GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2013
S D
SENATE DRS35181-RBx-20 (02/20)
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Short Title: Lower Tax Rates for a Stronger NC Economy. |
(Public) |
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Sponsors: |
Senators Clodfelter (Primary Sponsor); Hartsell, Jenkins, and Meredith. |
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Referred to: |
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A BILL TO BE ENTITLED
AN ACT to adopt a bipartisan tax reform plan to promote economic development in north carolina by establishing a SOUND state tax structure that revises the existing structure on a revenue‑neutral basis, lowers all major tax rates, taxes all income at the same rate, and makes the structure simpler, fairer, and consistent with the modern economy, as recommended by past tax studies.
The General Assembly of North Carolina enacts:
PART I. GENERAL FINDINGS AND PURPOSE
SECTION 1.(a) The General Assembly of North Carolina finds the following:
(1) North Carolina's current tax structure has not been comprehensively revised since the Great Depression. The tax structure adopted then, while amended extensively over the years in a piecemeal fashion, no longer reflects North Carolina's 21st Century economy.
(2) Over the years, the multiplication of credits, allowances, special rates, and exemptions has progressively narrowed the base of the State's individual and corporate income taxes, with the result that the rates for those income taxes are now among the highest in our region and among our peer states.
(3) North Carolina's current tax structure undermines the State's competitive position and acts as a deterrent to new business investment and the creation of new jobs.
(4) The State's reliance on temporary and expedient tax changes to meet budget shortfalls has created a tax structure that is unpredictable for taxpayers and a revenue stream that is unstable for the State.
SECTION 1.(b) It is the intent of this legislation to promote economic development by establishing broader tax bases and lowering tax rates in a comprehensive manner, as recommended by numerous study committees charged with developing a 21st Century tax policy for the State. Adoption of a modern tax structure will accomplish the following objectives:
(1) Make North Carolina's tax system more competitive relative to our peer states.
(2) Conform North Carolina's tax system to the current economy and not that of the 1933 economy.
(3) Stabilize North Carolina's tax base and provide a reliable revenue stream for the future.
(4) Make North Carolina's tax system fairer so that individual taxpayers and business taxpayers who are in very similar circumstances to one another are treated in roughly the same way by the tax system.
(5) Balance North Carolina's tax revenues among the different types of taxes and the different groups of taxpayers on a revenue‑neutral basis. The consensus forecasted amounts for fiscal year 2014‑2015 are used to establish the revenue‑neutrality of the tax changes in this legislation.
SECTION 1.(c) This section is effective when it becomes law.
PART II. REDUCE INDIVIDUAL INCOME TAX rates and broaden tax base
SECTION 2.(a) The following statutes are recodified as indicated:
Current Statute Recodified Statute
G.S. 105‑133 G.S. 105‑153.1
G.S. 105‑134 G.S. 105‑153.2
G.S. 105‑134.1 G.S. 105‑153.3
G.S. 105‑134.5 G.S. 105‑153.4
G.S. 105‑151 G.S. 105‑153.9
G.S. 105‑152 G.S. 105‑153.8
SECTION 2.(b) The following statutes are repealed:
G.S. 105‑134.2
G.S. 105‑134.3
G.S. 105‑134.6
G.S. 105‑134.7
G.S. 105‑134.8
G.S. 105‑151.11
G.S. 105‑151.18
G.S. 105‑151.20
G.S. 105‑151.21
G.S. 105‑151.24
G.S. 105‑151.26
G.S. 105‑151.33
SECTION 2.(c) G.S. 105‑134.1, recodified by this act as G.S. 105‑153.3, reads as rewritten:
"§ 105‑153.3. Definitions.
The following definitions apply in this Part:
(1) Adjusted gross income. – Defined in section 62 of the Code.
(1a) Code. – Defined in G.S. 105‑228.90.
(2) Department. – The Department of Revenue.
(3) Educational institution. – An educational
institution that normally maintains a regular faculty and curriculum and
normally has a regularly organized body of students in attendance at the place
where its educational activities are carried on.
(4) Fiscal year. – Defined in section 441(e) of the Code.
(5) Gross income. – Defined in section 61 of the Code.
(6) Head of household. – Defined in section 2(b) of the Code.
(7) Individual. – A human being.
(7a) Limited liability company. – Either a domestic limited liability company organized under Chapter 57C of the General Statutes or a foreign limited liability company authorized by that Chapter to transact business in this State that is classified for federal income tax purposes as a partnership. As applied to a limited liability company that is a partnership under this Part, the term "partner" means a member of the limited liability company.
(7b) Repealed by Session Laws 1998‑98, s. 9, effective August 14, 1998.
(8) Married individual. – An individual who is married and is considered married as provided in section 7703 of the Code.
(9) Nonresident individual. – An individual who is not a resident of this State.
(10) North Carolina taxable income. – Defined in G.S. 105‑134.5.G.S. 105‑153.4.
(10a) Partnership. – A domestic partnership, a foreign partnership, or a limited liability company.
(11) Person. – Defined in G.S. 105‑228.90.
(12) Resident. – An individual who is domiciled in this State at any time during the taxable year or who resides in this State during the taxable year for other than a temporary or transitory purpose. In the absence of convincing proof to the contrary, an individual who is present within the State for more than 183 days during the taxable year is presumed to be a resident, but the absence of an individual from the state for more than 183 days raises no presumption that the individual is not a resident. A resident who removes from the State during a taxable year is considered a resident until he has both established a definite domicile elsewhere and abandoned any domicile in this State. The fact of marriage does not raise any presumption as to domicile or residence.
(13) Retirement benefits. – Amounts paid to a
former employee or the beneficiary of a former employee under a written
retirement plan established by the employer to provide payments to an employee
or the beneficiary of an employee after the end of the employee's employment
with the employer where the right to receive the payments is based upon the
employment relationship. With respect to a self‑employed individual or
the beneficiary of a self‑employed individual, the term means amounts
paid to the individual or beneficiary of the individual under a written
retirement plan established by the individual to provide payments to the individual
or the beneficiary of the individual after the end of the self‑employment.
In addition, the term includes amounts received from an individual retirement
account described in section 408 of the Code or from an individual retirement
annuity described in section 408 of the Code. For the purpose of this
subdivision, the term "employee" includes a volunteer worker.
(14) S Corporation. – Defined in G.S. 105‑131(b).
(15) Secretary. – The Secretary of Revenue.
(16) Repealed by Session Laws 2011‑145, s. 31A.1(a), effective for taxable years beginning on or after January 1, 2012.
(17) Taxable year. – Defined in section 441(b) of the Code.
(18) Taxpayer. – An individual subject to the tax imposed by this Part.
(19) This State. – The State of North Carolina."
SECTION 2.(d) G.S. 105‑134.5, recodified by this act as G.S. 105‑153.4, reads as rewritten:
"§ 105‑153.4. North Carolina taxable income defined.
(a) Residents. – For an individual who is a resident
of this State, the term "North Carolina taxable income" means the
taxpayer's adjusted gross income as modified in G.S. 105‑134.6.G.S. 105‑153.5.
(b) Nonresidents. – For a nonresident individual, the
term "North Carolina taxable income" means the taxpayer's adjusted
gross income as modified in G.S. 105‑134.6, G.S. 105‑153.5,
multiplied by a fraction the denominator of which is the taxpayer's gross
income as modified in G.S. 105‑134.6, G.S. 105‑153.5,
and the numerator of which is the amount of that gross income, as modified,
that is derived from North Carolina sources and is attributable to the
ownership of any interest in real or tangible personal property in this State,
is derived from a business, trade, profession, or occupation carried on in this
State, or is derived from gambling activities in this State.
(c) Part‑year Residents. – If an individual was
a resident of this State for only part of the taxable year, having moved into
or removed from the State during the year, the term "North Carolina
taxable income" has the same meaning as in subsection (b) of this section
except that the numerator includes adjusted gross income, as modified
under G.S. 105‑134.6, G.S. 105‑153.5, derived
from all sources during the period the individual was a resident.
(d) S Corporations and Partnerships. – In order to calculate the numerator of the fraction provided in subsection (b) of this section, the amount of a shareholder's pro rata share of S Corporation income that is includable in the numerator is the shareholder's pro rata share of the S Corporation's income attributable to the State, as defined in G.S. 105‑131(b)(4). In order to calculate the numerator of the fraction provided in subsection (b) of this section for a member of a partnership or other unincorporated business that has one or more nonresident members and operates in one or more other states, the amount of the member's distributive share of income of the business that is includable in the numerator is determined by multiplying the total net income of the business by the ratio ascertained under the provisions of G.S. 105‑130.4. As used in this subsection, total net income means the entire gross income of the business less all expenses, taxes, interest, and other deductions allowable under the Code that were incurred in the operation of the business.
(e) Tax Year. – A taxpayer must compute North Carolina taxable income on the basis of the taxable year used in computing the taxpayer's income tax liability under the Code."
SECTION 2.(e) Part 2 of Article 4 of Chapter 105 of the General Statutes is amended by adding the following new sections to read:
"§ 105‑153.5. Modifications to adjusted gross income.
(a) Deductions. – In calculating North Carolina taxable income, a taxpayer must deduct from the taxpayer's adjusted gross income any of the following items that are included in the taxpayer's adjusted gross income:
(1) Interest upon the obligations of any of the following:
a. The United States or its possessions.
b. This State, a political subdivision of this State, or a commission, an authority, or another agency of this State or of a political subdivision of this State.
(2) Gain from the disposition of obligations issued before July 1, 1995, to the extent the gain is exempt from tax under the laws of this State.
(3) Amounts received from retirement annuities or pensions paid under the provisions of the Railroad Retirement Act of 1937.
(4) Refunds of State, local, and foreign income taxes included in the taxpayer's gross income.
(5) The amount received during the taxable year from one or more State, local, or federal government retirement plans to the extent the amount is exempt from tax under this Part pursuant to a court order in settlement of any of the following cases:
a. Bailey v. State, 92 CVS 10221, 94 CVS 6904, 95 CVS 6625, 95 CVS 8230.
b. Emory v. State, 98 CVS 0738.
c. Patton v. State, 95 CVS 04346.
(6) Income that meets both of the following requirements:
a. Is earned or received by an enrolled member of a federally recognized Indian tribe.
b. Is derived from activities on a federally recognized Indian reservation while the member resides on the reservation. Income from intangibles having a situs on the reservation and retirement income associated with activities on the reservation are considered income derived from activities on the reservation.
(7) The amount by which the basis of property under this Article exceeds the basis of the property under the Code, in the year the taxpayer disposes of the property.
(8) The amount paid to the taxpayer by the State under G.S. 148‑84 as compensation for pecuniary loss suffered by reason of erroneous conviction and imprisonment.
(9) The amount allowed as a deduction under G.S. 105‑153.6 as a result of an add‑back for federal accelerated depreciation and expensing.
(b) Additions. – In calculating North Carolina taxable income, a taxpayer must add to the taxpayer's adjusted gross income any of the following items that are not included in the taxpayer's adjusted gross income:
(1) Interest upon the obligations of states other than this State, political subdivisions of those states, and agencies of those states and their political subdivisions.
(2) The amount by which a shareholder's share of S Corporation income is reduced under section 1366(f)(2) of the Code for the taxable year by the amount of built‑in gains tax imposed on the S Corporation under section 1374 of the Code.
(3) The amount by which the basis of property under the Code exceeds the basis of the property under this Article, in the year the taxpayer disposes of the property.
(4) The amount excluded from gross income under section 199 of the Code.
(5) The amount required to be added under G.S. 105‑153.6 when the State decouples from federal accelerated depreciation and expensing.
"§ 105‑153.6. Adjustments when State decouples from federal accelerated depreciation and expensing.
(a) Special Accelerated Depreciation. – A taxpayer who places property in service during a taxable year listed in the table below and 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 2013, the taxpayer must add the amount to the taxpayer's federal taxable income. For taxable year 2013 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 Five Taxable Years of
85% Add‑Back 20% Deduction
2010 2011 through 2015
2011 2012 through 2016
2012 2013 through 2017
2013 2014 through 2018
(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 1, 2011. 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 amount that would have been allowed for that taxable year under section 179 of the Code as of May 1, 2010. For taxable years before 2013, the taxpayer must add the amount to the taxpayer's federal taxable income. For taxable year 2013 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 in subsection (a) of this section indicates the applicable five‑year period.
(d) 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.
"§ 105‑153.7. Individual income tax imposed.
(a) Tax. – A tax is imposed for each taxable year on the North Carolina taxable income of an individual. The tax is six percent (6%) of the taxpayer's North Carolina taxable income that exceeds the zero tax bracket for the taxpayer's filing status. For purposes of Section 2 of Article V of the North Carolina Constitution, the zero tax bracket provides an exemption so that only net incomes are taxed.
The zero tax brackets are as follows:
(1) For married individuals who file a joint return under G.S. 105‑153.8 and for surviving spouses, as defined in section 2(a) of the Code:
Over Up To Rate
0 $11,000 0.0%
(2) For heads of households, as defined in section 2(b) of the Code:
Over Up To Rate
0 $8,800 0.0%
(3) For unmarried individuals other than surviving spouses and heads of households:
Over Up To Rate
0 $5,500 0.0%
(4) For married individuals who do not file a joint return under G.S. 105‑153.7:
Over Up To Rate
0 $5,500 0.0%
(b) Indexed Brackets. – For taxable years beginning on or after January 1, 2016, the "Up To" zero tax bracket maximums that are set out in subsection (a) of this section are indexed for the taxable year in accordance with the cost‑of‑living adjustment used under section 1 of the Code to index the federal rate brackets for that taxable year. The indexed zero tax brackets determined under this subsection apply in lieu of the zero tax brackets set out in subsection (a) of this section. The Secretary must publish the zero tax brackets set under this subsection.
(c) Withholding Tables. – The Secretary may provide tables that compute the amount of tax due for a taxable year under this Part. The tables do not apply to an individual who files a return under section 443(a)(1) of the Code for a period of less than 12 months due to a change in the individual's annual accounting period, or to an estate or trust."
SECTION 2.(f) G.S. 105‑152 and G.S. 105‑151, recodified by this act as G.S. 105‑153.8 and G.S. 105‑153.9, read as rewritten:
"§ 105‑153.8. Income tax returns.
(a) Who Must File. – The following individuals shall
must file with the Secretary an income tax return under affirmation:
(1) Every resident required to file an income tax
return for the taxable year under the Code and every whose North
Carolina taxable income exceeds the zero tax bracket amount under G.S. 105‑153.7.
(1a) Every nonresident individual who
(i) derivedmeets all of the following requirements:
a. Receives during the taxable year
gross income that is derived from North Carolina sources during the
taxable yearand is attributable to the ownership of any interest in
real or tangible personal property in this State orState, is
derived from a business, trade, profession, or occupation carried on in this State
and (ii) isState, or is derived from gambling activities in this State.
b. Is required to file an income tax return for the taxable year under the Code.
(2) Repealed by Session Laws 1991 (Reg. Sess., 1992), c. 930, s. 1.
(3) Any individual whom the Secretary believes to be liable for a tax under this Part, when so notified by the Secretary and requested to file a return.
(b) Taxpayer Deceased or Unable to Make Return. – If the
a taxpayer is unable to file the an income tax return,
the return shall be filed by a duly authorized agent of the taxpayer
or by a guardian or other person charged with the care of the person or
property of the taxpayer.taxpayer must file the return. If an
individual who was required to file an income tax return for the taxable year
while living has died before making the return, the administrator or executor
of the estate shall must file the return in the decedent's name
and behalf, and the tax shall be levied upon and collected fromis
payable by the estate.
(c) Information Required With Return. – The income tax
return shall must show the taxable income and adjustmentsadjusted
gross income and modifications required by this Part 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
incomeadjusted gross income or North Carolina taxable income, the
Secretary may require any additional information for the proper computation of
the taxpayer's taxable incomeadjusted gross income and North
Carolina taxable income. In computing the taxpayer's taxable incomeadjusted
gross income and North Carolina taxable income, the Secretary shall must
consider the fair profit that would normally arise from the conduct of the
trade or business.
(e) Joint Returns. – A husband and wife whose federal
taxable incomeadjusted gross income is determined on a joint federal
return shall must file a single income tax return jointly if each
spouse either is a resident of this State or has North Carolina taxable income
and may file a single income tax return jointly if one spouse is not a resident
and has no North Carolina taxable income. Except as otherwise provided in this
Part, a wife and husband filing jointly are treated as one taxpayer for the
purpose of determining the tax imposed by this Part. A husband and wife filing
jointly are jointly and severally liable for the tax imposed by this Part
reduced by the sum of all credits allowable including tax payments made by or
on behalf of the husband and wife. However, if a spouse qualifies for relief of
liability for federal tax attributable to a substantial understatement by the
other spouse pursuant to section 6015 of the Code, that spouse is not liable
for the corresponding tax imposed by this Part attributable to the same
substantial understatement by the other spouse. A wife and husband filing
jointly have expressly agreed that if the amount of the payments made by them
with respect to the taxes for which they are liable, including withheld and
estimated taxes, exceeds the total of the taxes due, refund of the excess may
be made payable to both spouses jointly or, if either is deceased, to the
survivor alone.
(f) Repealed by Session Laws 1991.
"§ 105‑153.9. Tax credits for income taxes paid to other states by individuals.
(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:
(1) The credit is allowed only for taxes paid to
another state or country on income that is derived from sources within
that state or country that and is taxed under its laws
irrespective of the residence or domicile of the recipient, except that whenever
a taxpayer who is deemed to be considered a resident of this
State under the provisions of this Part is deemed also to be considered
a resident of another state or country under the laws of that state or
country, the Secretary may allow a credit against the taxes imposed by this
Part for taxes imposed by and paid to the other state or country on income
taxed under this Part.
(2) The fraction of the adjusted gross income,
as calculated under the Code and adjusted as provided in G.S. 105‑134.6
and G.S. 105‑134.7, modified in G.S. 105‑153.5, 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.
(3) Receipts showing the payment of income taxes to another state or country and a true copy of a return or returns upon the basis of which the taxes are assessed shall be filed with the Secretary when the credit is claimed. If credit is claimed on account of a deficiency assessment, a true copy of the notice assessing or proposing to assess the deficiency, as well as a receipt showing the payment of the deficiency, shall be filed.
