must distribute is the sum of the revenue listed in this subsection. The From this amount, the Secretary must distribute two million dollars ($2,000,000) of this amount in accordance with first make the distribution required by subsection (b) of this section and then distribute the remainder in accordance with subsections (c) and (d) of this section. The revenue to be distributed under this section consists of the following:

(1)        The amount specified in G.S. 105‑164.44F(a)(2).

(2)        Twenty three and six tenths percent (23.6%) of the net proceeds of the taxes collected during the quarter on video programming, other than on direct‑to‑home satellite service.

(3)        Thirty‑seven and one tenths percent (37.1%) of the net proceeds of the taxes collected during the quarter on direct‑to‑home satellite service."

SECTION 46.  G.S. 105‑187.51B reads as rewritten:

"§ 105‑187.51B.  Tax imposed on certain recyclers, research and development companies, industrial machinery refurbishing companies, and companies located at ports facilities.

(a)        Tax. – A privilege tax is imposed on the following:

(1)        A major recycling facility that purchases any of the following tangible personal property for use in connection with the facility:

a.         Cranes, structural steel crane support systems, and foundations related to the cranes and support systems.

b.         Port and dock facilities.

c.         Rail equipment.

d.         Material handling equipment.

(2)        A company primarily engaged at the establishment in research and development company activities in the physical, engineering, and life sciences that is included in industry 54171 of NAICS and that purchases equipment or an attachment or repair part for equipment that meets all of the following requirements:

a.         Is capitalized by the company for tax purposes under the Code.

b.         Is used by the company at the establishment in the research and development of tangible personal property.

c.         Would be considered mill machinery or mill machinery parts or accessories under G.S. 105‑187.51 if it were purchased by a manufacturing industry or plant and used in the research and development of tangible personal property manufactured by the industry or plant.

(3)        A company primarily engaged at the establishment in software publishing company activities that is included in the industry group 5112 of NAICS and that purchases equipment or an attachment or repair part for equipment that meets all of the following requirements:

a.         Is capitalized by the company for tax purposes under the Code.

b.         Is used by the company at the establishment in the research and development of tangible personal property.

c.         Would be considered mill machinery under G.S. 105‑187.51 if it were purchased by a manufacturing industry or plant and used in the research and development of tangible personal property manufactured by the industry or plant.

(4)        An A company primarily engaged at the establishment in industrial machinery refurbishing company activities that is included in industry group 811310 of NAICS and that purchases equipment or an attachment or repair part for equipment that meets all of the following requirements:

a.         Is capitalized by the company for tax purposes under the Code.

b.         Is used by the company at the establishment in repairing or refurbishing tangible personal property.

c.         Would be considered mill machinery under G.S. 105‑187.51 if it were purchased by a manufacturing industry or plant and used by the industry or plant to manufacture tangible personal property.

(5)        A company located at a ports facility for waterborne commerce that purchases specialized equipment to be used at the facility to unload or process bulk cargo to make it suitable for delivery to and use by manufacturing facilities.

(b)        Rate. – The tax is one percent (1%) of the sales price of the equipment or other tangible personal property. The maximum tax is eighty dollars ($80.00) per article."

SECTION 47.(a)  G.S. 105‑241.6(b) reads as rewritten:

"(b)      Exceptions. – The exceptions to the general statute of limitations for obtaining a refund of an overpayment are as follows:

(1)        Federal Determination. – If a taxpayer files a return reflecting a federal determination and the return is filed within the time required by this Subchapter, the period for requesting a refund is one year after the return reflecting the federal determination is filed or three years after the original return was filed or due to be filed, whichever is later.

(2)        Waiver. – A taxpayer's waiver of the statute of limitations for making a proposed assessment extends the period in which the taxpayer can obtain a refund to the end of the period extended by the waiver.

(3)        Worthless Debts or Securities. – Section 6511(d)(1) of the Code applies to an overpayment of the tax levied in Part 2 or 3 of Article 4 of this Chapter to the extent the overpayment is attributable to either of the following:

a.         The deductibility by the taxpayer under section 166 of the Code of a debt that becomes worthless, or under section 165(g) of the Code of a loss from a security that becomes worthless.

b.         The effect of the deductibility of a debt or loss described in subpart a. of this subdivision on the application of a carryover to the taxpayer.

(4)        Capital Loss and Net Operating Loss Carrybacks. – Section 6511(d)(2) of the Code applies to an overpayment of the tax levied in Part 2 or 3 of Article 4 of this Chapter to the extent the overpayment is attributable to a capital loss carryback under section 1212(c) of the Code or to a net operating loss carryback under section 172 of the Code.

