GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2013
SESSION LAW 2013-414
HOUSE BILL 14
AN ACT to make technical, clarifying, and administrative changes to the revenue laws and related statutes, as recommended by the revenue laws study committee.
The General Assembly of North Carolina enacts:
revenue laws recommendations
SECTION 1.(a) G.S. 105‑116(b) reads as rewritten:
"(b) Report Return
and Payment. – The tax imposed by this section is payable quarterly or
monthly as specified in this subsection. A return is due quarterly.
A water company or public sewerage company must pay tax quarterly when filing a return. An electric power company must pay tax in accordance with the schedule and requirements that apply to payments of sales and use tax under G.S. 105‑164.16 and must file a return quarterly.
A quarterly return covers a calendar quarter and is due by the last day of the month that follows the quarter covered by the return. A taxpayer must submit a return on a form provided by the Secretary. The return must include the taxpayer's gross receipts from all property it owned or operated during the reporting period in connection with its business taxed under this section. A taxpayer must report its gross receipts on an accrual basis. A return must contain the following information:
(1) The taxpayer's gross receipts for the reporting period from business inside and outside this State, stated separately.
(2) The taxpayer's gross receipts from commodities or services described in subsection (a) that are sold to a vendee subject to the tax levied by this section or to a joint agency established under Chapter 159B of the General Statutes or a city having an ownership share in a project established under that Chapter.
(3) The amount of and price paid by the taxpayer for commodities or services described in subsection (a) that are purchased from others engaged in business in this State and the name of each vendor.
(4) For an electric power company the entity's gross receipts from the sale within each city of the commodities and services described in subsection (a)."
SECTION 1.(b) G.S. 105‑120.2 reads as rewritten:
"§ 105‑120.2. Franchise or privilege tax on holding companies.
(a) Every corporation,
domestic and foreign, incorporated or, by an act, domesticated under the laws
of this State or doing business in this State which, that, at the
close of its taxable year year, is a holding company as defined
in subsection (c) of this section, shall, pursuant to the provisions of G.S. 105‑122:G.S. 105‑122,
do all of the following:
(1) Make a report and
statement, andFile a return.
(2) Determine the total
amount of its issued and outstanding capital stock, surplus and undivided profits,
andprofits.
(3) Apportion such outstanding capital stock, surplus and undivided profits to this State.
(b) (1) Every
corporation taxed under this section shall annually pay to the Secretary of
Revenue, at the time the report and statement are return is due,
a franchise or privilege tax, which is hereby levied, tax at the
rate of one dollar and fifty cents ($1.50) per one thousand dollars ($1,000) of
the amount determined under subsection (a) of this section, but in no case
shall the tax be more than seventy‑five thousand dollars ($75,000) nor
less than thirty‑five dollars ($35.00).
(2) Notwithstanding the
provisions of subdivision (1) of this subsection, if the tax produced pursuant to
application of this paragraph (2) exceeds the tax produced pursuant to
application of subdivision (1), then the tax shall be is levied
at the rate of one dollar and fifty cents ($1.50) per one thousand dollars
($1,000) on the greater of the amounts offollowing:
a. Fifty‑five percent
(55%) of the appraised value as determined for ad valorem taxation of all the
real and tangible personal property in this State of each such corporation plus
the total appraised value of intangible property returned for taxation of
intangible personal property as computed under G.S. 105‑122(d);
orG.S. 105‑122(d).
b. The total actual investment in tangible property in this State of such corporation as computed under G.S. 105‑122(d).
…."
SECTION 1.(c) G.S. 105‑122 reads as rewritten:
"§ 105‑122. Franchise or privilege tax on domestic and foreign corporations.