(b) If any taxes paid to another state or country for which a taxpayer has been allowed a credit under this section are at any time credited or refunded to the taxpayer, a tax equal to that portion of the credit allowed for the taxes so credited or refunded is due and payable from the taxpayer and is subject to the penalties and interest provided in Subchapter I of this Chapter."
SECTION 2.(g) Part 2 of Article 4 of Chapter 105 of the General Statutes is amended by adding a new section to read:
"§ 105‑153.10. Other tax credits.
(a) Personal Credit. – A taxpayer is allowed a credit against the tax imposed by this Part for the taxable year equal to the taxpayer's adjusted gross income less the zero tax bracket amount set in G.S. 105‑153.7 for the taxpayer's filing status, multiplied by six‑tenths of one percent (0.6%). The tax is subject to a minimum and a maximum amount. The minimum credit is two hundred dollars ($200.00) and the maximum credit is eight hundred dollars ($800.00).
(b) Children. – A taxpayer who is allowed a federal child tax credit under section 24 of the Code for the taxable year is allowed a credit against the tax imposed by this Part for the taxable year for each dependent child for whom the taxpayer is allowed the federal credit. The amount of credit allowed is equal to the amount listed in the table below based on the taxpayer's adjusted gross income.
Filing Status AGI Credit Amount
Married, filing jointly Less than $110,000 $450.00
$110,000‑$200,000 $200.00
Greater than $200,000 0
Head of Household Less than $88,000 $450.00
$88,000‑$160,000 $200.00
Greater than $160,000 0
Single Less than $55,000 $450.00
$55,000‑$100,000 $200.00
Greater than $100,000 0
Married, filing separately Less than $55,000 $450.00
$55,000‑$100,000 $200.00
Greater than $100,000 0
(c) Charitable Contributions. – A taxpayer who makes charitable contributions during the taxable year that are deductible under section 170 of the Code is allowed a credit against the tax imposed by this Part for the taxable year. The credit is six percent (6.0%) of the amount deductible under section 170 of the Code, not to exceed six hundred dollars ($600.00).
(d) Limitations. – A 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. A nonresident or part‑year resident who claims a credit allowed by this section must reduce the amount of the credit by multiplying it by the fraction calculated under G.S. 105‑153.4(b) or (c), as appropriate."
SECTION 2.(h) Notwithstanding the provisions of G.S. 105‑163.15, no addition to tax may be made under that statute for a taxable year beginning on or after January 1, 2015, and before January 1, 2016, with respect to any underpayment of individual income tax to the extent the underpayment was created or increased by this section.
SECTION 2.(i) This section becomes effective for taxable years beginning on or after January 1, 2015.
PART III. REDUCE CORPORATE INCOME TAX RATE and broaden the tax base
SECTION 3.(a) G.S. 105‑130.3 reads as rewritten:
"§ 105‑130.3. Corporations.
A tax is imposed on the State net income of every C
Corporation doing business in this State. An S Corporation is not subject to
the tax levied in this section. The tax is a percentage of the taxpayer's State
net income computed as follows:income. The percentage rate is the
rate set in G.S. 105‑153.7 for the individual income tax.
Income Years Beginning Tax
In 1997 7.5%
In 1998 7.25%
In 1999 7%
After 1999 6.9%."
SECTION 3.(b) G.S. 105‑130.5(a) is amended by adding the following new subdivisions to read:
"(a) The following additions to federal taxable income shall be made in determining State net income:
…
(2a) That portion of a financial institution's interest expense that is allocable to interest income exempt from taxation under this Part. The allocable portion of the interest expense is the portion for which a deduction would be disallowed pursuant to section 265(b) of the Code if the interest were earned on a tax‑exempt obligation as defined in section 265(b) of the Code.
…
(24) The amount required to be added under G.S. 105‑130.5B when the State decouples from federal accelerated depreciation and expensing."
SECTION 3.(c) G.S. 105‑130.5(b) is amended by adding a new subdivision to read:
"(b) The following deductions from federal taxable income shall be made in determining State net income:
…
(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 3.(d) G.S. 105‑130.5(a)(15), (15a), (15b), and (23) are repealed.
SECTION 3.(e) G.S. 105‑130.5(b)(1a)b., (7), (19), (21), (21a), (21b), (22), (24), and (26) are repealed.
SECTION 3.(f) 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 that places property in service during a taxable year listed in the table below and 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 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. The table below indicates the applicable five‑year period.
Taxable Year of Five Taxable Years of
85% Add‑Back 20% Deduction
2010 2011 through 2015
2011 2012 through 2016
2012 2013 through 2017
2013 2014 through 2018
(b) 2009 Depreciation Exception. – A taxpayer that 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 1, 2011. A taxpayer that 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 amount that would have been allowed for that taxable year under section 179 of the Code as of May 1, 2010.
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 in subsection (a) of this section indicates the applicable five‑year period.
(d) 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 3.(g) G.S. 105‑130.7A reads as rewritten:
"§ 105‑130.7A.
Royalty income and interest expense reporting option.options.
(a) Purpose. – Royalty payments received for the use
of intangible property in this State are income derived from doing business in
this State. This section provides taxpayers with an option concerning the
method by which these royalties and interest expense can be
reported for taxation when the recipient and the payer are related members. As
provided in this section, these royalty payments and interest
expenses can be either (i) deducted by the payer and included in the income
of the recipient, or (ii) added back to the income of the payer and excluded
from the income of the recipient.
(b) Definitions. – The following definitions apply in this section:
…
(1b) Interest expense. – An amount directly or indirectly allowed as a deduction under section 163 of the Code.
…
(c) Election. – For the purpose of computing its State net income, a taxpayer must add royalty payments and interest expenses made to, or in connection with transactions with, a related member during the taxable year. This addition is not required for an amount of royalty payments or interest expenses that meets any of the following conditions:
(1) The related member includes the amount as income on a return filed under this Part for the same taxable year that the amount is deducted by the taxpayer, and the related member does not elect to deduct the amount pursuant to G.S. 105‑130.5(b)(20).
(2) The taxpayer can establish that the related member during the same taxable year directly or indirectly paid, accrued, or incurred the amount to a person who is not a related member.
(3) The taxpayer can establish that the related member to whom the amount was paid is organized under the laws of a country other than the United States, the country has a comprehensive income tax treaty with the United States, and the country imposes a tax on the royalty income of the related member at a rate that equals or exceeds the rate set in G.S. 105‑130.3.
(d) Indirect Transactions. – For the purpose of this section, an indirect transaction or relationship has the same effect as if it were direct."
SECTION 3.(h) The following statutes are repealed:
G.S. 105‑130.22 G.S. 105‑151.1
G.S. 105‑130.25
G.S. 105‑130.34 G.S. 105‑151.12
G.S. 105‑130.36 G.S. 105‑151.13
G.S. 105‑130.37 G.S. 105‑151.14
G.S. 105‑130.43
G.S. 105‑130.44 G.S. 105‑151.25
G.S. 105‑130.47 G.S. 105‑151.29
SECTION 3.(i) Articles 3B, 3D, and 3H of Chapter 105 of the General Statutes are repealed.
SECTION 3.(j) G.S. 105‑130.5(a)(10) and (a)(20) are repealed.
SECTION 3.(k) G.S. 105‑129.45 reads as rewritten:
"§ 105‑129.45. Sunset.
This Article is repealed effective January 1, 2015. 2020.
The repeal applies to developments to which federal credits are allocated
on or after January 1, 2015.the date the Article is repealed."
SECTION 3.(l) G.S. 105‑129.51(b) reads as rewritten:
"(b) This Article is repealed for taxable years
beginning on or after January 1, 2014.January 1, 2020."
SECTION 3.(m) This section becomes effective for taxable years beginning on or after January 1, 2014.
PART IV. REPLACE FRANCHISE TAX WITH A lower BUSINESS PRIVILEGE TAX THAT INCLUDES ALL LIMITED LIABILITY ENTITIES
SECTION 4.1.(a) The title of Article 3 of Chapter 105 of the General Statutes reads as rewritten:
"Article 3.
Franchise Tax.Business Privilege Tax."
SECTION 4.1.(b) G.S. 105‑114, 105‑114.1, 105‑120.2, 105‑121.1, 105‑122, 105‑122.1, 105‑125, 105‑127, 105‑128, and 105‑129 are repealed.
SECTION 4.1.(c) Article 3 of Chapter 105 of the General Statutes is amended by adding the following new sections to read:
"§ 105‑114.2. Definitions.
The following definitions apply in this Article:
(1) Affiliate. – A business entity under common ownership with another business entity.
(2) Affiliated group. – Defined in section 1504 of the Code.
(3) Business entity. – Any of the following:
a. A domestic corporation organized under Chapter 55 of the General Statutes or a foreign corporation that has received a certificate of authority under that Chapter authorizing it to do business in this State.
b. An electric membership corporation organized under Chapter 117 of the General Statutes.
c. A domestic limited liability company formed under Chapter 57C of the General Statutes or a foreign limited liability company that has received a certificate of authority under that Chapter authorizing it to do business in this State.
d. A domestic limited partnership formed under Article 5 of Chapter 59 of the General Statutes or a foreign limited partnership that has received a certificate of authority under that Article authorizing it to do business in this State.
e. A domestic limited liability partnership registered under Article 3B of Chapter 59 of the General Statutes or a foreign limited liability partnership registered under Article 4A of that Chapter.
f. A domestic or foreign limited liability limited partnership registered under G.S. 59‑210.
g. Any other business whose form of organization confers limited liability on one or more of its owners.
(4) Capital interest. – The right of a business entity that is not a corporation to receive a percentage of the business entity's assets upon dissolution after payments to creditors.
(5) City. – Defined in G.S. 105‑228.90.
(6) Code. – Defined in G.S. 105‑228.90.
(7) Doing business. – Each and every act, power, or privilege exercised or enjoyed in this State, as an incident to, or by virtue of the powers and privileges granted by the laws of this State.
(8) Holding company. – A business entity that receives during its taxable year more than eighty percent (80%) of its gross income from one or more business entities with which it has common ownership.
(9) Ownership. – The direct or indirect control of more than fifty percent (50%) of the outstanding voting stock or voting capital interests of a business entity. Ownership of voting stock is determined by reference to the constructive ownership rules for stock under section 318 of the Code. Ownership of capital interests is determined by reference to the constructive ownership rules for partnerships, estates, and trusts in section 318(a)(2)(A) and (B) of the Code with the following modifications:
a. The term "capital interest" is substituted for "stock" each place it appears.
b. A noncorporate limited liability company and any noncorporate entity other than a partnership, estate, or trust is treated as a partnership. A noncorporate entity does not include a human being. A noncorporate limited liability company is a limited liability company that does not elect to be taxed as a corporation under the Code.
c. The operating rule of section 318(a)(5) of the Code applies without regard to section 318(a)(5)(C).
(10) Parent. – A business entity that has ownership of another business entity.
(11) Secretary. – Defined in G.S. 105‑228.90.
(12) Subsidiary. – A business entity under the ownership of another business entity.
(13) Taxable year. – Defined in section 441(b) of the Code.
"§ 105‑114.3. Nature of tax.
This Article imposes a privilege tax on a business entity for the privilege of doing business in this State in an organizational form that confers limited liability on one or more owners of the entity. The tax is an accrued tax and is imposed for the exercise of this privilege during the period covered by a tax return. Payment of the tax imposed by this Article is a condition precedent to the right to do business in this State and, for a business entity that is organized or formed in this State, to the right to continue in the entity's organizational form. When a noncorporate business entity is doing business in this State, each owner of the noncorporate business entity is doing business in this State.
"§ 105‑114.4. Business privilege tax imposed.
An annual privilege tax is imposed on a business entity doing business in this State at the rate of one dollar ($1.00) per one thousand dollars ($1,000) of the higher of the business entity's adjusted net worth tax base, determined in accordance with G.S. 105‑114.5, and the business entity's investment tax base, determined in accordance with G.S. 105‑114.6. The tax payable by a business entity may not be less than two hundred dollars ($200.00). The tax payable by a holding company may not be more than seventy‑five thousand dollars ($75,000).
After the end of the taxable year in which a business entity is dissolved, the entity is no longer subject to the tax levied in this Article unless the Secretary finds that the entity has engaged in business activities in this State not appropriate to winding up and liquidating its business.
"§ 105‑114.5. Adjusted net worth tax base.
The net worth of a business entity is the entity's total assets less its total liabilities, computed in accordance with generally accepted accounting principles as of the end of the entity's taxable year. If the entity does not maintain its books and records in accordance with generally accepted accounting principles, then its net worth is computed in accordance with the accounting method used by the entity for federal tax purposes so long as the method fairly reflects the entity's net worth for purposes of the tax levied by this section. A business entity's net worth is subject to the following adjustments:
(1) A liability may not be deducted unless it is a definite and accrued legal liability.
(2) A deduction for depreciation and amortization is determined in accordance with the method used for federal tax purposes.
(3) A deferred tax liability may be netted against a deferred tax asset but may not decrease the deferred tax liability below zero.
(4) A deduction is allowed for billings in excess of costs that are considered a deferred liability under the percentage of completion method of revenue recognition.
(5) No deduction is allowed for indebtedness the business entity owes to a parent, a subsidiary, or an affiliate. If part of the capital of the creditor business entity is capital borrowed from a source other than a parent, a subsidiary, or an affiliate, the debtor business entity may deduct a proportionate part of the indebtedness based on the ratio of the borrowed capital of the creditor business entity to the total assets of the creditor business entity. If the creditor business entity is taxable under this Article, the creditor business entity may deduct the indebtedness from its net worth, to the extent the debtor business entity was not allowed to deduct the indebtedness.
(6) A deduction is allowed for a reserve for the environmental equipment or facilities listed in this subdivision if the business entity has a certification from the appropriate environmental regulatory agency that the business entity has installed or constructed the equipment or facility and is operating it properly. For an air‑cleaning device, the Department of Environment and Natural Resources or a local air pollution agency certified under G.S. 143‑215.112 is the appropriate environmental regulatory agency. For all other equipment and facilities, the Department of Environment and Natural Resources is the appropriate environmental regulatory agency. This subdivision applies to equipment or a facility whose primary purpose is to do one of the following:
a. Reduce air or water pollution resulting from the emission of air contaminants or the discharge of sewage or waste.
b. Recycle or recover solid waste.
c. Reduce the volume of hazardous waste generated.
(7) A corporation may deduct the cost of treasury stock.
(8) An international banking facility may deduct the amount of the facility's assets employed outside the United States that exceeds the facility's liabilities owed to a foreign person, as defined in G.S. 105‑130.5(b)(13)d.
"§ 105‑114.6. Investment tax base.
The investment tax base of a business entity is the entity's investment in real and tangible personal property in this State as of the end of the entity's taxable year. A business entity's investment in property is the original purchase price of or consideration for the property subject to the following adjustments:
(1) A deduction for depreciation or amortization is determined in accordance with the method used for federal tax purposes.
(2) The addition of improvements to the property.
(3) A deduction for indebtedness on the property or on an improvement to the property.
(4) A deduction for a reserve for the environmental equipment or facilities for which a deduction is allowed under G.S. 105‑114.5 from the business entity's net worth, if the entity has the required certification from the appropriate environmental regulatory agency.
(5) For a business entity allowed a tax credit under Article 3E of this Chapter, a deduction for the value of the property for which the credit is allowed.
"§ 105‑114.7. Exclusions in calculating tax.
(a) Disregarded LLC. – A single member limited liability company whose single member is a corporation is disregarded under this Article if it is disregarded for federal income tax purposes. The corporation that is the single member of the disregarded limited liability company must include the net worth and property of the disregarded limited liability company in the corporation's tax base.
(b) No Tax Tiering. – A noncorporate business entity's ownership interest in another noncorporate business entity that is taxable under this Article is excluded in determining the owner's net worth under G.S. 105‑114.5.
(c) Investment Companies. – The following exclusions apply to investment companies in determining their tax liability under this Article:
(1) A regulated investment company may deduct the value of its investments in stocks, bonds, debentures, or other securities or evidences of debt. A regulated investment company is an entity that qualifies as a regulated investment company under section 851 of the Code.
(2) A REIT may deduct the value of its investments in real property, unless the REIT is a captive REIT. The terms "REIT" and "captive REIT" have the same meanings as defined in G.S. 105‑130.12.
(3) A venture capital company may deduct the value of its capital under management. A venture capital company is an entity whose purpose is to provide financing for start‑up businesses and that obtains the capital it uses to provide financing only from investors who are accredited investors under 17 C.F.R. § 230.215 or are institutional investors.
(d) Short Year Adjustment. – A business entity that changes its taxable year and files a "short period" income tax return may deduct from its tax liability computed on an annual basis the amount of tax previously paid that is applicable to the period subsequent to the beginning of the new taxable year.
"§ 105‑114.8. Determination of ownership after certain transfers.
(a) Transfers by Corporations. – Ownership of the capital interests in a noncorporate business entity is determined as of the last day of the business entity's taxable year. If a noncorporate business entity and a corporation or an affiliated group have engaged in a pattern of transferring assets between them with the result that each did not own the capital interest on the last day of its taxable year, the ownership of the capital interests in the noncorporate business entity must be determined as of the last day of the corporation's or group of corporations' taxable year.
(b) Tax‑Free Distribution. – If a noncorporate business entity receives from a person a tax‑free contribution of assets under section 721 of the Code within 120 days after making a tax‑free distribution of assets to that person under section 732 of the Code with the result that the business entity did not own the capital interests on the last day of its taxable year, the assets that were distributed tax‑free are considered owned by the business entity as of the last day of its taxable year.
"§ 105‑114.9. Apportionment by multistate business entities.
A business entity that is doing business in this State and in one or more other states must apportion its net worth to this State. A corporation that is subject to income tax under Article 4 of this Chapter must use the fraction it applies in apportioning its income under that Article. A business entity that is not subject to income tax under Article 4 of this Chapter must apportion its net worth by using the fraction it would be required to apply in apportioning its income if it were subject to that Article. A business entity that believes this apportionment method subjects a greater portion of its net worth 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 of apportionment, in the same manner as provided in G.S. 105‑130.4(t1).
"§ 105‑114.10. Return and payment.
The tax imposed by G.S. 105‑114.4 is due when a return is due. A return is due on or before the fifteenth day of the fourth month following the end of the business entity's income year. A taxpayer may ask the Secretary for an extension of time to file a return under G.S. 105‑263. A business entity must file a return under affirmation with the Secretary at the place and in the manner prescribed by the Secretary. The return must be signed by the president, vice president, treasurer, or chief financial officer of the business entity.