(5)        Contingent Event. – If a taxpayer is subject to a contingent event and files notice with the Secretary, the period to request a refund of an overpayment is six months after the contingent event concludes.

a.         For purposes of this subdivision, "contingent event" means litigation or a State tax audit initiated prior to the expiration of the statute of limitations under subsection (a) of this section, the pendency of which prevents the taxpayer from possessing the information necessary to file an accurate and definite request for a refund of an overpayment under this Chapter.

b.         For purposes of this subdivision, "notice to the Secretary" means written notice filed with the Secretary prior to expiration of the statute of limitations under subsection (a) of this section for a return or payment in which a contingent event prevents a taxpayer from filing a definite request for a refund of an overpayment. The notice must identify and describe the contingent event, identify the type of tax, list the return or payment affected by the contingent event, and state in clear terms the basis for and an estimated amount of the overpayment.

c.         A taxpayer who contends that an event or condition other than litigation or a State tax audit has occurred that prevents the taxpayer from filing an accurate and definite request for a refund of an overpayment within the period under subsection (a) may submit a written request to the Secretary seeking an extension of the statute of limitations allowed under this subdivision. The request must establish by clear, convincing proof that the event or condition is beyond the taxpayer's control and that it prevents the taxpayer's timely filing of an accurate and definite request for a refund of an overpayment. The request must be filed within the period under subsection (a) of this section. The Secretary's decision on the request is final and is not subject to administrative or judicial review."

SECTION 47.(b)  This section becomes effective January 1, 2014, and applies to a request for a refund of an overpayment of tax filed on or after that date.

SECTION 48.  G.S. 105‑262.1(d) reads as rewritten:

"(d)      Adoption. – The Secretary may adopt a rule under this section by using the procedure for adoption of a temporary rule set forth in G.S. 150B‑21.1(a3). The Secretary must provide electronic notification of the adoption of a rule to persons on the mailing list maintained in accordance with G.S. 150B‑21.2(d) and any other interested parties, including those originally given notice of the rule making and those who provided comment on the rule. If the Secretary receives written comment objecting to the rule and requesting review by the Commission, the rule must be reviewed in accordance with subsections (e) through (i) of this section. A person may object to the rule and request review by the Commission at any point prior to the adoption following the agency's adoption of the rule and by 5:00 P.M. on the third business day following electronic notification from the Secretary of the adoption of a rule. If the Secretary receives no written comment objecting to the rule and requesting review by the Commission, the Secretary must deliver the rule to the Codifier of Rules. The Codifier of Rules must enter the rule into the North Carolina Administrative Code upon receipt of the rule."

SECTION 49.(a)  G.S. 105‑468 reads as rewritten:

"§ 105‑468.  Scope of use tax.

The use tax authorized by this Article is a tax at the rate of one percent (1%) of the cost price of each item or article of tangible personal property that is not sold in the taxing county but is used, consumed, or stored for use or consumption in the taxing county. The tax applies to the same items that are subject to tax under G.S. 105‑467. The collection and administration of this tax shall be in accordance with Article 5 of Chapter 105 of the General Statutes.

Every retailer who is engaged in business in this State and in the taxing county and is required to collect the use tax levied by G.S. 105‑164.6 shall collect the one percent (1%) use tax when the property is to be used, consumed, or stored in the taxing county. The use tax contemplated by this section shall be levied against the purchaser, and the purchaser's liability for the use tax shall be extinguished only upon payment of the use tax to the retailer, where the retailer is required to collect the tax, or to the Secretary, where the retailer is not required to collect the tax.

Where a local sales or use tax was due and has been paid with respect to tangible personal property by the purchaser in another taxing county within the State, or where a local sales or use tax was due and has been paid in a taxing jurisdiction outside the State where the purpose of the tax is similar in purpose and intent to the tax which may be imposed pursuant to this Article, the tax paid may be credited against the tax imposed under this section by a taxing county upon the same property. If the amount of sales or use tax so paid is less than the amount of the use tax due the taxing county under this section, the purchaser shall pay to the Secretary an amount equal to the difference between the amount so paid in the other taxing county or jurisdiction and the amount due in the taxing county. The Secretary may require such proof of payment in another taxing county or jurisdiction as is deemed to be necessary. The use tax levied under this Article is not subject to credit for payment of any State sales or use tax not imposed for the benefit and use of counties and municipalities. No credit shall be given under this section for sales or use taxes paid in a taxing jurisdiction outside this State if that taxing jurisdiction does not grant similar credit for sales taxes paid under this Article."