…
(d) After determining the
proportion of its total capital stock, surplus and undivided profits as set out
in subsection (c)(c1) of this section, which amount shall not be
less than fifty‑five percent (55%) of the appraised value as determined
for ad valorem taxation of all the real and tangible personal property in this
State of each corporation nor less than its total actual investment in tangible
property in this State, every corporation taxed under this section shall
annually pay to the Secretary of Revenue, at the time the report and
statement are return is due, a franchise or privilege tax at the
rate of one dollar and fifty cents ($1.50) per one thousand dollars ($1,000) of
the total amount of capital stock, surplus and undivided profits as provided in
this section. The tax imposed in this section shall not be less than thirty‑five
dollars ($35.00) and shall be is for the privilege of carrying
on, doing business, and/or the continuance of articles of incorporation or
domestication of each corporation in this State. Appraised value of tangible
property including real estate is the ad valorem valuation for the calendar
year next preceding the due date of the franchise tax return. The term "total
actual investment in tangible property" as used in this section means the
total original purchase price or consideration to the reporting taxpayer of its
tangible properties, including real estate, in this State plus additions and
improvements thereto less reserve for depreciation as permitted for income tax
purposes, and also less any indebtedness incurred and existing by virtue of the
purchase of any real estate and any permanent improvements made thereon. In
computing "total actual investment in tangible personal property" there
shall also be deducted a corporation may deduct reserves for the
entire cost of any air‑cleaning device or sewage or waste treatment
plant, including waste lagoons, and pollution abatement equipment purchased or
constructed and installed which reduces the amount of air or water pollution
resulting from the emission of air contaminants or the discharge of sewage and
industrial wastes or other polluting materials or substances into the outdoor
atmosphere or into streams, lakes, or rivers, upon condition that the
corporation claiming this deduction shall furnish to the Secretary a
certificate from the Department of Environment and Natural Resources or from a
local air pollution control program for air‑cleaning devices located in
an area where the Environmental Management Commission has certified a local air
pollution control program pursuant to G.S. 143‑215.112 certifying
that said Department or local air pollution control program has found as a fact
that the air‑cleaning device, waste treatment plant or pollution
abatement equipment purchased or constructed and installed as above described
has actually been constructed and installed and that the device, plant or
equipment complies with the requirements of the Environmental Management
Commission or local air pollution control program with respect to the devices,
plants or equipment, that the device, plant or equipment is being effectively
operated in accordance with the terms and conditions set forth in the permit,
certificate of approval, or other document of approval issued by the
Environmental Management Commission or local air pollution control program and
that the primary purpose is to reduce air or water pollution resulting from the
emission of air contaminants or the discharge of sewage and waste and not
merely incidental to other purposes and functions. The cost of constructing
facilities of any private or public utility built for the purpose of providing
sewer service to residential and outlying areas is treated as deductible for
the purposes of this section; the deductible liability allowed by this section shall
apply applies only with respect to pollution abatement plants or
equipment constructed or installed on or after January 1, 1955.
…
(f) The report,
statement return and tax required by this section shall be are
in addition to all other reports required or taxes levied and assessed in
this State.
…."
SECTION 1.(d) G.S. 105‑127(a) reads as rewritten:
"(a) Every corporation,
domestic or foreign, that is required to file a return with the Secretary from
which a report is required by law to be made to the Secretary of Revenue, shall,
unless otherwise provided, pay annually to said Secretary annually the
franchise tax as required by G.S. 105‑122."
SECTION 1.(e) G.S. 105‑134.2(b) reads as rewritten:
"(b) In lieu of the tax
imposed by subsection (a) of this section, there is imposed for each taxable
year upon the North Carolina taxable income of every individual a tax
determined under tables, applicable to the taxable year, which may be
prescribed by the Secretary. The amounts of the tax determined under the tables
shall be computed on the basis of the rates prescribed by subsection (a) of
this section. This subsection does not apply to an individual making filing
a return under section 443(a)(1) of the Code for a period of less than 12
months on account of a change in the individual's annual accounting period, or
to an estate or trust. The tax imposed by this subsection shall be treated as
the tax imposed by subsection (a) of this section."
SECTION 1.(f) G.S. 105‑164.19 reads as rewritten:
"§ 105‑164.19. Extension of time for making returns and payment.
The Secretary for good cause may
extend the time for making filing any return under the provisions
of this Article and may grant such additional time within which to make
such file the return as he may deem proper proper, but
the time for filing any such return shall not be extended for more than
30 days after the regular due date of such the return. If the time
for filing a return be is extended, interest accrues at
the rate established pursuant to G.S. 105‑241.21 from the time the
return was due to be filed to the date of payment.payment shall be
added and paid."
SECTION 1.(g) G.S. 105‑164.30 reads as rewritten:
"§ 105‑164.30. Secretary or agent may examine books, etc.
For the purpose of enforcing the
collection of the tax levied by this Article, the Secretary or his duly
authorized agent is hereby specifically authorized and empowered to
examine at all reasonable hours during the day the books, papers, records,
documents or other data of all retailers or wholesale merchants bearing upon
the correctness of any return or for the purpose of making filing a
return where none has been made as required by this Article, and may require
the attendance of any person and take his testimony with respect to any such
matter, with power to administer oaths to such person or persons. If any person
summoned as a witness shall fail fails to obey any summons to
appear before the Secretary or his authorized agent, or shall refuse refuses
to testify or answer any material question or to produce any book, record,
paper, or other data when required to do so, such the Secretary or
his authorized agent shall report the failure or refusal shall be
reported to the Attorney General or the district solicitor, who shall
thereupon institute proceedings in the superior court of the county where such
the witness resides to compel obedience to any summons of the
Secretary or his authorized agent. Officers who serve summonses or subpoenas,
and witnesses attending, shall receive like compensation as officers and
witnesses in the superior courts, to be paid from the proper appropriation for
the administration of this Article.