…
"§ 105‑116.2. Compensating privilege tax on seller that is not a registered retailer.
(a) Tax. – An annual privilege tax is imposed on a person who sells tangible personal property, digital property, or services at retail to a consumer, as defined in G.S. 105‑164.3, and who meets both of the following descriptions:
(1) The person is not registered as a retailer under Article 5 of this Chapter.
(2) The person reported gross sales of at least five million dollars ($5,000,000) on its most recent federal income tax return.
(b) Rate and Scope. – The tax is a percentage of the retailer's gross receipts derived from sales within this State. The percentage rate of the tax is the same as the combined rate under G.S. 105‑164.3. This tax is in addition to the tax imposed by G.S. 105‑114.4. The tax is payable in the same manner as provided in G.S. 105‑114.10.
(c) Noncompliance. – A debt owed to a person that does not comply with this section is not collectible and is not subject to execution under Article 28 of Chapter 1 of the General Statutes or any other provision of law. An assignment of a debt is subject to the collection restrictions imposed by this subsection.
"§ 105‑116.3. Compensating privilege tax on unregulated electric power producer.
(a) Tax. – An annual privilege tax is imposed on a person that meets all of the following descriptions:
(1) Produces electric power by using the public waters of this State and sells the electric it produces.
(2) Is not subject to regulation by the North Carolina Utilities Commission.
(3) Received at least five million dollars ($5,000,000) in gross receipts during the preceding calendar year from its sales of electric power.
(b) Rate. – The tax is a percentage of the person's gross receipts derived from sales of electric power produced by use of the State's public waters. The percentage rate of the tax is the same as the combined rate under G.S. 105‑164.3. This tax is in addition to the tax imposed by G.S. 105‑114.4. The tax is payable in the same manner as provided in G.S. 105‑114.10.
"§ 105‑125.1. Exempt business entities.
A business entity listed in this section is exempt from the privilege tax imposed by G.S. 105‑114.4 unless it has unrelated business income. A business entity that is listed in this section and has unrelated business income is subject to the tax imposed by G.S. 105‑114.4 on its adjusted net worth or property attributable to its unrelated business income. Upon request of the Secretary, an exempt business entity must establish its claim for exemption in writing. The exempt entities are:
(1) A business entity exempt from federal income tax under the Code.
(2) An insurance company subject to tax under Article 8B of this Chapter.
(3) A single member limited liability company that is disregarded for federal income tax purposes if the single member is a corporation and the disregarded limited liability company's net worth and property is included in that of its single member.
(4) A real estate mortgage investment conduit, as defined in section 860D of the Code."
SECTION 4.1.(d) This section is effective for taxable years beginning on or after January 1, 2015, and applies to taxes due in that year or a subsequent year.
SECTION 4.2.(a) G.S. 55‑1‑22 reads as rewritten:
"§ 55‑1‑22. Filing, service, and copying fees.
(a) The Secretary of State shall collect the following fees when the documents described in this subsection are delivered to the Secretary for filing:
Document Fee
…
(23) Annual
report (paper) 25.00No
fee
(23a) Annual
report (electronic) 18.00
…
(b) The Secretary of State shall collect a fee of ten dollars ($10.00) each time process is served on the Secretary under this Chapter. The party to a proceeding causing service of process is entitled to recover this fee as costs if the party prevails in the proceeding.
(c) The Secretary of State shall collect the following fees for copying, comparing, and certifying a copy of any filed document relating to a domestic or foreign corporation:
(1) One dollar ($1.00) a page for copying or comparing a copy to the original.
(2) Fifteen dollars ($15.00) for a paper certificate.
(3) Ten dollars ($10.00) for an electronic certificate.
(d) The fee for the annual report in
subdivision (23) of this section is nonrefundable."
SECTION 4.2.(b) G.S. 55‑16‑22 reads as rewritten:
"§ 55‑16‑22. Annual report.
(a) Except as provided in subsections (a1) and (a2)
of this section, each domestic corporation and each foreign corporation
authorized to transact business in this State shall deliver an annual report to
the Secretary of Revenue in paper form or, in the alternative, directly to the
Secretary of State in electronic form as prescribed by the Secretary of State
under this section.Requirement. – The following businesses must file an
annual report with the Secretary of State on a form prescribed by the Secretary
and in the manner required by the Secretary:
(1) A corporation that is incorporated under this Chapter.
(2) A corporation that has received a certificate of authority under this Chapter authorizing the corporation to transact business in this State.
(3) A company that is an insurance company regulated under Chapter 58 of the General Statutes.
(a1) Each insurance company subject to the
provisions of Chapter 58 of the General Statutes shall deliver an annual report
to the Secretary of State.
(a2) A domestic corporation governed by
Chapter 55B of the General Statutes is exempt from this section.
(a3) The annual report required by this
section shall be in a form jointly prescribed by the Secretary of Revenue and
the Secretary of State. The Secretary of Revenue shall provide the form needed
to file an annual report. The Secretary of State shall prescribe the form
needed to file an annual report electronically and shall provide this form by
electronic means. The annual report shall set forth all of the following:
(1) The name of the corporation and the state
or country under whose law it is incorporated.
(2) The street address, and the mailing
address if different from the street address, of the registered office, the
county in which its registered office is located, and the name of its
registered agent at that office in this State, and a statement of any change of
such registered office or registered agent, or both.
(3) The address and telephone number of its
principal office.
(4) The names, titles, and business addresses
of its principal officers.
(4a) Repealed by Session Laws 1997‑475,
s. 6.1, effective January 1, 1998.
(5) A brief description of the nature of its
business.
If the information contained in the most recently filed
annual report has not changed, a certification to that effect may be made
instead of setting forth the information required by subdivisions (2) through
(5) of this subsection.
(b) Content. – An annual report must set out the
information listed in this subsection. The information must be current as of
the date the business completes the report.Information in the annual
report must be current as of the date the annual report is executed on behalf
of the corporation. If the information set out in the business' most
recent annual report has not changed, the business may certify on its annual
report that the information has not changed in lieu of restating the
information. A business may amend an annual report at any time to correct,
update, or augment information included in a prior report.
The following information must be included on the annual report of a business:
(1) Its name.
(2) The state or country under whose law it is incorporated or, if it is an insurance company and is not a corporation, the state or country under whose law it is organized.
(3) The street address of its registered office in this State, the county in which the registered office is located, and the name of the registered agent at the registered office. If the registered office or registered agent differs from the registered office or registered agent listed on the preceding annual report, the report must indicate that the registered office or registered agent has changed. A change in registered office or registered agent that is indicated on an annual report is effective when the report is filed.
(4) The mailing address of its registered office, if the street address of the office is not the mailing address.
(5) The address and telephone number of its principal office.
(6) The name, title, and business address of each of its principal officers.
(7) A brief description of the nature of its business.
(c) Due Date. – An annual report is due by the 15th
day of the fourth month following the close of the fiscal year of the business
filing the report. An annual report is delinquent if it is not filed within 120
days after it is due.eligible to be delivered to the Secretary of
Revenue is due by the due date for filing the corporation's income and franchise
tax returns. An extension of time to file a return is an extension of time to
file an annual report. At the option of the filer, an annual report may be
filed directly with the Secretary of State in electronic form. An annual report
required to be delivered to the Secretary of State is due by the fifteenth day
of the fourth month following the close of the corporation's fiscal year.
(d) Incomplete Report. – If the Secretary of State
determines that an annual report filed with the Secretary does not contain the
information required by this section, the Secretary must send a written notice
to the business that the report is incomplete. An annual report that is
corrected to contain the information and filed with the Secretary within 30
days of the date of the notice is considered timely filed.If an annual
report does not contain the information required by this section, the Secretary
of State shall promptly notify the reporting domestic or foreign corporation in
writing and return the report to it for correction. If the report is corrected
to contain the information required by this section and delivered to the
Secretary of State within 30 days after the effective date of notice, it is
deemed to be timely filed.
(e) Amendments to any previously filed annual
report may be filed with the Secretary of State at any time for the purpose of
correcting, updating, or augmenting the information contained in the annual
report.
(f) Expired.
(g) When a statement of change of registered
office or registered agent is filed in the annual report, the change shall
become effective when the statement is received by the Secretary of State.
(h) If the Secretary of State does not
receive an annual report within 120 days of the date the return is due, the
Secretary of State may presume that the annual report is delinquent. This
presumption may be rebutted by receipt of the annual report from the Secretary
of Revenue or by evidence of delivery presented by the filing corporation."
SECTION 4.2.(c) G.S. 57C‑1‑22(a)(25) reads as rewritten:
"(a) The Secretary of State shall collect the following fees when the documents described in this subsection are delivered to the Secretary of State for filing:
Document Fee
…
(25) Annual
report .................................................................................. 200.00No
fee
…."
SECTION 4.2.(d) G.S. 59‑35.2(a)(18) reads as rewritten:
"(a) The Secretary of State shall collect the following fees when the documents described in this subsection are submitted by a partnership to the Secretary of State for filing:
Document Fee
…
(18) Annual
report .................................................................................. 200.00No
fee
…."
SECTION 4.2.(e) G.S. 59‑1106(a)(22) reads as rewritten:
"(a) The Secretary of State shall collect the following fees when the documents described in this subsection are delivered to the Secretary of State for filing:
Document Fee
…
(22) Annual
report for a limited liability limited partnership ....................... 200.00No
fee
…."
SECTION 4.2.(f) G.S. 105‑122.1 is repealed.
SECTION 4.2.(g) G.S. 105‑228.90(a) reads as rewritten:
"(a) Scope. – This Article applies to Subchapters
I, V, and VIII of this Chapter, to the annual report filing requirements of G.S. 55‑16‑22,
to the primary forest product assessment levied under Article 12 of Chapter
113A of the General Statutes, and to inspection taxes levied under Article 3 of
Chapter 119 of the General Statutes."
SECTION 4.2.(h) G.S. 105‑256.1 is repealed.
SECTION 4.2.(i) G.S. 105‑259(a) reads as rewritten:
"(a) Definitions. – The following definitions apply in this section:
(1) Employee or officer. – The term includes a former employee, a former officer, and a current or former member of a State board or commission.
(2) Tax information. – Any information from any source concerning the liability of a taxpayer for a tax, as defined in G.S. 105‑228.90. The term includes the following:
a. Information contained on a tax return, a tax report, or an application for a license for which a tax is imposed.
b. Information obtained through an audit of a taxpayer or by correspondence with a taxpayer.
c. Information on whether a taxpayer has filed a tax return or a tax report.
d. A list or other compilation of the names, addresses, social security numbers, or similar information concerning taxpayers.
The term does not include (i) statistics
classified so that information about specific taxpayers cannot be identified,
(ii) an annual report required to be filed under G.S. 55‑16‑22
or (iii) identified or the amount of tax refunds paid to either a
governmental entity listed in G.S. 105‑164.14(c) or to a
State agency."
SECTION 4.2.(j) This section becomes effective January 1, 2015. Subsection (f) of this section applies to returns due on or after April 15, 2015, for taxable years beginning on or after January 1, 2015. The remaining sections apply to annual reports due on or after January 1, 2015.
PART V. REDUCE SALES TAX RATE AND BROADEN SALES TAX BASE
SECTION 5.1.(a) G.S. 105‑164.13(13c), (28), (30), (36), (39), and (50) are repealed.
SECTION 5.1.(b) G.S. 105‑164.13C and G.S. 105‑164.13D are repealed.
SECTION 5.1.(c) This section becomes effective July 1, 2013.
SECTION 5.2.(a) The following statutes are repealed:
G.S. 105‑33 G.S. 105‑103
G.S. 105‑33.1 G.S. 105‑105
G.S. 105‑37.1 G.S. 105‑106
G.S. 105‑38.1 G.S. 105‑108
G.S. 105‑40 G.S. 105‑109
SECTION 5.2.(b) This section becomes effective January 1, 2014, and applies to receipts from admission tickets sold on or after that date.
SECTION 5.3.(a) G.S. 105‑116, 105‑116.1, 105‑164.21A, and 159B‑27(b), (c), (d), and (e) are repealed.
SECTION 5.3.(b) G.S. 105‑164.13(44) and Article 5E of Chapter 105 of the General Statutes are repealed.
SECTION 5.3.(c) Pursuant to G.S. 62‑31 and G.S. 62‑32, the Utilities Commission must lower the rate set for the following utilities:
(1) Electricity to reflect the repeal of G.S. 105‑116 and the resulting liability of electric power companies for the tax imposed under G.S. 105‑114.4 and for the increase in the rate of tax imposed on sales of electricity under G.S. 105‑164.4.
(2) Piped natural gas to reflect the repeal of Article 5E of Chapter 105 of the General Statutes, the repeal of the credit formerly allowed under G.S. 105‑122(d1), and the resulting liability of companies for the tax imposed on sales of piped natural gas under G.S. 105‑164.4.
SECTION 5.3.(d) Notwithstanding G.S. 160A‑211:
(1) No city shall impose or collect any greater franchise, privilege, or license taxes, in the aggregate, on an electric power company that was imposed and collected on or before January 1, 1947.
(2) A city may not levy a license, franchise, or privilege tax on a person engaged in the business of supplying piped natural gas.
SECTION 5.3.(e) This section becomes effective January 1, 2014. Subsection (a) of this section applies to taxes due in the 2014 tax year or a subsequent year. Subsection (b) of this section applies to piped natural gas received on or after January 1, 2014, pursuant to a sale made on or before that date. The remainder of this section is effective when it becomes law.
SECTION 5.4.(a) G.S. 105‑164.3 reads as rewritten:
"§ 105‑164.3. Definitions.
The following definitions apply in this Article:
…
(1c) Alteration, repair, maintenance, cleaning, and installation services. – The term includes the activities listed in this subdivision:
a. Altering tangible personal property by tailoring, monogramming, engraving, or making similar changes to the property.
b. Repairing tangible personal property to restore it to proper working order.
c. Maintaining tangible personal property to keep the property in working order, to avoid breakdown, or to prevent unnecessary repairs.
d. Cleaning tangible personal property.
e. Installing tangible personal property.
…
(2b) Capital equipment. – Equipment that is capitalized by the purchaser for tax purposes under the Code and attachments and repair parts for that equipment.
…
(4a) Combined general rate. – The State's general
rate of tax set in G.S. 105‑164.4(a) plus the sum of the rates of
the local sales and use taxes authorized by Subchapter VIII of this Chapter for
every county in this State.
…
(5e) Datacenter equipment. – Capital equipment that is located and used at a datacenter for any of the following:
a. For the provision of a service included in the business of the primary user of the datacenter, including equipment cooling systems for managing the performance of the property, hardware and software for distributed and mainframe computers and servers, data storage devices, network connectivity equipment, and peripheral components and equipment.
b. For the generation, transformation, transmission, distribution, or management of electricity, including exterior substations and other capital equipment used for these purposes.
c. To provide related computer engineering or computer science research.
…
(35) Retailer. – A person engaged in the business of any of the following:
a. Making sales at retail, offering to make sales at retail, or soliciting sales at retail of tangible personal property, digital property, or services for storage, use, or consumption in this State. When the Secretary finds it necessary for the efficient administration of this Article to regard any sales representatives, solicitors, representatives, consignees, peddlers, or truckers as agents of the dealers, distributors, consignors, supervisors, employers, or persons under whom they operate or from whom they obtain the items sold by them regardless of whether they are making sales on their own behalf or on behalf of these dealers, distributors, consignors, supervisors, employers, or persons, the Secretary may so regard them and may regard the dealers, distributors, consignors, supervisors, employers, or persons as "retailers" for the purpose of this Article. A person who sells tangible personal property, other than the person's own household personal property, at a specialty market as defined in G.S. 66‑250 is a retailer.
b. Delivering, erecting, installing, or applying tangible personal property for use in this State, regardless of whether the property is permanently affixed to real property or other tangible personal property.
c. Making a remote sale, if one of the conditions listed in G.S. 105‑164.8(b) is met.
…
(38b) Service contract. – A warranty agreement, a maintenance agreement, a repair contract, or a similar agreement or contract by which the seller agrees to maintain or repair tangible personal property.
(38d) Short‑term lease or rental. – Defined in G.S. 105‑187.1."
SECTION 5.4.(b) G.S. 105‑164.4 reads as rewritten:
"§ 105‑164.4.
Tax imposed on retailers.Privilege tax imposed on retailer at various
rates.
(a) Tax Imposed. – A privilege tax is imposed on a retailer at the following percentage rates of the retailer's net taxable sales of tangible personal property, digital property, and services. The general rate of tax is four and three‑quarters percent (4.75%). The general rate applies to a taxable item unless the item is subject to tax at the combined rate of tax or to a rate of tax that differs from both the general rate and the combined rate. Subsection (b) of this section lists the items that are subject to the general rate. An item taxable under subsection (b) of this section is also subject to local sales and use tax. Subsection (c) of this section lists the items that are subject to the combined rate.
(b) General Rate. – The general rate of tax applies to a retailer's net taxable sales of the following:
(1) Tangible personal property. – Tangible personal property that is not subject to tax under another subsection of this section. If tangible personal property that is leased or rented is subject to a different rate under another subsection of this section, then the rate and the maximum tax, if any, set in the other subsection applies to the lease or rental of the property. A person who leases or rents property must collect the tax imposed by this section on the separate retail sale of the property.
(2) Digital property. – Digital property 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.
e. Computer software.
(3) Accommodations. – The rental of an accommodation. These rentals are taxed in accordance with G.S. 105‑164.4E.
(4) Prepaid telephone service. – The sale or recharge of prepaid telephone calling service. The tax applies regardless of whether tangible personal property, such as a card or a telephone, is transferred. The tax applies to a service that is sold in conjunction with prepaid wireless calling service. Prepaid telephone calling service is taxable at the point of sale instead of at the point of use and is sourced in accordance with G.S. 105‑164.4B. Prepaid telephone calling service taxed under this subdivision is not subject to tax as a telecommunications service.
(5) Tangible personal property services. – Any of the following:
a. A service contract.
b. Alteration, repair, maintenance, cleaning, and installation services.
c. Short‑term lease or rental of any of the following:
1. A mini‑warehouse or other secure self‑storage space.
2. Storage for furs and other clothing not held for sale.
3. Docking or storage for a boat or other watercraft.
4. Storage for an aircraft.
(6) Reserved.