SECTION 49.(b)  G.S. 105‑467(c) reads as rewritten:

"(c)       Sourcing. – The local sales tax authorized to be imposed and levied under this Article applies to taxable transactions by retailers whose place of business is located within the taxing county. The sourcing principles in G.S. 105‑164.4B apply in determining whether the local sales tax applies to a transaction."

SECTION 50.  G.S. 105‑561(d) reads as rewritten:

"(d)      Special Tax District. – If a regional transportation authority created under Article 27 of Chapter 160A of the General Statutes or a regional public transportation authority created under Article 26 of Chapter 160A of the General Statutes has not levied the tax under this section or has levied the tax at a rate of less than eight dollars ($8.00), it may create a special district that consists of the entire area of one or more counties within its territorial jurisdiction and may levy on behalf of the special district the tax authorized in this section. The rate of tax levied within the special district may not, when combined with the rate levied within the entire territorial jurisdiction of the authority; exceed eight dollars ($8.00). The regional transportation authority may not levy or increase a tax within the special district unless the board of commissioners of each county in the special district has adopted a resolution approving the levy or increase.

A special district created pursuant to this subsection is a body corporate and politic and has the power to carry out the purposes of this subsection. The board of trustees of the regional transportation authority created under Article 27 of Chapter 160A of the General Statutes or a regional public transportation authority created under Article 26 of Chapter 160A of the General Statutes shall serve, ex officio, as the governing body of a special district it creates pursuant to this subsection. The proceeds of a tax levied under this subsection may be used only for the benefit of the special district and only for the purposes provided in G.S. 105‑564. Except as provided in this subsection, a tax levied under this subsection is governed by the provisions of this Article."

SECTION 51.  Section 27A.2(f) of S.L. 2009‑451 reads as rewritten:

"SECTION 27A.2.(f) Subsections (a) and (e) of this section are effective when they become law. The remainder of this section becomes effective October 1, 2009. Subsection (b) applies to sales made on or after October 1, 2009, and subsections (c) and (d) apply to distributions for months beginning on or after October 1, 2009. Subsections (b) through (d) of this section expire July 1, 2011. The general State rate of tax in effect on or after July 1, 2011, applies to gross receipts received on or after July 1, 2011, pursuant to a lease or rental agreement entered into during the period September 1, 2009, through June 30, 2011, for a definite, stipulated period of time. This section does not affect the rights or liabilities of the State, a taxpayer, or another person arising under a statute amended or repealed by this section before the effective date of its amendment or repeal; nor does it affect the right to any refund or credit of a tax that accrued under the amended or repealed statute before the effective date of its amendment or repeal."

SECTION 52.  Section 8 of S.L. 2011‑122 reads as rewritten:

"SECTION 8. Notwithstanding G.S. 62A‑60(c), as enacted by Section 5 of this act, the Department of Revenue may retain the cost of collection not to exceed seven hundred thousand dollars ($700,000) of the 911 service charges for prepaid wireless telecommunications service remitted to it from collections by sellers of the charge for the first 12 calendar months beginning on or after July 1, 2013. The cost of collection that the Department may retain under this section includes costs incurred prior to July 1, 2013."

SECTION 53.(a)  The Department of Revenue allocates and distributes to cities and counties the local sales and use taxes under Subchapter VIII of Chapter 105 of the General Statutes and a portion of various State taxes under Chapter 105 of the General Statutes, such as the excise tax on beer and wine, the franchise tax on electric power companies, the sales tax on video programming and telecommunications, and the excise tax on piped natural gas. If the Department is unable to accurately identify and calculate the amount of tax proceeds allocable and distributable to a county or city for any one or more of these taxes for one or more of the distributional periods because of implementation issues with the Tax Information Management System (TIMS), the Department must allocate and distribute to a county and city an amount for that period that is equal to the average of the applicable tax proceeds allocated and distributed to it for the same distributional period in the preceding three fiscal years.

SECTION 53.(b)  This section is effective when it becomes law and expires on July 1, 2015.

 

occupancy tax technical changes

SECTION 60.(a)  Section 17 of Chapter 908 of the 1983 Session Laws, as amended by Section 1 of S.L. 2001‑162, reads as rewritten:

"Sec. 17. Authorization and Scope. (a)  The Board of Commissioners of Buncombe County may levy a room occupancy and tourism development tax of up to two percent (2%) of the gross receipts derived from the rental of  accommodations within the county that are subject to sales tax imposed by the State under G.S. 105‑164.4(a)(3). This tax does not apply to gross receipts derived by the following entities from accommodations furnished by them:

(1)        religious organizations;

(2)        educational  organizations;

(3)        any business that offers to rent fewer than five units; and

(4)        summer camps."

SECTION 60.(b)  Section 25 of Chapter 908 of the 1983 Session Laws, as amended by Section 1 of S.L. 2009‑157, reads as rewritten:

"Sec. 25. Occupancy Tax. – Authorization and Scope. – The Board of Commissioners of Forsyth County may levy a room occupancy and tourism development tax of two percent (2%) of the gross receipts derived from the rental of any room, lodging, or similar accommodation furnished by any hotel, motel, inn, tourist camp, or other similar place within the county that is subject to sales tax imposed by the State under G.S. 105‑164.4(a)(3). This tax is in addition to any State or local sales tax. This tax does not apply to accommodations furnished by any of the following:

(1)        Religious organizations.

(2)        Educational organizations.

(3)        Any business that offers to rent fewer than five units.

(4)        Summer camps."

SECTION 60.(c)  Section 3 of Chapter 980 of the 1983 Session Laws, as amended by Section 2 of S.L. 1995‑721, is repealed.

SECTION 60.(d)  Section 3 of Chapter 988 of the 1983 Session Laws is repealed.

SECTION 60.(e)  Section 3 of Chapter 857 of the 1985 Session Laws is repealed.

SECTION 60.(f)  Section 2 of S.L. 2007‑112, as amended by Section 40 of S.L. 2007‑484, reads as rewritten:

"SECTION 2. Occupancy Tax. – (a) Authorization and Scope. – The Carteret County Board of Commissioners may levy a room occupancy and tourism development tax of five percent (5%) of the gross receipts derived from the rental of any room, lodging, or similar accommodation furnished by any hotel, motel, inn, tourist camp, condominium, cottage, campground, rental agency, or other similar place within the county that is subject to sales tax imposed by the State under G.S. 105‑164.4(a)(3). This tax is in addition to any State or local sales tax. This tax does not apply to accommodations furnished by the following:

(1)        Religious organizations.

(2)        Educational organizations.

(3)        Any business that offers to rent fewer than five units.

(4)        Summer camps.

(5)        Charitable, benevolent, and other nonprofit organizations."

SECTION 60.(g)  Section 1 of Chapter 80 of the 1991 Session Laws, as amended by Section 1 of S.L. 2006‑127, reads as rewritten:

"Section 1. Occupancy Tax. – (a)  Authorization and Scope. – The Martin County Board of Commissioners may levy a room occupancy tax of up to three percent (3%) of the gross receipts derived from the rental of any room, lodging, or similar accommodation furnished by a hotel, motel, inn, tourist camp, or similar place within the county that is subject to sales tax imposed by the State under G.S. 105‑164.4(a)(3). This tax is in addition to any State or local sales tax. This tax does not apply to accommodations furnished by nonprofit charitable, educational, or religious organizations, when furnished in furtherance of their nonprofit purpose, by summer camps, or by businesses that offer to rent no more than five units.

…."

SECTION 60.(h)  Section 1 of Chapter 102 of the 1997 Session Laws, as amended by Section 1 of S.L. 2005‑118, reads as rewritten:

"Section 1. (b) Authorization and scope. The Madison County Board of Commissioners may levy a room occupancy tax of up to three percent (3%) of the gross receipts derived from the rental of any room, lodging, or accommodation furnished by a hotel, motel, inn, tourist camp, or similar place within the county that is subject to sales tax imposed by the State under G.S. 105‑164.4(a)(3). This tax is in addition to any State or local sales tax. This tax does not apply to accommodations furnished by nonprofit charitable, educational, or religious organizations or to a business that offers to rent fewer than five units.

…."

SECTION 60.(i)  Section 1 of Chapter 821 of the 1991 Session Laws, as amended by S.L. 2001‑305, reads as rewritten:

"Section 1. Occupancy tax. (a)  Authorization and scope. The Washington County Board of Commissioners may  levy a room occupancy tax of three percent (3%) of the gross receipts derived from the rental of any room, lodging, or accommodation furnished by a hotel, motel, inn, tourist camp, or similar place within the county that is subject to sales tax imposed by the State under G.S. 105‑164.4(a)(3). This tax is in addition to any State or local sales tax. This tax does not apply to accommodations furnished by:

(1)        Nonprofit charitable, educational, or religious organizations.

(2)        A business that offers to rent fewer than five units.

(3)        Summer camps.

…."

SECTION 60.(j)  Section 1 of Chapter 969 of the 1987 Session Laws, as amended by Section 13.1 of S.L. 2001‑439, reads as rewritten:

"Section 1. Levy of Tax. – (a) The Board of Commissioners of Richmond County may by resolution levy a room occupancy and tourism development tax of three percent (3%) of the gross receipts derived from the rental of any room, lodging, or similar accommodation furnished by any hotel, motel, inn, tourist camp or other similar place within the county now subject to the three percent (3%) sales tax imposed by the State under G.S. 105‑164.4(a)(3). This tax is in addition to any local sales tax. This tax does not apply to gross receipts derived by the following entities from accommodations furnished by them:

(1)        Religious organizations;

(2)        Educational organizations;

(3)        Any business that offers to rent fewer than five units; and

(4)        Summer camps.