(7) Reserved.
(8) Entertainment and recreation. – Charges for entertainment or recreational activities are taxed in accordance with G.S. 105‑164.4F.
(9) Satellite radio. – Satellite digital auto radio service. For services received by a mobile or portable station, the service is sourced to the subscriber's business or home address.
(c) Combined Rate. – The combined rate of tax applies to a retailer's net taxable sales of the following:
(1) Telecommunications. – Providing telecommunications service and ancillary service. These services are taxed in accordance with G.S. 105‑164.4C.
(2) Video programming. – Providing video programming to a subscriber in this State.
(3) Liquor. – Spirituous liquor other than mixed beverages. As used in this subdivision, the terms "spirituous liquor" and "mixed beverage" have the meanings provided in G.S. 18B‑101.
(d) Manufactured and Modular Home. – The sale of a manufactured home or a modular home is treated as if it were the sale of real property.
(a) A privilege tax is imposed on a retailer
at the following percentage rates of the retailer's net taxable sales or gross
receipts, as appropriate. The general rate of tax is four and three‑quarters
percent (4.75%).
(1) The general rate of tax applies to the
sales price of each item or article of tangible personal property that is sold
at retail and is not subject to tax under another subdivision in this section.
(1a) The rate of two percent (2%) applies to
the sales price of each manufactured home sold at retail, including all accessories
attached to the manufactured home when it is delivered to the purchaser. The
maximum tax is three hundred dollars ($300.00) per article. Each section of a
manufactured home that is transported separately to the site where it is to be
erected is a separate article.
(1b) The rate of three percent (3%) applies to
the sales price of each aircraft or boat sold at retail, including all
accessories attached to the item when it is delivered to the purchaser. The
maximum tax is one thousand five hundred dollars ($1,500) per article.
(1c), (1d) and (1e) Repealed by Session Laws
2005‑276, s. 33.4(b), effective January 1, 2006.
(1f) The rate of two and eighty‑three‑hundredths
percent (2.83%) applies to the sales price of electricity that is measured by a
separate meter or another separate device and sold to a commercial laundry or
to a pressing and dry‑cleaning establishment for use in machinery used in
the direct performance of the laundering or the pressing and cleaning service.
a. Repealed by Session Laws 2007‑397,
s. 10(b), effective October 1, 2007, and applicable to sales occurring on or
after that date.
b. Repealed by Session Laws 2006‑66,
s. 24.19(a), effective July 1, 2007, and applicable to sales made on or after
that date.
c. Repealed by Session Laws 2007‑397,
s. 10(b), effective October 1, 2007, and applicable to sales occurring on or
after that date.
(1g) Repealed by Session Laws 2004‑110,
s. 6.1, effective October 1, 2004, and applicable to sales of electricity made
on or after that date.
(1h) Expired pursuant to Session Laws 2004‑110,
s. 6.4, effective for sales made on or after October 1, 2007.
(1i) Repealed by Session Laws 2007‑397,
s. 10(a), effective October 1, 2007, and applicable to sales occurring on or
after that date.
(1j) Repealed by Session Laws 2007‑397,
s. 10(f), effective July 1, 2010, and applicable to sales occurring on or after
that date.
a. Sales of electricity to manufacturing
industries and manufacturing plants for use in connection with the operation of
the industries and plants.
b. Sales of electricity to farmers to be
used by them for any farming purposes other than preparing food, heating
dwellings, and other household purposes.
(2) The applicable percentage rate applies to
the gross receipts derived from the lease or rental of tangible personal
property by a person who is engaged in the business of leasing or renting
tangible personal property, or is a retailer and leases or rents property of
the type sold by the retailer. The applicable percentage rate is the rate and
the maximum tax, if any, that applies to a sale of the property that is leased
or rented. A person who leases or rents property shall also collect the tax
imposed by this section on the separate retail sale of the property.
(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 a private residence or cottage that is rented for fewer than 15 days
in a calendar year or to an accommodation rented to the same person for a
period of 90 or more continuous days.
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, 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. 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.
(4) Every person engaged in the business of
operating a dry cleaning, pressing, or hat‑blocking establishment, a
laundry, or any similar business, engaged in the business of renting clean
linen or towels or wearing apparel, or any similar business, or engaged in the
business of soliciting cleaning, pressing, hat blocking, laundering or linen
rental business for any of these businesses, is considered a retailer under
this Article. A tax at the general rate of tax is levied on the gross receipts
derived by these retailers from services rendered in engaging in any of the
occupations or businesses named in this subdivision. The tax imposed by this
subdivision does not apply to receipts derived from coin, token, or card‑operated
washing machines, extractors, and dryers. The tax imposed by this subdivision
does not apply to gross receipts derived from services performed for resale by
a retailer that pays the tax on the total gross receipts derived from the
services.
(4a) The rate of three percent (3%) applies to
the gross receipts derived from sales of electricity, other than sales of
electricity subject to tax under another subdivision in this section. A person
who sells electricity is considered a retailer under this Article.
(4b) A person who sells tangible personal
property at a specialty market, other than the person's own household personal
property, is considered a retailer under this Article. A tax at the general
rate of tax is levied on the sales price of each article sold by the retailer
at the specialty market. The term "specialty market" has the same
meaning as defined in G.S. 66‑250.
(4c) The combined general rate applies to the
gross receipts derived from providing telecommunications service and ancillary
service. A person who provides telecommunications service or ancillary service
is considered a retailer under this Article. These services are taxed in
accordance with G.S. 105‑164.4C.
(4d) The sale or recharge of prepaid telephone
calling service is taxable at the general rate of tax. The tax applies
regardless of whether tangible personal property, such as a card or a
telephone, is transferred. The tax applies to a service that is sold in
conjunction with prepaid wireless calling service. Prepaid telephone calling
service is taxable at the point of sale instead of at the point of use and is
sourced in accordance with G.S. 105‑164.4B. Prepaid telephone
calling service taxed under this subdivision is not subject to tax as a
telecommunications service.
(5) Repealed by Session Laws 1998‑212,
s. 29A.1(a), effective May 1, 1999.
(6) The combined general rate applies to the
gross receipts derived from providing video programming to a subscriber in this
State. A cable service provider, a direct‑to‑home satellite service
provider, and any other person engaged in the business of providing video programming
is considered a retailer under this Article.
(6a) The general rate applies to the gross
receipts derived from providing satellite digital audio radio service. For
services received by a mobile or portable station, the service is sourced to
the subscriber's business or home address. A person engaged in the business of
providing satellite digital audio radio service is a retailer under this
Article.
(6b) The general rate applies to the digital
property 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.
(7) The combined general rate applies to the
sales price of spirituous liquor other than mixed beverages. As used in this
subdivision, the terms "spirituous liquor" and "mixed beverage"
have the meanings provided in G.S. 18B‑101.
(8) The rate of two and one‑half
percent (2.5%) applies to the sales price of each modular home sold at retail,
including all accessories attached to the modular home when it is delivered to
the purchaser. The sale of a modular home to a modular homebuilder is
considered a retail sale. A person who sells a modular home at retail is
allowed a credit against the tax imposed by this subdivision for sales or use
tax paid to another state on tangible personal property incorporated in the
modular home. The retail sale of a modular home occurs when a modular home
manufacturer sells a modular home to a modular homebuilder or directly to the
end user of the modular home.
(b) The tax levied in this section shall be
collected from the retailer and paid by him at the time and in the manner as
hereinafter provided. Provided, however, that any person engaging or continuing
in business as a retailer shall pay the tax required on the net taxable sales
of such business at the rates specified when proper books are kept showing
separately the gross proceeds of taxable and nontaxable sales of tangible
personal property in such form as may be accurately and conveniently checked by
the Secretary or his duly authorized agent. If such records are not kept
separately the tax shall be paid as a retailer on the gross sales of business
and the exemptions and exclusions provided by this Article shall not be
allowed. The tax levied in this section is in addition to all other taxes
whether levied in the form of excise, license or privilege or other taxes.
(c) Certificate of Registration. – Before a
person may engage in business as a retailer or a wholesale merchant, the person
must obtain a certificate of registration from the Department in accordance
with G.S. 105‑164.29."
SECTION 5.4.(c) The following statutes are repealed:
G.S. 105‑164.3(8e)
G.S. 105‑164.13(49)
G.S. 105‑164.13(49a)
G.S. 105‑164.44G
SECTION 5.4.(d) Article 5 of Chapter 105 of the General Statutes is amended by adding the following new sections to read:
"§ 105‑164.4E. Accommodation rentals.
(a) Definition. – The following definitions apply in this section:
(1) Accommodation. – A hotel room, a motel room, a residence, a cottage, or a similar lodging facility for occupancy by an individual.
(2) 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.
(3) Rental agent. – The term includes a real estate broker, as defined in G.S. 93A‑2.
(b) Tax. – The gross receipts derived from the rental of an accommodation are taxed at the general rate set in G.S. 105‑164.4. 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.
(c) Facilitator Transactions. – 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, 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. 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 section on a retailer and a facilitator are considered terms of the contract between the retailer and the facilitator.
(d) Rental Agent. – 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 section. The liability of a rental agent for the tax imposed by this section relieves the provider of the accommodation from liability.
(e) Exemptions. – The tax imposed by this section does not apply to the following:
(1) A private residence or cottage that is rented for fewer than 15 days in a calendar year.
(2) An accommodation supplied to the same person for a period of 90 or more continuous days.
"§ 105.164.4F. Entertainment and recreation.
(a) Tax. – Charges for an entertainment or recreational activity listed in this subsection are taxed at the general rate set in G.S. 105‑164.4. Charges include admission charges, user charges, registration charges, membership charges, and charges for amenities. Offering an activity listed in this subsection is a service.
(1) Charges for admittance to any of the following entertainment or recreational activities:
a. A live performance or live event of any kind.
b. A movie or another audiovisual work.
c. A museum, a cultural site, a garden, an exhibit, a show, or a similar attraction or a guided tour at any of these attractions.
(2) Charges that enable a consumer to play or participate in, or use property or a facility to play or participate in, any of the entertainment or recreational activities listed in this subdivision. A consumer's play or participation can be in person or online. Charges for online play or participation include charges to acquire virtual goods or attributes.
a. A game.
b. A sport.
c. A fitness activity.
(b) Exclusion for Membership Charges. – The tax imposed by this section does not apply to the portion of a membership charge that meets any of the following descriptions:
(1) It is deductible as a charitable contribution under section 170 of the Code.
(2) It allows access to a dining facility or other property that does not enable the member to play or participate in an entertainment or recreational activity listed in subdivision (a)(2) of this section.
(c) Ticket Resales. – When an admission ticket is resold and the price of the admission ticket is printed on the face of the ticket, the tax does not apply to the face price. When an admission ticket is resold and the price of the admission ticket is not printed on the face of the ticket, the tax applies to the difference between the amount the reseller paid for the ticket and the amount the reseller charges for the ticket."
SECTION 5.4.(e) G.S. 105‑164.13 is amended by adding the following new subdivisions to read:
"(60) Any of the following provided for tangible personal property that is exempt from tax under this Article, other than an item exempt from tax under G.S. 105‑164.13(32):
a. A service contract.
b. Alteration, repair, maintenance, cleaning, or installation services.
(61) Reserved.
(62) A service provided by a self‑employed individual who is 17 years of age or younger.
(63) Admission charges to any of the following recreational or entertainment activities:
a. An event that is held at an elementary or secondary school and is sponsored by the school.
b. A commercial agricultural fair that meets the requirements of G.S. 106‑520.1, as determined by the Commissioner of Agriculture.
c. A festival or other recreational or entertainment activity that lasts no more than seven consecutive days and is sponsored by a nonprofit entity that is exempt from tax under Article 4 of this Chapter and uses the entire proceeds of the activity exclusively for the entity's nonprofit purposes. This exemption applies to no more than two activities sponsored by the entity during a calendar year.
(64) Short‑term lease or rental of a mini‑warehouse or other secure self‑storage space by a member of the Armed Forces of the United States."
SECTION 5.4.(f) G.S. 105‑187.3(a) reads as rewritten:
"(a) Amount. – The rate of the use tax imposed by
this Article is three percent (3%) of the retail value of a motor vehicle for
which a certificate of title is issued. The tax is payable as provided in G.S. 105‑187.4.
The maximum tax is one thousand dollars ($1,000) for each certificate of title
issued for a Class A or Class B motor vehicle that is a commercial motor
vehicle, as defined in G.S. 20‑4.01. The maximum tax is one thousand
five hundred dollars ($1,500) for each certificate of title issued for a
recreational vehicle that is not subject to the one thousand dollar ($1,000)
maximum tax."
SECTION 5.4.(g) This section becomes effective January 1, 2014, and applies to sales made on or after that date and to gross receipts received on or after January 1, 2014, from admissions purchased on or after that date. Gross receipts received on or after January 1, 2014, from admissions purchased before that date are taxable under G.S. 105‑37.1 or G.S. 105‑38.1, as appropriate.
SECTION 5.5.(a) G.S. 105‑164.4(a), as amended by Section 5.4(b) of this act, is further amended by adding the following new subdivisions to read:
"(6) Property care and maintenance services. – Any of the following:
a. Exterminating and controlling birds, mosquitoes, rodents, termites, and other insects and pests.
b. Providing any of the following landscaping services:
1. Installing or maintaining a tree, shrub, plant, lawn, or garden, either indoors or outdoors, or providing other similar landscape care and maintenance services.
2. Installing or maintaining a walkway, retaining wall, deck, fence, water feature, or other similar structure to enhance the landscape of an area.
c. Cleaning the interior or exterior of a building or other structure.
d. Cleaning an item, such as a carpet or gutter, that is attached to a structure.
e. Cleaning a driveway, a parking lot, a swimming pool, the grounds at a building or other structure, or another outdoor area.
(7) Security services. – Any of the following:
a. Guard or security patrol service.
b. Armored car service.
c. Remote monitoring of a security alarm system.
d. Locksmith service.
e. Telematic service that provides communication, tracking, and emergency response services to motor vehicle owners."
SECTION 5.5.(b) Part 2 of Article 5 of Chapter 105 of the General Statutes is amended by adding a new section to read:
"§ 105‑164.12D. Tangible personal property installed by a person who provides a landscaping service.
A person who provides a landscaping service and who installs a tree, shrub, or other tangible personal property in the course of providing the service may do so as a performance contractor or as an installing retailer. A person who provides a landscaping service as a performance contractor is the consumer of all tangible personal property installed in the course of providing the service. When a person provides a landscaping service as an installing retailer, the purchaser of the service and not the provider of the service is considered the consumer of tangible personal property installed in the course of providing the service.
A person is considered to provide a landscaping service as an installing retailer when the person installs tangible personal property in the course of providing a landscaping service and the person gives the purchaser a bill that separately states the sales price of the tangible personal property that is installed. In this circumstance, tax applies to the sales price of the tangible personal property that is separately stated and to the sales price of any other charges for the service, and the service provider's prior purchase of the separately stated tangible personal property is a purchase for resale. In the absence of a bill that separately states the sales price of tangible personal property that is installed by a person who provides a landscaping service, tax applies to the sales price of the service, and the provider's prior purchase of the tangible personal property that is installed is a purchase for use or consumption."
SECTION 5.5.(c) G.S. 105‑164.13 is amended by adding the following subdivisions to read:
"(4h) A service provided to a farmer, as defined in subdivision (1) of this section, to control pests in crops grown for commercial purposes.
…
(61) A property maintenance service described in G.S. 105‑164.4(a)(6) that is provided for any of the following:
a. A newly constructed building or other structure.
b. A right‑of‑way or utility easement."
SECTION 5.5.(d) This section becomes effective July 1, 2014.
SECTION 5.6.(a) G.S. 105‑164.13B reads as rewritten:
"§ 105‑164.13B.
Food exempt from tax.Most food taxable at low rate.
(a) State Exemption.State Tax. – Food is
exempt from the taxes imposed by this Article subject to tax at the
rate of one percent (1%) unless the food is included in one of the
subdivisions in this subsection. The following food items are subject to tax:tax
at the general rate:
(1) Repealed by Session Laws 2005‑276, s. 33.10, effective October 1, 2005.
(2) Dietary supplements.
(3) Food sold through a vending machine.
(4) Prepared food, other than bakery items sold without eating utensils by an artisan bakery. The term "bakery item" includes bread, rolls, buns, biscuits, bagels, croissants, pastries, donuts, danish, cakes, tortes, pies, tarts, muffins, bars, cookies, and tortillas. An artisan bakery is a bakery that meets all of the following requirements:
a. It derives over eighty percent (80%) of its gross receipts from bakery items.
b. Its annual gross receipts, combined with the gross receipts of all related persons as defined in G.S. 105‑163.010, do not exceed one million eight hundred thousand dollars ($1,800,000).
(5) Soft drinks.
(6) Repealed by Session Laws 2003‑284, s. 45.6B, effective January 1, 2004.
(7) Candy.
(b) Administration of Local Food Tax.Local
Tax. – The Secretary must administer local sales and use taxes imposed
on food as if they were imposed under this Article. This applies to local taxes
on food imposed under Subchapter VIII of this Chapter and under Chapter 1096 of
the 1967 Session Laws.Food subject to tax under subsection (a) of this
section is subject to a local tax at the rate of one percent (1%)."
SECTION 5.6.(b) G.S. 105‑469(a) reads as rewritten:
"(a) The Secretary shall must collect
and administer a tax levied by a county pursuant to this Article. Notwithstanding
G.S. 105‑472, As directed by G.S. 105‑164.13B,
taxes levied by a county on food are administered as if they were levied by the
State under Article 5 of this Chapter. The the Secretary must, on a
monthly basis, distribute local taxes levied on food taxable at one percent
(1%) under G.S. 105‑164.13B to the taxing counties as follows:
(1) The Secretary must allocate one‑half of the
net proceeds on a per capita basis according to the most recent annual
population estimates certified to the Secretary by the State Budget Officer.
The Secretary must then adjust the amount allocated to each county as provided
in G.S. 105‑486(b). The Secretary must include one‑half of the
amount allocated under this subdivision in the distribution made under Article
40 of this Chapter and must include the remaining one‑half in the
distribution made under Article 42 of this Chapter.
(2) The Secretary must allocate the remaining net
proceeds proportionately to each taxing county based upon the amount of
sales tax on food collected in the taxing county in the 1997‑1998 fiscal
year under Article 39 of this Chapter or under Chapter 1096 of the 1967 Session
Laws relative to the total amount of sales tax on food collected in all taxing
counties in the 1997‑1998 fiscal year under Article 39 of this Chapter
and under Chapter 1096 of the 1967 Session Laws. The Secretary must include the
amount allocated under this subdivision in the distribution made under Article
39 of this Chapter.to each taxing county based on the county of
collection."
SECTION 5.6.(c) This section becomes effective July 1, 2015.
SECTION 5.7.(a) G.S. 105‑164.13(1a)b., (4c), and (4d) are repealed.
SECTION 5.7.(b) Article 5F of Chapter 105 of the General Statutes and G.S. 105‑164.13(5a) are repealed.
SECTION 5.7.(c) 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:
(1) Any of the following items sold to a farmer for use by the farmer in the planting, cultivating, harvesting, or curing of farm crops or in the production of dairy products, eggs, or animals. A "farmer" includes a dairy operator, a poultry farmer, an egg producer, a livestock farmer, a farmer of crops, and a farmer of an aquatic species, as defined in G.S. 106‑758.
a. Commercial fertilizer, lime, land plaster, plastic mulch, plant bed covers, potting soil, baler twine, and seeds.
b. Farm machinery, attachment and repair parts for
farm machinery, and lubricants applied to farm machinery. The term "machinery"
includes implements that have moving parts or are operated or drawn by an
animal. The term does not include implements operated wholly by hand ormachinery
that is capital equipment, other than a motor vehiclesvehicle
required to be registered under Chapter 20 of the General Statutes.
c. A horse or mule.
d. Fuel.
…
(4f) Sales of the following to a person who is engaged in the commercial logging business:
a. Logging machinery. – Logging machinery is
machinery Machinery that is used to harvest raw forest products for
transport to first market.market and is capital equipment.
b. Attachments and repair parts for logging
machinery.
c. Lubricants applied to logging machinery.
d. Fuel used to operate logging machinery.
…
(5b) Sales to a telephone company regularly engaged in providing telecommunications service to subscribers on a commercial basis of the following equipment that is capital equipment:
a. central Central office equipment,
switchboard equipment.
b. Switchboard equipment, private equipment.
c. Private branch exchange equipment,
terminal equipment.
d. Terminal equipment other than public
pay telephone terminal equipment, and parts and accessories attached to the equipment.
(5c) Sales to a radio or television company licensed
by the Federal Communications Commission of towers, towers and broadcasting
equipment, and parts and accessories attached to the equipment to a radio or
television company licensed by the Federal Communications Commission.equipment
that is capital equipment.
(5d) Sales to a cable service provider of
broadcasting equipment and parts and accessories attached to the equipment
to a cable service provider. that is capital equipment. For the
purposes of this subdivision, "broadcasting equipment" does not
include cable.
(5e) Sales to a major recycling facility of the following 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.
(5f) Sales of mill machinery that is capital equipment and is purchased by one of the following:
a. A manufacturer. A manufacturer does not include a delicatessen, café, cafeteria, restaurant, or another similar retailer that is principally engaged in the retail sale of foods prepared by it for consumption on or off its premises.
b. A contractor or subcontractor for use in the performance of a contract with a manufacturer.
c. A subcontractor for use in the performance of a contract with a general contractor that has a contract with a manufacturer.
(5g) Sales of capital equipment that is purchased by one of the following and would be considered mill machinery if purchased by a manufacturing industry or plant and used in manufacturing tangible personal property or in the research and development of tangible personal property manufactured by the industry or plant:
a. A research and development company in the physical, engineering, and life sciences that is included in industry group 54171 of NAICS for use by the company in the research and development of tangible personal property.
b. A software publishing company that is included in industry group 5112 of NAICS for use by the company in the research and development of tangible personal property.
c. An industrial machinery refurbishing company that is included in industry group 811310 of NAICS for use by the company in repairing or refurbishing tangible personal property.
(5h) Sales to a company located at a ports facility for waterborne commerce of capital equipment for use at the facility to unload or process bulk cargo to make the cargo suitable for delivery to and use by a manufacturer.
(5i) Datacenter machinery and equipment exempt from sales and use tax under G.S. 105‑164.13E.
…
(10) Sales of the following to commercial laundries or to pressing and dry cleaning establishments:
a. Articles or materials used for the identification of garments being laundered or dry cleaned, wrapping paper, bags, hangers, starch, soaps, detergents, cleaning fluids and other compounds or chemicals applied directly to the garments in the direct performance of the laundering or the pressing and cleaning service.
b. Laundry and dry‑cleaning machinery, parts
and accessories attached to the machinery, and lubricants applied to the
machinery.machinery that is capital equipment.
c. Fuel, other than electricity,Fuel
used in the direct performance of the laundering or the pressing and cleaning
service. Electricity qualifies for this exemption only if it is measured by
a separate meter or another separate device.
…."
SECTION 5.7.(d) 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:
…
(3) Products of forests and mines in their original or
unmanufactured state when such sales are made by the producer in the
capacity of producer.
…
(7) Sales of products of waters in their original or
unmanufactured state when such sales are made by the producer in the
capacity of producer. Fish and seafoods are likewise exempt when sold by the
fisherman in that capacity.
…."
SECTION 5.7.(e) Part 3 of Article 5 of Chapter 105 of the General Statutes is amended by adding a new section to read:
"§ 105‑164.13E. Exemption for datacenter.
(a) Exemption. – Datacenter equipment is exempt from sales and use tax if it is located and used at a datacenter that meets the requirements of subsection (b), (c), or (d) of this section. Electricity used by a datacenter is exempt from sales and use tax if it is used at a datacenter that meets the requirements of subsection (d) of this section.
(b) All Datacenters. – A datacenter qualifies under this subsection if it has received a written determination from the Secretary of Commerce that it meets all of the following requirements:
(1) The wage standard and health insurance requirements of G.S. 143B‑437.08A.
(2) The minimum investment level set in this subdivision for its location. The level of investment must consist of private funds that have been or will be invested in real and tangible property for the datacenter within five years of the date the datacenter's owner makes its first property investment in the datacenter.
a. For a datacenter in a development tier one area, the minimum investment level is one hundred fifty million dollars ($150,000,000).
b. For a datacenter located in a development tier two area or a development tier three area, the minimum investment level is two hundred twenty‑five million dollars ($225,000,000).
(c) Second Datacenter. – A datacenter qualifies under this subsection if it is owned by or under common control with the owner of a datacenter that qualified under subsection (b) of this section and it meets all of the following requirements:
(1) The Secretary of Commerce certifies that it meets the same requirements that apply to the first datacenter under subsection (b) of this section except that the minimum investment level is seventy‑five million dollars ($75,000,000) and must be made within five years after the first datacenter is placed in service.
(2) The two datacenters are linked through a fiber‑optic connection or a similar connection.
(3) The two datacenters are placed in service within five years of each other.
(d) Publishers and Portals. – A datacenter qualifies under this subsection if it meets all of the following requirements:
(1) It is to be used primarily by a business engaged in software publishing included in industry 511210 of NAICS or an Internet activity included in industry 519130 of NAICS.
(2) It is comprised of a structure or series of structures located or to be located on a single parcel of land or on contiguous parcels of land that are commonly owned or owned by affiliation with the operator of the datacenter.
(3) It is located or to be located in a county that was designated an enterprise tier one, two, or three area or a development tier one or two area.
(4) It has received a written determination from the Secretary of Commerce that at least two hundred fifty million dollars ($250,000,000) in private funds has been or will be invested in real property or datacenter property within five years after the commencement of construction of the datacenter.
(e) County Designation. – The enterprise or tier area of a county is determined as of the date the datacenter applies to the Secretary of Commerce for a written determination of whether it meets the requirements of those subsections. A change in a designation after certification by the Secretary of Commerce does not affect the eligibility of a datacenter for the exemption allowed under this section.
(f) Sunset. – The exemptions provided in subsections (b) and (c) of this section expire for sales occurring on or after July 1, 2015."
SECTION 5.7.(f) This section becomes effective January 1, 2014.
SECTION 5.8.(a) G.S. 105‑164.4(a), as amended by Section 5.4(b) of this act, reads as rewritten:
"(a) Tax Imposed. – A privilege tax is imposed on
a retailer at the following percentage rates of the retailer's net taxable
sales of tangible personal property, digital property, and services. The
general rate of tax is four and three quarters one‑half percent
(4.75%).(4.5%). The general rate applies to a taxable item unless
the item is subject to tax at the combined rate of tax or to a rate of tax that
differs from both the general rate and the combined rate. Subsection (b) of
this section lists the items that are subject to the general rate. An item
taxable under subsection (b) of this section is also subject to local sales and
use tax. Subsection (c) of this section lists the items that are subject to the
combined rate."
SECTION 5.8.(b) This section becomes effective September 1, 2014.
SECTION 5.9.(a) Article 5 of Chapter 105 of the General Statutes is amended by adding the following section to read:
"§ 105‑164.5B. Automatic rate decrease.
At the beginning of each fiscal year, the State Budget Officer must certify to the Secretary the amount of sales and use tax collections used to determine General Fund availability for the State budget for that fiscal year. At the end of each fiscal year, the Secretary must determine the extent to which sales and use tax collections for that year exceeded the amount certified by the State Budget Officer. The general rate of tax set in G.S. 105‑164.4 is decreased by one‑tenth of one percent (0.1%) if the amount of sales and use taxes collected in the fiscal year exceed the amount certified by the State Budget Officer by at least one hundred sixty million dollars ($160,000,000). A rate decrease required by this section becomes effective October 1 following the fiscal year in which the overcollections occurred. The Secretary must notify retailers of any rate decrease under this section."
SECTION 5.9.(b) This section becomes effective July 1, 2016.
SECTION 5.10.(a) G.S. 105‑467(a) reads as rewritten:
"(a) Sales Tax. – The sales tax that may be
imposed under this Article is limited to a tax at the rate of one percent (1%)
of the transactions listed in this subsection. The sales tax authorized by
this Article does not apply to sales that are taxable by the State under G.S. 105‑164.4
but are not specifically included in this subsection.following:
(1) A retailer's net taxable sales and gross
receipts that are The sales price of tangible personal property subject
to the general rate of sales tax imposed by the State under G.S. 105‑164.4(a)(1)
and (a)(4b).G.S. 105‑164.4.
(2) The gross receipts derived from the lease
or rental of tangible personal property when the lease or rental of the
property is subject to the general rate of sales tax imposed by the State under
G.S. 105‑164.4(a)(2).
(3) The gross receipts derived from the rental
of any room or other accommodations subject to the general rate of sales tax
imposed by the State under G.S. 105‑164.4(a)(3).
(4) The gross receipts derived from services
rendered by laundries, dry cleaners, and other businesses subject to the general
rate of sales tax imposed by the State under G.S. 105‑164.4(a)(4).
(5) The sales price of food that is not otherwise exempt from tax pursuant to G.S. 105‑164.13 but is exempt from the State sales and use tax pursuant to G.S. 105‑164.13B.
(5a) The sales price of a bundled transaction that includes food subject to tax under subdivision (5) of this subsection, if the price of the food exceeds ten percent (10%) of the price of the bundle. A retailer must determine the price of food in a bundled transaction in accordance with G.S. 105‑164.4D.
(5b) The sales price of bread, rolls, and buns that are sold at a bakery thrift store and are exempt from State tax under G.S.105‑164.13(27a).
(6) The sales price of prepaid telephone
calling service taxed as tangible personal property under G.S. 105‑164.4(a)(4d).
(7) The gross receipts derived from providing
satellite digital audio radio service subject to the general rate of tax under G.S. 105‑164.4(a)(6a)."
SECTION 5.10.(b) G.S. 105‑467(a), as amended by subsection (a) of this section, reads as rewritten:
"(a) Sales Tax. – The sales tax that may be imposed under this Article is limited to a tax at the rate of one percent (1%) of the following:
…
(5) The sales price of food that is not otherwise
exempt from tax pursuant to G.S. 105‑164.13 but is exempt from the
State sales and use tax pursuant to subject to tax under G.S. 105‑164.13B.
(5a) The sales price of a bundled transaction that
includes food subject to tax under subdivision (5) of this subsection, G.S. 105‑164.13B(b)
if the price of the food exceeds ten percent (10%) of the price of the
bundle. A retailer must determine the price of food in a bundled transaction in
accordance with G.S. 105‑164.4D.
…."
SECTION 5.10.(c) Subsection (a) of this section becomes effective January 1, 2014. Subsection (b) of this section becomes effective July 1, 2015. This subsection is effective when it becomes law.
SECTION 5.11.(a) Section 3 of Chapter 347 of the 1965 Session Laws reads as rewritten:
"Sec. 3. All property owned by Cape Hatteras Electric
Membership Corporation and used exclusively for the purpose of said
corporation shall be held in the same manner and subject to the same taxes and
assessments is exempt from property taxes to the same extent as
property owned by any county or municipality of the State so long as said the
property is owned by said Cape Hatteras Electric Membership
Corporation and is held and used by it solely for the furnishing of electric
energy to consumers on Hatteras Island and Ocracoke Island. Cape Hatteras
Electric Membership Corporation is subject to any other taxes to the same
extent as other electric membership corporations established under Chapter 117 of
the General Statutes."
SECTION 5.11.(b) This section becomes effective January 1, 2014.
PART VI. ELIMINATE ARCHAIC business PRIVILEGE TAXES
SECTION 6.1.(a) The following statutes are repealed:
G.S. 105-41
G.S. 105-83
G.S. 105-88
G.S. 105-102.3
G.S. 105-102.6
SECTION 6.1.(b) This section becomes effective January 1, 2014, and applies as follows:
(1) For taxes payable under G.S. 105-41, 105-88, or 105-102.3, the section applies to taxes imposed under those statutes for taxable years beginning on or after July 1, 2014.
(2) For taxes payable under G.S. 105-102.6, the section applies to taxes due on or after January 31, 2014.
(3) For taxes payable under G.S. 105-83, the section applies to obligation dealt in, bought, or discounted on or after January 1, 2014.
SECTION 6.2.(a) The title of Article 2C of Chapter 105 of the General Statutes reads as rewritten:
"Article 2C.
Local Alcoholic Beverage License And Licenses
and State Excise Taxes."
SECTION 6.2.(b) G.S. 105-113.69 reads as rewritten:
"§ 105‑113.69.
License tax; effect Effect of license.
The taxes imposed in Part 3 of this Article are license taxes
on the privilege of engaging in the activity authorized by the license. Licenses
issued under this Article authorize the licensee to engage in only those
activities that are authorized by the corresponding ABC permit. The activities
authorized by each retail ABC permit are described in Article 10 of Chapter 18B
of the General Statutes and the activities authorized by each commercial ABC
permit are described in Article 11 of that Chapter."
SECTION 6.2.(c) G.S. 105-113.70(a) reads as rewritten:
"§ 105‑113.70. Issuance, duration, transfer of license.
(a) Issuance, Qualifications. – Each person who
receives an ABC permit shall obtain the corresponding local license, if any,
under this Article. All local licenses are issued by the city or county where
the establishment for which the license is sought is located. The information
required to be provided and the qualifications for a local license are the same
as the information and qualifications required for the corresponding ABC
permit. Upon proper application and payment of the prescribed tax, application,
issuance of a local license is mandatory if the applicant holds the
corresponding ABC permit. No local license may be issued under this Article
until the applicant has received from the ABC Commission the applicable permit
for that activity, and no county license may be issued for an establishment
located in a city in that county until the applicant has received from the city
the applicable license for that activity."
SECTION 6.2.(d) G.S. 105-113.77 reads as rewritten:
"§ 105‑113.77. City beer and wine retail licenses.
(a) License and Tax. License. – A person
holding any of the following retail ABC permits for an establishment located in
a city shall must obtain from the city a city license for that
activity. The annual tax for each license is as stated.
ABC Permit Tax
for Corresponding License
On‑premises malt beverage...................................................................................................... $15.00
Off‑premises malt beverage......................................................................................................... 5.00
On‑premises unfortified wine,
on‑premises fortified wine, or both........................................................................................... 15.00
Off‑premises unfortified wine,
off‑premises fortified wine, or both........................................................................................... 10.00
(b) Tax on Additional License. – The tax
stated in subsection (a) is the tax for the first license issued to a person.
The tax for each additional license of the same type issued to that person for
the same year is one hundred ten percent (110%) of the base license tax, that
increase to apply progressively for each additional license."
SECTION 6.2.(e) G.S. 105-113.78 reads as rewritten:
"§ 105‑113.78. County beer and wine retail licenses.
A person holding any of the following retail ABC permits for
an establishment located in a county shall must obtain from the
county a county license for that activity. The annual tax for each license
is as stated.
ABC Permit Tax
for Corresponding License
On‑premises malt beverage...................................................................................................... $25.00
Off‑premises malt beverage......................................................................................................... 5.00
On‑premises unfortified wine,
on‑premises fortified wine, or both................................................................................. 25.00
Off‑premises unfortified wine,
off‑premises fortified
wine, or both................................................................................. 25.00"
SECTION 6.2.(f) G.S. 105-113.79 reads as rewritten:
"§ 105‑113.79. City wholesaler license.
A city may require city malt beverage and wine wholesaler
licenses for businesses located inside the city, but may not require a license
for a business located outside the city, regardless whether that business sells
or delivers malt beverages or wine inside the city. The city may charge an
annual tax of not more than thirty‑seven dollars and fifty cents ($37.50)
for a city malt beverage wholesaler or a city wine wholesaler license."
SECTION 6.2(g) This section becomes effective January 1, 2014, and applies to taxes for periods beginning on or after May 1, 2014.
SECTION 6.3.(a) G.S. 153A‑152 reads as rewritten:
"§ 153A‑152.
Privilege No general authority for privilege license taxes.
(a) Authority. – A county may levy privilege
license taxes on trades, occupations, professions, businesses, and franchises
to the extent authorized by Article 2 of Chapter 105 of the General Statutes
and any other acts of the General Assembly. A county may levy privilege license
taxes to the extent formerly authorized by the following sections of Article 2
of Chapter 105 of the General Statutes before they were repealed:
G.S. 105‑50 Pawnbrokers.
G.S. 105‑53 Peddlers,
itinerant merchants, and specialty market operators.
G.S. 105‑55 Installing
elevators and automatic sprinkler systems.
G.S. 105‑58 Fortune tellers, palmists, etc.