…."

SECTION 60.(k)  Section 1 of Chapter 158 of the 1991 Session Laws, as amended by Section 1 of S.L. 2001‑365, reads as rewritten:

"Section 1. Occupancy Tax.

(a)        Authorization and scope. – The Washington City Council may levy a room occupancy tax of three percent (3%) of the gross receipts derived from the rental of any room, lodging, or similar accommodation furnished by a hotel, motel, inn, tourist camp, or similar place within the city that is subject to sales tax imposed by the State under G.S. 105‑164.4(a)(3). This tax is in addition to any State or local sales tax. This tax does not apply to accommodations furnished by nonprofit charitable, educational, or religious organizations, by summer camps, or by businesses that offer to rent no more than five units.

.…"

SECTION 60.(l)  Section 4 of Chapter 605 of the 1991 Session Laws is repealed.

SECTION 60.(m)  Section 1 of Chapter 561 of the 1987 Session Laws reads as rewritten:

"Section 1. Occupancy Tax. (a)  Authorization and scope. The Lenoir County Board of Commissioners may by resolution, after not less than ten days' public notice and after a public hearing held pursuant thereto, levy a room occupancy tax of three percent (3%) of the gross receipts derived from the rental of any room, lodging, or similar accommodation furnished by a hotel, motel, inn, tourist camp, or similar place within the county that is subject to sales tax imposed by the State under G.S. 105‑164.4(3). This tax is in addition to any State or local sales tax. This tax does not apply to accommodations furnished by nonprofit charitable, educational, or religious organizations, by summer camps, or by businesses that offer to rent no more than five units.

…."

SECTION 60.(n)  Section 3 of Chapter 647 of the 1987 Session Laws is repealed.

SECTION 60.(o)  Section 1 of Chapter 950 of the 1987 Session Laws reads as rewritten:

"Section 1. Occupancy tax. (a) Authorization and scope. The Alamance County Board of Commissioners may by resolution, after not less than 10 days' public notice and after a public hearing held pursuant thereto, levy a room occupancy tax of three percent (3%) of the gross receipts derived from the rental of any room, lodging, or similar accommodation furnished by a hotel, motel, inn, or similar place within the county that is subject to sales tax imposed by the State under G.S. 105‑164.4(3). This tax is in addition to any State or local sales tax. This tax does not apply to gross receipts derived by the following entities from accommodations furnished by them:

(1)        Nonprofit charitable organizations;

(2)        religious organizations;

(3)        educational organizations; and

(4)        any business that offers to rent fewer than five units.

…."

SECTION 60.(p)  Section 3 of Chapter 22 of the 1991 Session Laws is repealed.

SECTION 60.(q)  Section 1 of Chapter 162 of the 1991 Session Laws, as amended by Section 1 of S.L. 2004‑106 and Section 1 of S.L. 2011‑170, reads as rewritten:

"Section 1. Occupancy tax. (a)  Authorization and Scope. – The Alleghany County Board of Commissioners may levy a room occupancy tax of three percent (3%) of the gross receipts derived from the rental of any room, lodging, or accommodation furnished by a hotel, motel, inn, tourist camp, or similar place within the county that is subject to sales tax imposed by the State under G.S. 105‑164.4(a)(3). This tax is in addition to any State or local sales tax. This tax does not apply to accommodations furnished by a summer camp for minors, or by a nonprofit charitable, educational, or religious organization.

…."

SECTION 60.(r)  Section 1 of Chapter 648 of the 1993 Session Laws reads as rewritten:

"Section 1. Occupancy Tax. (a) Authorization and scope. The Kinston City Council may by resolution, after not less than 10 days' public notice and after a public hearing held pursuant thereto, levy a room occupancy tax of three percent (3%) of the gross receipts derived from the rental of any room, lodging, or similar accommodation furnished by a hotel, motel, inn, tourist camp, or similar place within the city that is subject to sales tax imposed by the State under G.S. 105‑164.4(a)(3). This tax is in addition to any State or local sales tax. This tax does not apply to accommodations furnished by nonprofit charitable, educational, or religious organizations, by summer camps, or by businesses that offer to rent no more than five units.