G.S. 105‑65 Music
machines.
G.S. 105‑66.1 Electronic
video games.
G.S. 105‑80 Firearms
dealers and dealers in other weapons.
G.S. 105‑89 Automobiles,
wholesale supply dealers and service stations.
G.S. 105‑89.1 Motorcycle
dealers.
G.S. 105‑90 Emigrant
and employment agents.
G.S. 105‑102.5 General
business license.
(b) Telecommunications Restriction. – A
county may not impose a license, franchise, or privilege tax on a company taxed
under G.S. 105‑164.4(a) (4c).A county may not levy a
privilege license tax on a trade, occupation, profession, business, or
franchise carried on within the county unless a statute or an act of the General
Assembly authorizes the county to do so."
SECTION 6.3.(b) G.S. 160A‑211 reads as rewritten:
"§ 160A‑211.
Privilege No general authority for privilege license taxes.
(a) Authority. – Except as otherwise
provided by law, a city shall have power to levy privilege license taxes on all
trades, occupations, professions, businesses, and franchises carried on within
the city. A city may levy privilege license taxes on the businesses that were
formerly taxed by the State under the following sections of Article 2 of
Chapter 105 of the General Statutes only to the extent the sections authorized
cities to tax the businesses before the sections were repealed:
G.S. 105‑36 Amusements
– Manufacturing, selling, leasing, or distributing moving picture films.
G.S. 105‑36.1 Amusements
– Outdoor theatres.
G.S. 105‑37 Amusements
– Moving pictures – Admission.
G.S. 105‑42 Private
detectives and investigators.
G.S. 105‑45 Collecting
agencies.
G.S. 105‑46 Undertakers
and retail dealers in coffins.
G.S. 105‑50 Pawnbrokers.
G.S. 105‑51.1 Alarm
systems.
G.S. 105‑53 Peddlers,
itinerant merchants, and specialty market operators.
G.S. 105‑54 Contractors
and construction companies.
G.S. 105‑55 Installing
elevators and automatic sprinkler systems.
G.S. 105‑61 Hotels,
motels, tourist courts and tourist homes.
G.S. 105‑62 Restaurants.
G.S. 105‑65 Music
machines.
G.S. 105‑65.1 Merchandising
dispensers and weighing machines.
G.S. 105‑66.1 Electronic
video games.
G.S. 105‑74 Pressing
clubs, dry cleaning plants, and hat blockers.
G.S. 105‑77 Tobacco
warehouses.
G.S. 105‑80 Firearms
dealers and dealers in other weapons.
G.S. 105‑85 Laundries.
G.S. 105‑86 Outdoor
advertising.
G.S. 105‑89 Automobiles,
wholesale supply dealers, and service stations.
G.S. 105‑89.1 Motorcycle
dealers.
G.S. 105‑90 Emigrant
and employment agents.
G.S. 105‑91 Plumbers,
heating contractors, and electricians.
G.S. 105‑97 Manufacturers
of ice cream.
G.S. 105‑98 Branch
or chain stores.
G.S. 105‑99 Wholesale
distributors of motor fuels.
G.S. 105‑102.1 Certain
cooperative associations.
G.S. 105‑102.5 General
business license.
(b) Barbershop and Salon Restriction. – A
privilege license tax levied by a city on a barbershop or a beauty salon may
not exceed two dollars and fifty cents ($2.50) for each barber, manicurist,
cosmetologist, beautician, or other operator employed in the barbershop or
beauty salon.
(c) Prohibition. – A city may not impose a
license, franchise, or privilege tax on a person engaged in any of the
businesses listed in this subsection. These businesses are subject to a State
tax for which the city receives a share of the tax revenue.
(1) Supplying piped natural gas taxed under
Article 5E of Chapter 105 of the General Statutes.
(2) Providing telecommunications service
taxed under G.S. 105‑164.4(a)(4c).
(3) Providing video programming taxed under G.S. 105‑164.4(a)(6).
(d) Repealed by Session Laws 2006‑151,
s. 12, effective January 1, 2007.A city may not levy a privilege license
tax on a trade, occupation, profession, business, or franchise carried on
within the city unless a statute or an act of the General Assembly authorizes
the city to do so."
SECTION 6.3.(c) This section becomes effective July 1, 2014, and applies to taxes imposed for fiscal years beginning on or after that date.
SECTION 6.4.(a) G.S. 105‑113.21 reads as rewritten:
"§ 105‑113.21. Discount; refund.
…
(a1) Discount. – A distributor who files a
timely report under G.S. 105‑113.18 and who sends a timely payment
may deduct from the amount due with the report a discount of two percent (2%).
This discount covers expenses incurred in preparing the records and reports
required by this Part, and the expense of furnishing a bond.
(b) Refund. – A distributor in possession of packages
of stale or otherwise unsalable cigarettes upon which the tax has been paid may
return the cigarettes to the manufacturer as provided in this subsection and
apply to the Secretary for refund of the tax. The application shall must
be in the form prescribed by the Secretary and shall must be
accompanied by an affidavit from the manufacturer stating the number of
cigarettes returned to the manufacturer by the applicant. The Secretary shall
must refund the tax paid, less the discount allowed, paid on
the unsalable cigarettes. The distributor must return the cigarettes to the
manufacturer of the cigarettes or to the affiliated manufacturer who is
contracted by the manufacturer of the cigarettes to serve as the manufacturer's
agent for the purposes of validating quantities and disposing of unsalable
cigarettes."
SECTION 6.4.(b) G.S. 105‑113.39 reads as rewritten:
"§ 105‑113.39. Discount; refund.
(a) Discount. – A wholesale dealer or a
retail dealer who is primarily liable under G.S. 105‑113.35(b) for
the excise taxes imposed by this Part, who files a timely report under G.S. 105‑113.37,
and who sends a timely payment may deduct from the amount due with the report a
discount of two percent (2%). This discount covers expenses incurred in
preparing the records and reports required by this Part and the expense of
furnishing a bond.
(b) Refund. – A wholesale dealer or retail dealer who
is primarily liable under G.S. 105‑113.35(b) for the excise taxes
imposed by this Part and is in possession of stale or otherwise unsalable
tobacco products upon which the tax has been paid may return the tobacco
products to the manufacturer and apply to the Secretary for refund of the tax.
The application shall must be in the form prescribed by the
Secretary and shall must be accompanied by an affidavit from the
manufacturer listing the tobacco products returned to the manufacturer by the
applicant. The Secretary shall must refund the tax paid, less
the discount allowed, paid on the listed products."
SECTION 6.4.(c) G.S. 105‑113.85 is repealed.
SECTION 6.4.(d) This section becomes effective July 1, 2014, and applies to returns filed for periods beginning on or after that date.
PART VII. REPLACE LOCAL DISTRIBUTIONS WITH EXPANDED LOCAL SALES TAX BASE
SECTION 7.1.(a) G.S. 105‑113.82 is repealed.
SECTION 7.1.(b) G.S. 108A‑93 reads as rewritten:
"§ 108A‑93. Withholding of State moneys from counties failing to pay public assistance costs.
The Director of the Budget may withhold from any county that
does not pay its full share of public assistance costs to the State and has not
obtained a loan for repayment under G.S. 108A‑89, any State moneys
appropriated from the General Fund for public assistance and related
administrative costs, or may direct the Secretary of Revenue and State
Controller to withhold any tax owed to a county under G.S. 105‑113.82,
Subchapter VIII of Chapter 105 of the General Statutes, Statutes or
Chapter 1096 of the Session Laws of 1967. The Director of the Budget shall must
notify the chair of the board of county commissioners of the proposed
action prior to the withholding of funds."
SECTION 7.1.(c) This section becomes effective July 1, 2014.
SECTION 7.2.(a) G.S. 105‑486(b) is repealed.
SECTION 7.2.(b) This section becomes effective January 1, 2014.
SECTION 7.3.(a) Notwithstanding G.S. 105‑523, the amount of a county's hold harmless payment for the 2013‑2014 fiscal year is one‑half of the amount calculated under that statute.
SECTION 7.3.(b) G.S. 105‑523 is repealed.
SECTION 7.3.(c) Subsection (a) of this section becomes effective July 1, 2013. Subsection (b) of this section becomes effective July 1, 2014. This subsection is effective when it becomes law.
SECTION 7.4.(a) G.S. 115C‑546.1 reads as rewritten:
"§ 115C‑546.1. Creation of Fund; administration.
(a) There is created the Public School Building Capital Fund. The Fund shall be used to assist county governments in meeting their public school building capital needs and their equipment needs under their local school technology plans.
(b) Each calendar quarter, the Secretary of
Revenue shall remit to the State Treasurer for credit to the Public School
Building Capital Fund an amount equal to the applicable fraction provided in
the table below of the net collections received during the previous quarter by
the Department of Revenue under G.S. 105‑130.3. All funds deposited
in the Public School Building Capital Fund shall be invested as provided in G.S. 147‑69.2
and G.S. 147‑69.3.
Period Fraction
10/1/97 to 9/30/98 One‑fifteenth
(1/15)
10/1/98 to 9/30/99 Two
twenty‑ninths (2/29)
10/1/99 to 9/30/00 One‑fourteenth
(1/14)
After 9/30/00 Five
sixty‑ninths (5/69)
(c) The Fund shall be administered by the Department of Public Instruction."
SECTION 7.4.(b) G.S. 115C‑546.2(a) is repealed.
SECTION 7.4.(c) This section becomes effective April 1, 2014, and applies to distributions for collections for quarters beginning on or after that date.
PART VIII. TRANSITIONAL PROVISIONS
SECTION 8.(a) G.S. 105‑237.1(a) reads as rewritten:
"(a) Authority. – The Secretary may compromise a taxpayer's liability for a tax that is collectible under G.S. 105‑241.22 when the Secretary determines that the compromise is in the best interest of the State and makes one or more of the following findings:
…
(6) The taxpayer is a retailer or a consumer under Article 5 of this Chapter, the assessment is for sales or use tax the retailer failed to collect or the consumer failed to pay on an item that first became taxable under that Article on or after January 1, 2014, and the retailer or consumer made a good faith effort to comply with the sales and use tax laws."
SECTION 8.(b) The Revenue Laws Study Committee is directed to study the fiscal impact of the changes proposed by this act and to recommend to the General Assembly any adjustments needed. The Committee is specifically directed to address the following:
(1) The application of the business privilege tax on related business entities and to recommend to the General Assembly any changes needed to prevent vertical or horizontal pyramiding of the tax.
(2) The amount of additional revenue received by counties and cities as a result of the expansion of the sales tax base in this act and the amount by which local revenue is reduced by the repeal of local privilege license taxes and other taxes.
(3) The reasons for the remaining distributions of State tax revenue to local governments and ways to eliminate as many of these distributions as possible.
SECTION 8.(c) This act does not affect the rights or liabilities of the State, a taxpayer, or another person arising under a statute amended or repealed by this act 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 8.(d) This section is effective when it becomes law. Subsection (a) of this section expires January 1, 2024.
PART IX. PRIVILEGE TAX CONFORMING CHANGES
SECTION 9.(a) G.S. 93‑12(12) and G.S. 105‑259(b)(4) are repealed.
SECTION 9.(b) G.S. 53‑165 reads as rewritten:
"§ 53‑165. Definitions.
The following definitions apply in this Article:
(a)(1) "Amount of the loan" shall
mean the Amount of the loan. – The aggregate of the cash advance and
the charges authorized by G.S. 53‑173 and G.S. 53‑176.
(b)(2) "Borrower" shall mean any Borrower.
– A person who borrows money from any licensee or who pays or obligates himself
to pay any money from, pays or is obligated to pay money to, or
otherwise furnishes any valuable consideration to any licensee for any act of
the licensee as a licensee.
(c)(3) "Cash advance" shall mean
the Cash advance. – The amount of cash or its equivalent that the
a borrower actually receives or is paid out at his discretion or
on his behalf.the discretion of the borrower or on behalf of the
borrower.
(d)(4) "Commission" shall mean
the Commission. – The State Banking Commission.
(e)(5) "Commissioner" shall mean
the Commissioner. – The Commissioner of Banks.
(f)(6) "Deputy commissioner"
shall mean the Deputy commissioner. – The deputy commissioner of
banks.
(7) Installment paper dealer. – A person who buys or discounts notes or other evidences of debt secured, at the time the debt is incurred, by personal property located in this State.
(g)(8) "License" shall mean the License.
– The certificate issued by the Commissioner under the authority of this
Article to conduct a consumer finance business.
(h)(9) "Licensee" shall mean a Licensee.
– A person to whom one or more licenses have been issued.
(i)(10) "Loanable assets" shall
mean cash or bank deposits or installment loans made as a licensee pursuant to
this Article or installment loans made as a licensee pursuant to the Article
which this Article supersedes or such other loans payable on an installment
basis as the Commissioner of Banks may approve, or any combination of two or
more thereof.Loanable assets. – Cash, bank deposits, installment loans,
or any combination of these.
(j)(11) "Person" shall include any
person, Person. – An individual, a firm, a partnership, association
or corporation. an association, a limited liability company, a
corporation, or another group acting as a unit."
SECTION 9.(c) G.S. 53‑172(a) reads as rewritten:
"(a) No licensee shall conduct the business of making loans under this Article within any office, suite, room, or place of business in which any other business is solicited or transacted. The business of making loans includes acting as an installment paper dealer and collecting a loan made by a government regulated lender.
Installment paper dealers as defined in G.S. 105‑83,
and the collection by a licensee of loans legally made in North Carolina, or
another state by another government regulated lender or lending agency, shall
not be considered as being any other business within the meaning of this
section."
SECTION 9.(d) G.S. 53‑191 reads as rewritten:
"§ 53‑191. Businesses exempted.
Nothing in this This Article shall be
construed to does not apply to any person, firm or corporation person
doing business under the authority of any law of this State or of the
United States relating to banks, trust companies, savings and loan
associations, cooperative credit unions, agricultural credit corporations or
associations organized under the laws of North Carolina, production credit
associations organized under the act of Congress known as the federal
Farm Credit Act of 1933, pawnbrokers lending or advancing money on specific
articles of personal property, industrial banks, the business of negotiating
businesses that negotiate or solicit loans on real estate as defined
in G.S. 105‑41, agent for another for compensation, nor
to or installment paper dealers as defined in G.S. 105‑83
other than persons, firms and corporations other than persons engaged
in the business of accepting fees for endorsing or otherwise securing loans or
contracts for the repayment of loans."
SECTION 9.(e) G.S. 95‑47.2(d)(3)c. reads as rewritten:
"(d) Upon the receipt of an application for a license the Commissioner:
…
(3) Upon completion of the investigation, or 60 days after the application was received, whichever is later, but in no case more than 75 days after the application was received, shall determine whether or not a license should be issued. The license shall be denied for any of the following reasons:
…
c. If the employment agency will be operated on the
same premises as a loan agency (as defined in G.S. 105‑88) or
collection agency (as defined in G.S. 58‑70‑15).any of
the following:
1. A business that makes loans and takes as security for repayment of the loans an assignment of wages or any other type of security.
2. A check cashing business regulated under Article 22 of Chapter 53 of the General Statutes.
3. A pawnbroker business regulated under Chapter 91A of the General Statutes.
4. A collection agency, as defined in G.S. 58‑70‑15."
SECTION 9.(f) G.S. 105‑130.6A(a)(2) reads as rewritten:
"(a) Definitions. – The provisions of G.S. 105‑130.6 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:
…
(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.engaged
in the business of banking.
…."
SECTION 9.(g) This section becomes effective January 1, 2014.
PART X. franchise and CORPORATE INCOME TAX CONFORMING CHANGES
SECTION 10.(a) G.S. 105‑129.27(b) reads as rewritten:
"(b) Taxes Credited. – The credit provided in this
section is allowed against the franchise privilege tax levied in
Article 3 of this Chapter and the income tax levied in Part 1 of Article 4 of
this Chapter. Any other nonrefundable credits allowed the owner are subtracted
before the credit allowed by this section."
SECTION 10.(b) G.S. 105‑129.41(a1) reads as rewritten:
"(a1) Tax Election. – The credit allowed in this
section is allowed against the franchise privilege tax levied in
Article 3 of this Chapter, the income taxes levied in Article 4 of this
Chapter, or the gross premiums tax levied in Article 8B of this Chapter. The
taxpayer must elect the tax against which the credit will be claimed when
filing the return on which the first installment of the credit is claimed. This
election is binding. Any carryforwards of the credit must be claimed against
the same tax."
SECTION 10.(c) G.S. 105‑129.50 reads as rewritten:
"§ 105‑129.50. Definitions.
The definitions in section 41 of the Code apply in this Article. In addition, the following definitions apply in this Article:
(1) Development tier one area. – Defined in G.S. 143B‑437.08.
(1a) Establishment. – Defined in 29 C.F.R. § 1904.46, as it existed on January 1, 2002.
(2) Full‑time job. – Defined in G.S. 105‑129.81.
(3) Reserved.
(4) North Carolina university research expenses. – Any amount the taxpayer paid or incurred to a research university for qualified research performed in this State or basic research performed in this State.
(4a) Participating community college. – A community college, as defined in G.S. 115D‑2, that offers an associate in applied science degree in simulation and game development.
(5) Period of measurement. – Defined in the Small Business Size Regulations of the federal Small Business Administration.
(6) Qualified North Carolina research expenses. – Qualified research expenses, other than North Carolina university research expenses, for research performed in this State.
(7) Receipts. – Defined in the Small Business Size Regulations of the federal Small Business Administration.
(8) Related person. – Defined in G.S. 105‑163.010.A
person described in one of the relationships set forth in section 267(b) or
707(b) of the Code.
(9) Research university. – An institution of higher education that meets one or both of the following conditions:
a. It is classified as one of the following in the most recent edition of "A Classification of Institutions of Higher Education", the official report of The Carnegie Foundation for the Advancement of Teaching:
1. Doctoral/Research Universities, Extensive or Intensive.
2. Masters Colleges and Universities, I or II.
3. Baccalaureate Colleges, Liberal Arts or General.
b. It is a constituent institution of The University of North Carolina.
(10) Small business. – A business whose annual receipts, combined with the annual receipts of all related persons, for the applicable period of measurement did not exceed one million dollars ($1,000,000)."
SECTION 10.(d) G.S. 105‑129.51 reads as rewritten:
"§ 105‑129.51.
Administration; Additional eligibility requirements and sunset.
(a) Requirements. – A taxpayer is eligible for
the credit allowed in this Article if it satisfies the requirements of G.S. 105‑129.83(c),
(d), (e), and (f) relating to wage standard, health insurance, environmental
impact, and safety and health programs, respectively.following
standards:
(1) Wage. – For research performed at an establishment in a development tier two or development tier three area, the taxpayer must meet the general wage standard or, if applicable, the zone wage standard published by the Secretary of Commerce under G.S. 143B‑437.010A. For research performed at an establishment in a development tier one area, no wage standard applies.
(2) Health insurance. – The health insurance standard set in G.S. 143B‑437.010A applies to all the jobs at an establishment for which a credit or a carryforward of a credit is claimed under this Article. If a taxpayer qualifies for a credit under this Article and then fails to meet the health insurance standard during a taxable year, the credit expires, and the taxpayer may not take any remaining carryforwards of the credit.
(3) Environmental impact. – The environmental standard set in G.S. 143B‑437.010A applies to a taxpayer who claims a credit under this Article. A taxpayer must meet the standard at the time the taxpayer claims the credit.
(4) Employee safety and health. – The employee safety and health standard set in G.S. 143B‑437.010A applies to a taxpayer who claims a credit under this Article. A taxpayer must meet the standard at the time the taxpayer claims the credit.
(b) Sunset. – This Article is repealed for taxable years beginning on or after January 1, 2014.
(c) Repealed by Session Laws 2004‑124, s. 32D.4, effective for taxable years beginning on or after January 1, 2006."
SECTION 10.(e) G.S. 105‑129.96(b) reads as rewritten:
"(b) Taxes Credited. – The credit provided in this
section is allowed against the franchise privilege tax levied in
Article 3 of this Chapter or the income taxes levied in Article 4 of this
Chapter. The taxpayer must elect the tax against which a credit will be claimed
when filing the return on which the first installment of the credit is claimed.
This election is binding. The credit may not exceed fifty percent (50%) of the
tax against which it is applied. Any unused portion of a credit may be carried
forward for the succeeding 10 years. Any carryforwards of a credit must be
claimed against the same tax."
SECTION 10.(f) G.S. 105‑130.6A(a) reads as rewritten:
"(a) Definitions. – The provisions of G.S. 105‑130.6 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 engaged in the banking business.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 engaged in the business of
producing electric power.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.G.S. 105‑114.2."
SECTION 10.(g) G.S. 105‑130.6A(h) reads as rewritten:
"(h) Limitation on Credits. – The credits provided
in this section are allowed against the tax levied in this Part and the franchise
privilege tax levied in Article 3 of this Chapter. A taxpayer may
claim a credit against only one of the taxes against which it is allowed. Each
taxpayer must elect the tax against which the credit will be taken when filing
the return on which the first installment of the credit is claimed. This
election is binding. All installments and carryforwards of the credit must be
taken against the same tax.
In order for a member of an affiliated group to take a credit, each member of the affiliated group that is required to file a return under this Part or under Article 3 of this Chapter must attach a schedule to its return that shows for every member of the group the amount of the credit taken by it, the tax against which it is taken, and the amount of the resulting tax. In addition, each member must provide any other documentation required by the Secretary.
A credit allowed in this section may not exceed the amount of tax against which it is taken for the taxable year reduced by the sum of all credits allowable, except tax payments made by or on behalf of the taxpayer. Any unused portion of the credit may be carried forward to succeeding taxable years."
SECTION 10.(h) G.S. 105‑130.9(4) is repealed.
SECTION 10.(i) G.S. 105‑230 reads as rewritten:
"§ 105‑230.
Charter suspended for failure to report.Suspension of business entity's
right to do business for noncompliance.
(a) Suspension. – If a corporation or a
limited liability company fails to file any Failure of a business
entity, as defined in G.S. 105‑114.2, to file a report or return
or to pay any a tax or fee required by this Subchapter for 90
days after it is due, the Secretary shall inform the Secretary of State of
this failure. The Secretary of State shall due is grounds to suspend
the business entity's articles of incorporation, articles of
organization, or certificate of authority, as appropriate, of the
corporation or limited liability company. The Secretary of State shall
immediately notify by mail every domestic or foreign corporation or limited
liability company so suspended of its suspension. or certificate of
registration, as appropriate. The Secretary must notify the Secretary of State
when a business entity's authority to transact business is subject to
suspension. The Secretary of State must then immediately suspend the business
entity's articles of incorporation or other authority to transact business and
must notify the business entity by mail of the suspension. The powers,
privileges, and franchises conferred upon the corporation or limited
liability company by the articles of incorporation, the articles of
organization, or the certificate of authority business entity by its
articles of incorporation or other authority to transact business terminate
upon suspension.
(b) Effect. – Any act performed or attempted to
be performed during the period of suspension the business entity's
authority to transact business is suspended under this section is invalid
and of no effect, unless the Secretary of State reinstates the corporation
or limited liability company business entity's authority pursuant to
G.S. 105‑232."
SECTION 10.(j) G.S. 105‑232 reads as rewritten:
"§ 105‑232.
Rights restored; receivership and liquidation.Procedure for
reinstatement after suspension of business entity's authority to do business
for noncompliance.
(a) Any corporation or limited liability
company whose articles of incorporation, articles of organization, or
certificate of authority to do business in this State has been suspended by the
Secretary of State under G.S. 105‑230, that complies with all the
requirements of this Subchapter and pays all State taxes, fees, or penalties
due from it (which total amount due may be computed, for years prior and
subsequent to the suspension, in the same manner as if the suspension had not
taken place), and pays to the Secretary of Revenue a fee of twenty‑five
dollars ($25.00) to cover the cost of reinstatement, is entitled to exercise
again its rights, privileges, and franchises in this State. The Secretary of
Revenue shall notify the Secretary of State of this compliance and the
Secretary of State shall reinstate the corporation or limited liability company
by appropriate entry upon the records of the office of the Secretary of State.
Upon entry of reinstatement, it relates back to and takes effect as of the date
of the suspension by the Secretary of State and the corporation or limited
liability company resumes carrying on its business as if the suspension had
never occurred, subject to the rights of any person who reasonably relied, to
that person's prejudice, upon the suspension. The Secretary of State shall
immediately notify by mail the corporation or limited liability company of the
reinstatement.The suspension under G.S. 105‑230 of the
authority of a business entity to transact business terminates when the business
entity resolves the noncompliance that resulted in the suspension and pays a
reinstatement fee of fifty dollars ($50.00) to the Secretary of Revenue. The
Secretary of Revenue must notify the Secretary of State when a business entity
whose authority is suspended resolves the noncompliance. The Secretary of State
must then immediately reinstate the business entity's authority and must notify
the business entity by mail of the reinstatement. Reinstatement of a business
entity's authority to do business relates back to and takes effect as of the
date of the suspension, subject to the rights of a person who reasonably relied
to that person's prejudice on the suspension.
(b) When the articles of incorporation,
articles of organization, or certificate of authority to do business in this
State has been suspended by the Secretary of State under G.S. 105‑230,
and the corporation or limited liability company has ceased to operate as a
going concern, if there remains property held in the name of the corporation or
limited liability company or undisposed of at the time of the suspension, or
there remain future interests that may accrue to the corporation, the limited
liability company, or its successors, members, or stockholders, any interested
party may apply to the superior court for the appointment of a receiver.
Application for the receiver may be made in a civil action to which all
stockholders, members, or their representatives or next of kin shall be made
parties. Stockholders or members whose whereabouts are unknown, unknown
stockholders or members, unknown heirs and next of kin of deceased
stockholders, members, creditors, dealers, and other interested persons may be
served by publication. A guardian ad litem may be appointed for any
stockholders, members, or their representatives who are infants or incompetent.
The receiver shall enter into a bond if the court requires one and shall give
notice to creditors by publication or otherwise as the court may prescribe. Any
creditor who fails to file a claim with the receiver within the time set shall
be barred of the right to participate in the distribution of the assets. The
receiver may (i) sell the property interests of the corporation or limited
liability company upon such terms and in such manner as the court may order,
(ii) apply the proceeds to the payment of any debts of the corporation or
limited liability company, and (iii) distribute the remainder among the
stockholders, the members, or their representatives in proportion to their
interests in the property interests. Shares due to any stockholder or member
who is unknown or whose whereabouts are unknown shall be paid into the office
of the clerk of the superior court, to be disbursed according to law. In the event
the records of the corporation or limited liability company are lost or do not
reflect the owners of the property interests, the court shall determine the
owners from the best evidence available, and the receiver shall be protected in
acting in accordance with the court's finding. This proceeding is authorized
for the sole purpose of providing a procedure for disposing of the assets of
the corporation or limited liability company by the payment of its debts and by
the transfer to its stockholders, its members, or their representatives their
proportionate shares of its assets."
SECTION 10.(k) G.S. 105‑259(b)(24), (37), and (38) are repealed.
SECTION 10.(l) G.S. 105‑269.13 is repealed.
SECTION 10.(m) Article 10 of Chapter 143B of the General Statutes is amended by adding a new section to read:
"§ 143B‑437.08A. Wage, health insurance, and other standards applicable to economic development incentives.
(a) Wage. – The Department must annually determine the average weekly wage for a calendar year for all insured private employers in each county and in the State and must publish the following wage standards applicable to economic development incentives:
(1) General wage standard. – A job meets the general wage standard if it pays an average weekly wage that is at least equal to the lesser of one hundred ten percent (110%) of the average wage for all insured private employers in the State and ninety percent (90%) of the average wage for all insured private employers in the county.
(2) Zone wage standard. – A job that is located within an urban progress zone or an agrarian growth zone in a development tier two or tier three area satisfies the wage standard if it pays an average weekly wage that is at least equal to ninety percent (90%) of the lesser of the average wage for all insured private employers in the State and the average wage for all insured private employers in the county.
(3) Calculation. – In determining whether an employer meets a wage standard, the employer may include only full‑time jobs and must include any jobs that were filled for at least 1,600 hours during the calendar year even if the jobs are not filled at the time the employer applies for or claims an economic incentive benefit. An employer whose taxable year is not a calendar year must use the wage standard for the calendar year in which the taxable year begins. A full‑time job is a position that requires at least 1,600 hours of work per year and is intended to be held by one employee during the entire year. A full‑time employee is an employee who holds a full‑time job.
(b) Health Insurance. – An employer meets the health insurance standard if the employer does all of the following:
(1) Provides health insurance for all of its full‑time jobs. A full‑time job is a position that requires at least 1,600 hours of work per year and is intended to be held by one employee during the entire year.
(2) Pays at least fifty percent (50%) of the premiums for health care coverage that equals or exceeds the minimum provisions of the basic health care plan of coverage recommended by the Small Employer Carrier Committee pursuant to G.S. 58‑50‑125.
(c) Environmental Impact. – A person meets the environmental standard if the person has no pending administrative, civil, or criminal enforcement action based on alleged significant violations of any program implemented by an agency of the Department of Environment and Natural Resources and has had no final determination of responsibility for any significant administrative, civil, or criminal violation of any program implemented by an agency of the Department of Environment and Natural Resources within the last five years. A significant violation is a violation or alleged violation that does not satisfy any of the conditions of G.S. 143‑215.6B(d). The Secretary of Environment and Natural Resources must notify the Department of Commerce and the Department of Revenue annually of every person that currently has any of these pending actions and every person that has had any of these final determinations within the last five years.
(d) Employee Safety and Health. – An employer meets the employee safety and health standard if the employer has no citations under the Occupational Safety and Health Act that have become a final order within the past three years for willful serious violations or for failing to abate serious violations. As used in this subsection, the term "serious violation" has the same meaning as in G.S. 95‑127. The Commissioner of Labor must notify the Department of Commerce and the Department of Revenue annually of every person that has had these citations become final orders within the past three years."
SECTION 10.(n) G.S. 143B‑437.01(a) and (a1) read as rewritten:
"(a) Creation and Purpose of Fund. – There is created in the Department of Commerce the Industrial Development Fund to provide funds to assist the local government units of the most economically distressed counties in the State in creating and retaining jobs in certain industries. The Department of Commerce shall adopt rules providing for the administration of the program. Those rules shall include the following provisions, which shall apply to each grant from the fund:
…
(6) The funds shall not be used for any
nonmanufacturing project that does not meet the general wage standard
set out in G.S. 105‑129.4(b).G.S. 143B‑437.08A.
(a1) Definitions. – The following definitions apply in this section:
(1) Air courier services. – Defined in G.S. 105‑129.81.The
furnishing of air delivery of individually addressed letters and packages for
compensation, in interstate commerce, except by the United States Postal
Service.
(2) Repealed by Session Laws 2006‑252, s. 2.4, effective January 1, 2007.
(2a) Company headquarters. – Defined in G.S. 105‑129.81.A
corporate, subsidiary, or regional managing office, as defined by NAICS in
United States industry 551114, that is responsible for strategic or
organizational planning and decision making for the business on an
international, national, or multistate regional basis.
…
(6) Information technology and services. – Defined
in G.S. 105‑129.81.An industry in one of the following, as
defined by NAICS:
a. Data processing industry group 518.
b. Software publishers industry group 5112.
c. Computer systems design and related services industry group 5415.
d. An Internet activity included in industry group 519130.
…
(8) Manufacturing. – Defined in G.S. 105‑129.81.An
industry in manufacturing sectors 31 through 33, as defined by NAICS, but not
including quick printing or retail bakeries.
(9) NAICS. – Defined in G.S. 105‑228.90.
(10) Warehousing. – Defined in G.S. 105‑129.81.An
industry in warehousing and storage subsector 493 as defined by NAICS.
(11) Wholesale trade. – Defined in G.S. 105‑129.81.An
industry in wholesale trade sector 42 as defined by NAICS."
SECTION 10.(o) This section becomes effective January 1, 2014.
PART XI. INDIVIDUAL INCOME TAX CONFORMING CHANGES
SECTION 11.(a) G.S. 105‑131.2 reads as rewritten:
"§ 105‑131.2. Adjustment and characterization of income.
(a) Adjustment. – Each shareholder's pro rata share of
an S Corporation's income is subject to the adjustments provided in G.S. 105‑134.6.G.S. 105‑153.5.
(b) Repealed by Session Laws 1989, c. 728, s. 1.35.
(c) Characterization of Income. – S Corporation items of income, loss, deduction, and credit taken into account by a shareholder pursuant to G.S. 105‑131.1(b) are characterized as though received or incurred by the S Corporation and not its shareholder."
SECTION 11.(b) G.S. 105‑131.5 reads as rewritten:
"§ 105‑131.5. Part‑year resident shareholder.
If a shareholder of an S Corporation is both a resident and
nonresident of this State during any taxable period, the shareholder's pro rata
share of the S Corporation's income attributable to the State and income not
attributable to the State for the taxable period shall be further prorated
between the shareholder's periods of residence and nonresidence, in accordance
with the number of days in each period, as provided in G.S. 105‑134.5.G.S. 105‑153.4."
SECTION 11.(c) G.S. 105‑131.7(c) reads as rewritten:
"(c) An S Corporation shall must file
with the Department, on a form prescribed by the Secretary, the agreement of
each nonresident shareholder of the corporation (i) to file a return and make
timely payment of all taxes imposed by this State on the shareholder with
respect to the income of the S Corporation, and (ii) to be subject to personal
jurisdiction in this State for purposes of the collection of any unpaid income
tax, together with related interest and penalties, owed by the nonresident
shareholder. If the corporation fails to timely file an agreement required by
this subsection on behalf of any of its nonresident shareholders, then the
corporation shall must at the time specified in subsection (d) of
this section pay to the Department on behalf of each nonresident shareholder
with respect to whom an agreement has not been timely filed an estimated amount
of the tax due the State. The estimated amount of tax due the State shall be
is computed at the rates rate levied in G.S. 105‑134.2(a)(3)
G.S. 105‑153.7 on the shareholder's pro rata share of the
S Corporation's income attributable to the State reflected on the corporation's
return for the taxable period. An S Corporation may recover a payment made
pursuant to the preceding sentence from the shareholder on whose behalf the
payment was made."
SECTION 11.(d) G.S. 105‑131.8(a) reads as rewritten:
"(a) For purposes of G.S. 105‑151 G.S. 105‑153.9
and G.S. 105‑160.4, each resident shareholder is considered to
have paid a tax imposed on the shareholder in an amount equal to the
shareholder's pro rata share of any net income tax paid by the S Corporation to
a state that does not measure the income of S Corporation shareholders by the
income of the S Corporation. For purposes of the preceding sentence, the term "net
income tax" means any tax imposed on or measured by a corporation's net
income."
SECTION 11.(e) G.S. 105‑154(d) reads as rewritten:
"(d) Payment of Tax on Behalf of Nonresident Owner
or Partner. – If a business conducted in this State is owned by a nonresident
individual or by a partnership having one or more nonresident members, the
manager of the business shall must report the earnings of the
business in this State, the distributive share of the income of each
nonresident owner or partner, and any other information required by the
Secretary. The manager of the business shall must pay with the
return the tax on each nonresident owner or partner's share of the income
computed at the rate levied on individuals under G.S. 105‑134.2(a)(3).
G.S. 105‑153.7. The business may deduct the payment for
each nonresident owner or partner from the owner or partner's distributive
share of the profits of the business in this State. If the nonresident partner
is not an individual and the partner has executed an affirmation that the partner
will pay the tax with its corporate, partnership, trust, or estate income tax
return, the manager of the business is not required to pay the tax on the
partner's share. In this case, the manager shall must include a
copy of the affirmation with the report required by this subsection."
SECTION 11.(f) 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 11.(g) G.S. 105‑163.1 reads as rewritten:
"§ 105‑163.1. Definitions.
The following definitions apply in this Article:
…
(6) Individual. – Defined in G.S. 105‑134.1.G.S. 105‑153.3.
…
(13) Wages. – The term has the same meaning as in section
3401 of the Code except it does not include either of the following:
a. The amount of severance wages paid to an
employee during the taxable year that is exempt from State income tax for that
taxable year under G.S. 105‑134.6(b)(11).
b. The the amount an employer
pays an employee as reimbursement for ordinary and necessary expenses incurred
by the employee on behalf of the employer and in the furtherance of the
business of the employer.
…."
SECTION 11.(h) G.S. 105‑163.22 reads as rewritten:
"§ 105‑163.22. Reciprocity.