.…"

SECTION 60.(s)  Section 1 of Chapter 209 of the 1987 Session Laws, as amended by Chapter 155 of the 1991 Session Laws, S.L. 1999‑155 and S.L. 2004‑95, reads as rewritten:

"Section 1. Occupancy tax. (a) Authorization and scope. The Currituck County Board of Commissioners may levy a room occupancy tax of three percent (3%) of the gross receipts derived from the rental of any room, lodging, or similar accommodation furnished by a hotel, motel, inn, or similar place within the county that is subject to sales tax imposed by the State under G.S. 105‑164.4(a)(3), or from the rental of a campsite within the county.G.S. 105‑164.4(a)(3). This tax is in addition to any State or local sales tax. This tax does not apply to accommodations furnished by nonprofit charitable, educational, or religious organizations when furnished in furtherance of their nonprofit purpose.

…."

SECTION 60.(t)  Section 1(a) of Chapter 449 of the 1985 Session Laws, as amended by Chapter 826 of the 1985 Session Laws, Chapters 177 and 906 of the 1991 Session Laws, and Part VII of S.L. 2001‑439, reads as rewritten:

"Section 1. Occupancy Tax. (a) Authorization and Scope. The Dare County Board of Commissioners may levy a room occupancy tax of three percent (3%) of the gross receipts derived from the rental of the following in Dare County:

(1)        Any any room, lodging, or similar accommodation within the county that is subject to sales tax under G.S. 105‑164.4(a)(3); and

(2)        A campsite.G.S. 105‑164.4(a)(3).

This tax does not apply to accommodations furnished by nonprofit charitable, educational, or religious organizations when furnished in furtherance of their nonprofit purpose. This tax is in addition to any State or local sales tax."

 

tax & tag together motor vehicle property tax changes

SECTION 70.(a)  Section 22(d) of S.L. 2007‑527, as amended by Section 66 of S.L. 2008‑134 and Section 22(b) of S.L. 2010‑95, reads as rewritten:

"SECTION 22.(d) Subsection (c) of this section becomes effective July 1, 2013, or when the Division of Motor Vehicles of the Department of Transportation and the Department of Revenue certify that the integrated computer system for registration renewal and property tax collection for motor vehicles is in operation, whichever occurs first. July 1, 2013. The remainder of this section is effective when it becomes law."

SECTION 70.(b)  Section 24(c) of S.L. 2009‑445, as amended by Section 22(c) of S.L. 2010‑95, reads as rewritten:

"SECTION 24.(c) G.S. 105‑330.9 and G.S. 105‑330.11, as amended in subsection (a) of this section, are effective when this act becomes law. Subsection (b) of this section and the remainder of subsection (a) of this section become effective July 1, 2013, and apply to combined tax and registration notices issued on or after that date, or when the Division of Motor Vehicles and the Department of Revenue certify that the integrated computer system or registration renewal and property tax collection for motor vehicles is in operation, whichever occurs first. date. Counties may continue to collect property taxes on motor vehicles for taxable years beginning on or before September 1, 2013, under the provisions of Article 22A of Chapter 105 of the General Statutes as those statutes are in effect on June 30, 2013. The remainder of this section is effective when it becomes law."

SECTION 70.(c)  Section 8 of S.L. 2007‑471, as amended by Section 25(a) of S.L. 2009‑445, and Section 22(d) of 2010‑95, reads as rewritten:

"SECTION 8. Unless otherwise stated, this act becomes effective July 1, 2013, and applies to combined tax and registration notices issued on or after that date, or when the Division of Motor Vehicles and the Department of Revenue certify that the integrated computer system for registration renewal and property tax collection for motor vehicles is in operation, whichever occurs first.date. Counties may continue to collect property taxes on motor vehicles for taxable years beginning on or before September 1, 2013, under the provisions of Article 22A of Chapter 105 of the General Statutes as those statutes are in effect on June 30, 2013."

SECTION 70.(d)  Section 13 of S.L. 2005‑294, as amended by Section 31.5 of S.L. 2006‑259, and Section 22(b) of S.L. 2007‑257, and Section 65 of S.L. 2008‑134, and Section 3.6 of S.L. 2012‑79, reads as rewritten:

"SECTION 13. Sections 4 and 8 of this act become effective January 1, 2006. Sections 1, 2, 3, 5, 6, 7, 10 and 11 of this act become effective July 1, 2013, or when the Division of Motor Vehicles of the Department of Transportation and the Department of Revenue certify that the integrated computer system for registration renewal and property tax collection for motor vehicles is in operation, whichever occurs first. and apply to combined tax and registration notices issued on or after that date. Counties may continue to collect property taxes on motor vehicles for taxable years beginning on or before September 1, 2013, under the provisions of Article 22A of Chapter 105 of the General Statutes as those statutes are in effect on June 30, 2013. Sections 12 and 13 of this act are effective when they become law. Nothing in this act shall require the General Assembly to appropriate funds to implement it for the biennium ending June 30, 2007."