The Secretary may, with the approval of the Attorney General,
enter into agreements with the taxing authorities of states having income tax
withholding statutes with such agreements to govern the amounts to be withheld
from the wages and salaries of residents of such other state or states under
the provisions of this Article when such other state or states grant similar
treatment to the residents of this State. Such The agreements may
provide for recognition of the anticipated tax credits allowed under the
provisions of G.S. 105‑151 G.S. 105‑153.9 in
determining the amounts to be withheld."
SECTION 11.(i) Effective for taxable years beginning on or after January 1, 2014, G.S. 105‑259(b)(34) and (36) are repealed.
SECTION 11.(j) G.S. 105‑277.3(d1) reads as rewritten:
"(d1) Exception for Easements on Qualified Conservation
Lands Previously Appraised at Use Value. Exception. – Property
that is appraised at its present‑use value under G.S. 105‑277.4(b)
shall continue to qualify for appraisal, assessment, and taxation as provided
in G.S. 105‑277.2 through G.S. 105‑277.7 as long as (i)
the property is subject to an enforceable conservation easement that would
qualify for the conservation tax credit provided in G.S. 105‑130.34
and G.S. 105‑151.12, without regard to actual production or income
requirements of this section; and (ii) the taxpayer received no more than
seventy‑five percent (75%) of the fair market value of the donated
property interest in compensation.the property is subject to a conservation
easement that meets the property eligibility requirements under G.S. 113A‑232.
Notwithstanding G.S. 105‑277.3(b) and (b1), subsequent transfer of
the property does not extinguish its present‑use value eligibility as
long as the property remains subject to an enforceable a qualifying conservation
easement that qualifies for the conservation tax credit provided in G.S. 105‑130.34
and G.S. 105‑151.12. easement. The exception provided in
this subsection applies only to that part of the property that is subject to
the easement."
SECTION 11.(k) G.S. 105‑309(d) reads as rewritten:
"(d) Personal property shall be listed to indicate
the township and municipality, if any, in which it is taxable and shall be
itemized by the taxpayer in such detail as may be prescribed by an abstract
form approved by the Department of Revenue. Personal property shall also be
listed to indicate which property, if any, is subject to a tax credit under G.S. 105‑151.21.
(1) If the assessor considers it necessary to obtain a complete listing of personal property, the assessor may require a taxpayer to submit additional information, inventories, or itemized lists of personal property.
(2) At the request of the assessor, the taxpayer shall furnish any information the taxpayer has with respect to the true value of the personal property the taxpayer is required to list."
SECTION 11.(l) G.S. 105‑320(a)(16) is repealed.
SECTION 11.(m) G.S. 110‑130.1(a) reads as rewritten:
"(a) All child support collection and paternity
determination services provided under this Article to recipients of public
assistance shall be made available to any individual not receiving public
assistance in accordance with federal law and as contractually authorized by
the nonrecipient, upon proper application and payment of a nonrefundable
application fee of twenty‑five dollars ($25.00). The fee shall be reduced
to ten dollars ($10.00) if the individual applying for the services is
indigent. An indigent individual is an individual whose gross income does not
exceed one hundred percent (100%) of the federal poverty guidelines issued each
year in the Federal Register by the U.S. Department of Health and Human
Services. For the purposes of this subsection, the term "gross income"
has the same meaning as defined in G.S. 105‑134.1.section
61 of the Code, and the term "Code" has the same meaning as defined
in G.S. 105‑228.90.
In the case of an individual who has never received assistance under a State program funded pursuant to Title IV‑A of the Social Security Act and for whom the State has collected and disbursed to the family in a federal fiscal year at least five hundred dollars ($500.00) of support, the State shall impose an annual fee of twenty‑five dollars ($25.00) for each case in which services are furnished. The child support agency shall retain the fee from support collected on behalf of the individual. However, the child support agency shall not retain the fee from the first five hundred dollars ($500.00) collected. The child support agency shall use the fee to support the ongoing operation of the program."
SECTION 11.(n) G.S. 113‑77.9(d) reads as rewritten:
"(d) Acquisition. –
The Department of Administration may, pursuant to G.S. 143‑341,
acquire by purchase, gift, or devise all lands selected by the Trustees for
acquisition pursuant to this Article. Title to any land acquired pursuant to
this Article shall be vested in the State. A State agency with management
responsibility for land acquired pursuant to this Article may enter into a
management agreement or lease with a county, city, town, or private nonprofit
organization qualified under G.S. 105‑151.12 and G.S. 105‑130.34
and certified under section 501(c)(3) of the Internal Revenue Code to aid
in managing the land. A management agreement or lease shall be executed by the
Department of Administration pursuant to G.S. 143‑341."
SECTION 11.(o) G.S. 113A‑231 reads as rewritten:
"§ 113A‑231. Program to accomplish conservation purposes.
The Department of Environment and Natural Resources shall
develop a nonregulatory program that uses conservation tax credits as a
prominent tool to accomplish conservation purposes, including the
maintenance of ecological systems. As a part of this program, the Department
shall exercise its powers to protect real property and interests in real property:
property donated for tax credit under G.S. 105‑130.34
or G.S. 105‑151.12; conserved with the use of other financial incentives;
or, conserved through nonregulatory programs. conservation or conserved
by other means. The Department shall call upon the Attorney General for
legal assistance in developing and implementing the program."
SECTION 11.(p) G.S. 113A‑232 reads as rewritten:
"§ 113A‑232. Conservation Grant Fund.
(a) Fund Created. – The Conservation Grant Fund is
created within the Department of Environment and Natural Resources. The Fund
shall be administered by the Department. The purpose of the Fund is to
stimulate the use of conservation easements and conservation tax credits, easements,
to improve the capacity of private nonprofit land trust organizations to
successfully accomplish conservation projects, to better equip real estate
related professionals to pursue opportunities for conservation, to increase
landowner participation in land and water conservation, and to provide an
opportunity to leverage private and other public monies for conservation
easements.
(b) Fund Sources. – The Conservation Grant Fund shall consist of any monies appropriated to it by the General Assembly and any monies received from public or private sources. Unexpended monies in the Fund that were appropriated from the General Fund by the General Assembly shall revert at the end of the fiscal year unless the General Assembly otherwise provides. Unexpended monies in the Fund from other sources shall not revert and shall remain available for expenditure in accordance with this Article.
(c) Property Eligibility. – In order for real property or an interest in real property to be the subject of a grant under this Article, the real property or interest in real property must meet all of the following conditions:
(1) possess Possess or have a high
potential to possess ecological value, must be value.
(2) Be reasonably restorable, and must
qualify for tax credits under G.S. 105‑130.34 or G.S. 105‑151.12.restorable.
(3) Be useful for one or more of the following purposes:
a. Public beach access or use.
b. Public access to public waters or trails.
c. Fish and wildlife conservation.
d. Forestland or farmland conservation.
e. Watershed protection.
f. Conservation of natural areas as that term is defined in G.S. 113A‑164.3(3).
g. Conservation of predominantly natural parkland.
(4) Be donated in perpetuity to and accepted by the State, a local government, or a body that is both organized to receive and administer lands for conservation purposes and qualified to receive charitable contributions under G.S. 105‑130.9. Land required to be dedicated pursuant to local governmental regulation or ordinance and dedications made to increase building density levels permitted under a regulation or ordinance do not qualify.
(c1) Grant Eligibility. – State conservation land
management agencies, local government conservation land management agencies,
and private nonprofit land trust organizations are eligible to receive grants
from the Conservation Grant Fund. Private nonprofit land trust organizations
must be qualified pursuant to G.S. 105‑130.34 and G.S. 105‑151.12
and must be certified under section 501(c)(3) of the Internal Revenue Code.Code
to aid in managing the land.
(d) Use of Revenue. – Revenue in the Conservation Grant Fund may be used only for the following purposes:
(1) The administrative costs of the Department in administering the Fund.
(2) Conservation grants made in accordance with this Article.
(3) To establish an endowment account, the interest from which will be used for a purpose described in G.S. 113A‑233(a)."
SECTION 11.(q) G.S. 113A‑233 reads as rewritten:
"§ 113A‑233. Uses of a grant from the Conservation Grant Fund.
(a) Allowable Uses. – A grant from the Conservation Grant Fund may be used only to pay for one or more of the following costs:
(1) Reimbursement for total or partial transaction costs for a donation of real property or an interest in real property from an individual or corporation satisfying either of the following:
a. Insufficient financial ability to pay all costs or insufficient taxable income to allow these costs to be included in the donated value.
b. Insufficient tax burdens to allow these costs to be
offset by the value of tax credits under G.S. 105‑130.34 or G.S. 105‑151.12
or by charitable deductions.
(2) Management support, including initial baseline inventory and planning.
(3) Monitoring compliance with conservation easements, the related use of riparian buffers, natural areas, and greenways, and the presence of ecological integrity.
(4) Education on conservation, including information materials intended for landowners and education for staff and volunteers.
(5) Stewardship of land.
(6) Transaction costs for recipients, including legal expenses, closing and title costs, and unusual direct costs, such as overnight travel.
(7) Administrative costs for short‑term growth or for building capacity.
(b) Prohibition. – The Fund shall not be used to pay the purchase price of real property or an interest in real property."
SECTION 11.(r) G.S. 113A‑256(g) is repealed.
SECTION 11.(s) This section becomes effective January 1, 2015.
PART XII. SALES TAX CONFORMING CHANGES
SECTION 12.1.(a) The following statutes are repealed:
G.S. 106‑507
G.S. 106‑516
G.S. 106‑517
G.S. 106‑518
G.S. 106‑519
G.S. 106‑520
G.S. 140‑10.1
SECTION 12.1.(b) G.S. 105‑164.9 is repealed.
SECTION 12.1.(c) G.S. 105‑164.10 reads as rewritten:
"§ 105‑164.10. Retail bracket system.
For the convenience of the retailer in collecting the tax due
under this Article, the Secretary shall must prescribe tables
that compute the tax due on sales by rounding off the amount of tax due to the
nearest whole cent. The Secretary shall must issue a separate
table for each rate of tax that may apply to a sale, including the general
rate established in G.S. 105‑164.4, preferential rates, and combined
State and local rates. Use of the tables prescribed by the Secretary does not
relieve a retailer of liability for the applicable rate of tax due on the gross
receipts or net taxable sales of the retailer.sale."
SECTION 12.1.(d) G.S. 105‑164.44F(a) reads as rewritten:
"(a) Amount. – The Secretary must distribute part
of the taxes imposed by G.S. 105‑164.4(a)(4c) G.S. 105‑164.4
on telecommunications service and ancillary 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 following percentages of the
net proceeds of the taxes collected during the quarter:
…."
SECTION 12.1.(e) 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)
G.S. 105‑164.4 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
Secretary must distribute two million dollars ($2,000,000) of this amount in
accordance with subsection (b) of this section and the remainder in accordance with
subsections (c) and (d) of this section. The revenue to be distributed under
this section consists of the following:
…."
SECTION 12.1.(f) G.S. 105‑449.106(c) reads as rewritten:
"(c) Special Mobile Equipment. – A person who
purchases and uses motor fuel to operate special mobile equipment off‑highway
may receive a quarterly refund, for the excise tax paid during the preceding
quarter, at a rate equal to the flat cents‑per‑gallon rate plus the
variable cents‑per‑gallon rate in effect during the quarter for
which the refund is claimed, less the amount of sales and use tax or
privilege tax due on the fuel under this Chapter, as determined in
accordance with G.S. 105‑449.107(c). An application for a refund
must be made in accordance with this Part."
SECTION 12.1.(g) G.S. 105‑449.107 reads as rewritten:
"§ 105‑449.107. Annual refunds for off‑highway use and use by certain vehicles with power attachments.
(a) Off‑Highway. – A person who purchases and
uses motor fuel for a purpose other than to operate a licensed highway vehicle
may receive an annual refund for the excise tax the person paid on fuel used
during the preceding calendar year. The amount of refund allowed is the amount
of the flat cents‑per‑gallon rate in effect during the year for
which the refund is claimed plus the average of the two variable cents‑per‑gallon
rates in effect during that year, less the amount of sales and use tax or
privilege tax due on the fuel under this Chapter. An application for a
refund allowed under this section must be made in accordance with this Part.
(b) Certain Vehicles. – A person who purchases and uses motor fuel in one of the vehicles listed below may receive an annual refund for the amount of fuel consumed by the vehicle:
(1) A concrete mixing vehicle.
(2) A solid waste compacting vehicle.
(3) A bulk feed vehicle that delivers feed to poultry or livestock and uses a power takeoff to unload the feed.
(4) A vehicle that delivers lime or fertilizer in bulk to farms and uses a power takeoff to unload the lime or fertilizer.
(5) A tank wagon that delivers alternative fuel, as defined in G.S. 105‑449.130, or motor fuel or another type of liquid fuel into storage tanks and uses a power takeoff to make the delivery.
(6) A commercial vehicle that delivers and spreads mulch, soils, composts, sand, sawdust, and similar materials and that uses a power takeoff to unload, blow, and spread the materials.
(7) A commercial vehicle that uses a power takeoff to remove and dispose of septage and for which an annual fee is required to be paid to the Department of Environment and Natural Resources under G.S. 130A‑291.1.
(8) A sweeper.
The amount of refund allowed is thirty‑three and one‑third
percent (33 1/3%) of the following: the sum of the flat cents‑per‑gallon
rate in effect during the year for which the refund is claimed and the average
of the two variable cents‑per‑gallon rates in effect during that
year, less the amount of sales and use tax or privilege tax due on the
fuel under this Chapter. An application for a refund allowed under this section
must be made in accordance with this Part. This refund is allowed for the
amount of fuel consumed by the vehicle in its mixing, compacting, or unloading
operations, as distinguished from propelling the vehicle, which amount is
considered to be one‑third of the amount of fuel consumed by the vehicle.
(c) Sales Tax Amount. – Article 5 of this Chapter
determines the amount of sales and use tax to be deducted under this section
from a motor fuel excise tax refund. Article 5F of this Chapter determines
the amount of privilege tax to be deducted under this section from a motor fuel
excise tax refund. The sales price and the cost price of motor fuel to be
used in determining the amount to deduct is the average of the wholesale prices
used under G.S. 105‑449.80 to determine the excise tax rates in
effect for the two six‑month periods of the year for which the refund is
claimed."
SECTION 12.1.(h) This section becomes effective January 1, 2014. Subsections (f) and (g) of this section apply to a claim for refund of taxes paid on motor fuel on or after January 1, 2014.
SECTION 12.2.(a) G.S. 105‑164.14(c) 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. ancillary service,
and piped natural gas. 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:
…."
SECTION 12.2.(b) This section becomes effective January 1, 2014.
PART XIII. LOCAL GOVERNMENT DISTRIBUTION conforming changes
SECTION 13.(a) G.S. 153A‑134 reads as rewritten:
"§ 153A‑134. Regulating and licensing businesses, trades, etc.
A county may by ordinance, subject to the general law of the
State, regulate and license occupations, businesses, trades, professions, and
forms of amusement or entertainment and prohibit those that may be inimical to
the public health, welfare, safety, order, or convenience. In licensing trades,
occupations, and professions, the county may, consistent with the general law
of the State, require applicants for licenses to be examined and charge a
reasonable fee therefor. for the examination.This
This section does not authorize a county to examine
do any of the following:
(1) Examine or license a person holding a
license issued by an occupational licensing board of this State as to the
profession or trade that he the person has been licensed to
practice or pursue by the State.
(2) Levy a privilege license tax on an entity that is subject to regulation and license under this section.
This section does not impair the county's power to levy
privilege license taxes on occupations, businesses, trades, professions, and
other activities pursuant to G.S. 153A‑152."
SECTION 13.(b) The catch line to G.S. 153A‑156 reads as rewritten:
"§ 153A‑156.
Gross receipts tax on short‑term leases or rentals.Motor
vehicle gross receipts tax in lieu of property tax."
SECTION 13.(c) G.S. 153A‑156(a) reads as rewritten:
"(a) As a substitute for and in replacement of
the ad valorem tax, which is excluded by G.S. 105‑275(42), a A
county may levy a gross receipts tax on the gross receipts from the short‑term
lease or rental of vehicles at retail to the general public. The tax rate shall
not exceed one and one‑half percent (1.5%) of the gross receipts from such
the short‑term leases or rentals. Motor vehicles subject to
this tax are exempt from property tax under G.S. 105‑275, and this
tax provides an alternative to the property tax on the motor vehicles."
SECTION 13.(d) G.S. 160A‑194 reads as rewritten:
"§ 160A‑194. Regulating and licensing businesses, trades, etc.
A city may by ordinance, subject to the general law of the
State, regulate and license occupations, businesses, trades, professions, and
forms of amusement or entertainment and prohibit those that may be inimical to
the public health, welfare, safety, order, or convenience. In licensing trades,
occupations, and professions, the city may, consistent with the general law of
the State, require applicants for licenses to be examined and charge a
reasonable fee therefor. for the examination. Nothing in this
section shall impair the city's power to levy privilege license taxes on
occupations, businesses, trades, professions, and other activities pursuant to G.S. 160A‑211.
Nothing in this section shall This section does not
authorize a city to examine do any of the following:
(1) Examine or license a person holding a
license issued by an occupational licensing board of this State as to the
profession or trade that he the person has been licensed to
practice or pursue by the State.
(2) Levy a privilege license tax on an entity that is subject to regulation and license under this section."
SECTION 13.(e) The catch line to G.S. 160A‑215.1 reads as rewritten:
"§ 160A‑215.1.
Gross receipts tax on short‑term leases or rentals.Motor
vehicle gross receipts tax in lieu of property tax."
SECTION 13.(f) G.S. 160A‑215.1(a) reads as rewritten:
"(a) As a substitute for and in replacement of
the ad valorem tax, which is excluded by G.S. 105‑275(42), a A
city may levy a gross receipts tax on the gross receipts from the short‑term
lease or rental of vehicles at retail to the general public. The tax rate shall
not exceed one and one‑half percent (1.5%) of the gross receipts from such
the short‑term leases or rentals. This tax on gross
receipts is in addition to the privilege taxes authorized by G.S. 160A‑211.Motor
vehicles subject to this tax are exempt from property tax under G.S. 105‑275,
and this tax provides an alternative to the property tax on the motor vehicles."
SECTION 13.(g) This section becomes effective July 1, 2014.
PART XIV. EFFECTIVE DATE
SECTION 14. Except as otherwise provided, this act is effective when it becomes law.