SECTION 70.(e)  This section is effective when it becomes law.

SECTION 71.(a)  Effective June 26, 2012, Sections 3.2, 3.3, and 3.4 of S.L. 2012‑79 are repealed.

SECTION 71.(b)  Effective July 1, 2013, G.S. 105‑330.2, as amended by Section 2 of S.L. 2005‑294 and Section 24(a) of S.L. 2009‑445, reads as rewritten:

"§ 105‑330.2.  Appraisal, ownership, and situs.

…

(b1)      Valuation Appeal. – The owner of a classified motor vehicle may appeal the appraised value or taxability of the vehicle by filing a request for appeal with the assessor within 30 days of the date taxes are due on the vehicle under G.S. 105‑330.4. An owner who appeals the appraised value or taxability of a classified motor vehicle must pay the tax on the vehicle when due, subject to a full or partial refund if the appeal is decided in the owner's favor.

The combined tax and registration notice or tax receipt for a classified motor vehicle must explain the right to appeal the appraised value and taxability of the vehicle. A lessee of a vehicle that is required by the terms of the lease to pay the tax on the vehicle is considered the owner of the vehicle for purposes of filing an appeal under this subsection. Appeals filed under this subsection shall proceed in the manner provided in G.S. 105‑312(d).

(b2)      Exemption or Exclusion Appeal. – The owner of a classified motor vehicle may appeal the vehicle's eligibility for an exemption or exclusion by filing a request for appeal with the assessor within 30 days of the assessor's initial decision on the exemption or exclusion application filed by the owner pursuant to G.S. 105‑330.3(b). Appeals filed under this subsection shall proceed in the manner provided in G.S. 105‑312(d).

…."

SECTION 71.(c)  Effective July 1, 2013, G.S. 105‑330.3, as amended by Section 24(a) of S.L. 2009‑445, reads as rewritten:

"§ 105‑330.3.  Listing requirements for classified motor vehicles; application for exempt status.

…

(a1)      Unregistered Vehicles. – The owner of an unregistered classified motor vehicle must list the vehicle for taxes by filing an abstract with the assessor of the county in which the vehicle is located on or before January 31 following the date the owner acquired the unregistered vehicle or, in the case of a registration that is not renewed, January 31 following the date the registration expires, and on or before January 31 of each succeeding year that the vehicle is unregistered. If a classified motor vehicle required to be listed pursuant to this subsection is registered during the calendarbefore the end of the fiscal year in for which it was listed, the vehicle is taxed for the fiscal year that opens in the calendar year of listing as an unregistered vehicle.required to be listed, the following applies:

(1)        The vehicle is taxed as a registered vehicle, and the tax assessed pursuant to this subsection for the fiscal year in which the vehicle was required to be listed shall be released and/or refunded.

(2)        For any months for which the vehicle was not taxed between the date the registration expired and the start of the current registered vehicle tax year, the vehicle is taxed as an unregistered vehicle as follows:

a.         The value of the motor vehicle is determined as of January 1 of the year in which the registration of the motor vehicle expires.

b.         In computing the taxes, the assessor must use the tax rates and any additional motor vehicle taxes of the various taxing units in effect on the date the taxes are computed.

c.         The tax on the motor vehicle is the product of a fraction and the number of months for which the vehicle was not taxed between the date the registration expires and the start of the current registered vehicle tax year. The numerator of the fraction is the product of the appraised value of the motor vehicle and the tax rate of the various taxing units. The denominator of the fraction is 12.

d.         The taxes are due on the first day of the second month following the month the notice was prepared.

e.         Interest accrues on unpaid taxes for these unregistered classified motor vehicles at the rate of five percent (5%) for the remainder of the month following the month the taxes are due. Interest accrues at the rate of three‑fourths percent (3/4%) for each following month until the taxes are paid, unless the notice is prepared after the date the taxes are due. In that circumstance, the interest accrues beginning the second month following the date of the notice until the taxes are paid.

(3)        A vehicle required to be listed pursuant to this subsection that is not listed by January 31 and is not registered before the end of the fiscal year for which it was required to be listed is subject to discovery pursuant to G.S. 105‑312, unless the vehicle has been taxed as a registered vehicle for the current year.G.S. 105‑312.

(b)        Exemption or Exclusion. – The owner of a classified motor vehicle who claims an exemption or exclusion from tax under this Subchapter has the burden of establishing that the vehicle is entitled to the exemption or exclusion. The owner may establish prima facie entitlement to exemption or exclusion of the classified motor vehicle by filing an application for exempt status with the assessor.assessor within 30 days of the date taxes on the vehicle are due. When an approved application is on file, the assessor must omit from the tax records the classified motor vehicles described in the application. An application is not required for vehicles qualifying for the exemptions or exclusions listed in G.S. 105‑282.1(a)(1). The remaining provisions of G.S. 105‑282.1 do not apply to classified motor vehicles.

…."

SECTION 71.(d)  Effective July 1, 2013, G.S. 105‑330.4, as amended by Sections 4 and 5 of S.L. 2005‑294, and Section 24(a) of S.L. 2009‑445, reads as rewritten:

"§ 105‑330.4.  Due date, interest, and enforcement remedies.

(a)        Due Date. – The registration of a classified motor vehicle may not be issued or renewed unless the taxes for the tax year that begins on the first day of the first month following registration that are due have been paid. If the registration of a classified motor vehicle is renewed earlier than the date the taxes are due, the taxes must be paid as if they are due. Taxes on a classified motor vehicle are due as follows:

(1)        For an unregistered classified motor vehicle, the taxes are due on September 1 following the date by which the vehicle was required to be listed.

(2)        For a registered classified motor vehicle that is registered under the staggered system, the taxes are due each year on the date the owner applies for a new registration or the fifteenth day of the month following the month in which the registration renewal sticker expires pursuant to G.S. 20‑66(g).

(3)        For a registered classified motor vehicle that is registered under the annual system, taxes are due on the date the owner applies for a new registration or 45 days after the registration expires.

(4)        For a registered classified motor vehicle that has a temporary registration plate issued under G.S. 20‑79.1 or a limited registration plate issued under G.S. 20‑79.1A, the taxes are due on the last day of the second month following the date the owner applied for the plate.

…

(b)        Interest. – Interest accrues on unpaid taxes and unpaid registration fees for registered classified motor vehicles at the rate of five percent (5%) for the remainder of the month following the month the taxes are due under subsection (a) of this section.date the registration renewal sticker expired pursuant to G.S. 20‑66(g). Interest accrues at the rate of three‑fourths percent (3/4%) beginning the second month following the due date and for each following month until the taxes and fees are paid, unless the notice required by G.S. 105‑330.5 is prepared after the date the taxes and fees are due. In that circumstance, the interest accrues beginning the second month following the date of the notice until the taxes and fees are paid. Subject to the provisions of G.S. 105‑395.1, interest accrues on delinquent taxes on unregistered classified motor vehicles as provided in G.S. 105‑360(a) and the discounts allowed in G.S. 105‑360(a) apply to the payment of the taxes.

(c)        Remedies. – The enforcement remedies in this Subchapter apply to unpaid taxes on an unregistered classified motor vehicle. The enforcement remedies in this Subchapter do not apply to unpaid taxes on a registered classified motor vehicle.vehicle for which the tax year begins on or after October 1, 2013.

(d)        Payments. – Tax payments submitted by mail are deemed to be received as of the date shown on the postmark affixed by the United States Postal Service. If no date is shown on the postmark or if the postmark is not affixed by the United States Postal Service, the tax payment is deemed to be received when the payment is received in the office of the tax collector.by the collecting authority. In any dispute arising under this subsection, the burden of proof is on the taxpayer to show that the payment was timely made."

SECTION 72.  Effective July 1, 2013, G.S. 105‑330.1(b), as amended by Section 24(a) of S.L. 2009‑445, reads as rewritten:

"(b)      Exceptions. – The following motor vehicles are not classified under subsection (a) of this section:

(1)        Motor vehicles exempt from registration pursuant to G.S. 20‑51.

(2)        Manufactured homes, mobile classrooms, and mobile offices.

(3)        Semitrailers or trailers registered on a multiyear basis.

(4)        Motor vehicles owned or leased by a public service company and appraised under G.S. 105‑335.

(5)        Repealed by Session Laws 2000, c. 140, s. 75(a), effective July 1, 2000.

(6)        Motor vehicles registered under the International Registration Plan.

(7)        Motor vehicles issued permanent registration plates under G.S. 20‑84.

(8)        Self‑propelled property‑carrying vehicles issued three‑month registration plates at the farmer rate under G.S. 20‑88.

(9)        Motor vehicles owned by participants in the Address Confidentiality Program authorized under Chapter 15C of the General Statutes."

 

effective date

SECTION 80.  Sections 5, 6, and 7 of this act are effective for taxable years beginning on or after January 1, 2012. Except as otherwise provided, the remainder of this act is effective when it becomes law.