In the event any retailer or
wholesale merchant shall fail or refuse fails or refuses to
permit examination of the Secretary or his authorized agent to
examine his books, papers, accounts, records, documents or other data by
the Secretary or his authorized agents as aforesaid, data, the
Secretary shall have the power to proceed by citing said may require the
retailer or wholesale merchant to show cause before the superior court of
the county in which said taxpayer resides or has its principal place of
business as to why such the books, records, papers, or documents
should not be examined and said the superior court shall have
jurisdiction to enter an order requiring the production of all necessary books,
records, papers, or documents and to punish for contempt any person who violates
the order.of such order any person violating the same."
SECTION 1.(h) G.S. 105‑236(a)(9) reads as rewritten:
"(9) Willful Failure to
File Return, Supply Information, or Pay Tax. – Any person required to pay any
tax, to make file a return, to keep any records, or to supply any
information, who willfully fails to pay the tax, make file the
return, keep the records, or supply the information, at the time or times
required by law, or rules issued pursuant thereto, shall, is, in
addition to other penalties provided by law, be guilty of a Class 1
misdemeanor. Notwithstanding any other provision of law, no prosecution for a
violation brought under this subdivision shall be is barred
before the expiration of six years after the date of the violation."
SECTION 1.(i) G.S. 105‑258(a) reads as rewritten:
"(a) Secretary May
Examine Data and Summon Persons. – The Secretary of Revenue,Revenue is
authorized to do any of the following for the purpose of ascertaining the
correctness of any return, making filing a return where none has
been made, filed, or determining the liability of any person for
a tax, or collecting any tax:such tax, shall have the power
(1) to examine, Examine,
personally, or by an agent designated by him, any books, papers, records,
or other data which that may be relevant or material to such
inquiry, and the Secretary may the inquiry.
(2) summon Summon
any of the following persons to appear at a time and place named in the
summons, to produce such books, papers, records, or other data, and to give such
testimony under oath as may be relevant or material to the inquiry:
a. the Any
person liable for the tax or required to perform the act, or any officer or
employee of such person, or any person.
b. Any person
having possession, custody, care or control of books of account containing
entries relevant or material to the income and expenditures of the person
liable for the tax or required to perform the act, or any other person having
knowledge in the premises.premises, to appear before the Secretary,
or his agent, at a time and place named in the summons, and to produce such
books, papers, records or other data, and to give such testimony under oath as
may be relevant or material to such inquiry, and the Secretary or his agent may
(3) administer Administer
oaths to such person or persons. the persons listed in this subsection.
(4) If any person
so summoned refuses to obey such summons or to give testimony when summoned,
the Secretary may apply Apply to the Superior Court of Wake County
for an order requiring such person or persons to comply with the summons of
the Secretary, and the failureany person who refuses to obey the summons
or to give testimony when summoned. Failure to comply with such the
court order shall be punished as for contempt."
SECTION 1.(j) G.S. 105‑263(b) reads as rewritten:
"(b) Extension. – The
Secretary may extend the time in which a person must file a report or return
with the Secretary. To obtain an extension of time for filing a report or return,
a person must comply with any application requirement set by the Secretary. An
extension of time for filing a franchise tax return or an income tax return
does not extend the time for paying the tax due or the time when a penalty
attaches for failure to pay the tax. An extension of time for filing a
report or any return other than a franchise tax return or an income tax
return extends the time for paying the tax due and the time when a penalty
attaches for failure to pay the tax. When an extension of time for filing a report
or return extends the time for paying the tax expected to be due with the report
or return, interest, at the rate established pursuant to G.S. 105‑241.21,
accrues on the tax due from the original due date of the report or return
to the date the tax is paid."
SECTION 2.(a) G.S. 105‑122(c1) reads as rewritten:
"(c1) Apportionment. – A corporation that is doing business in this State and in one or more other states must apportion its capital stock, surplus, and undivided profits to this State. A corporation must use the apportionment method set out in subdivision (1) of this subsection unless the Department has authorized it to use a different method under subdivision (2) of this subsection. The portion of a corporation's capital stock, surplus, and undivided profits determined by applying the appropriate apportionment method is considered the amount of capital stock, surplus, and undivided profits the corporation uses in its business in this State.
…
(2) Alternative. – A corporation that believes the statutory apportionment method set out in subdivision (1) of this subsection subjects a greater portion of its capital stock, surplus, and undivided profits to tax under this section than is attributable to its business in this State may make a written request to the Secretary for permission to use an alternative method. The request must set out the reasons for the corporation's belief and propose an alternative method. The corporation has the burden of establishing by clear, cogent, and convincing proof that the statutory apportionment method subjects a greater portion of the corporation's capital stock, surplus, and undivided profits to tax under this section than is attributable to its business in this State and that the proposed alternative method is a better method of determining the amount of the corporation's capital stock, surplus, and undivided profits attributable to the corporation's business in this State.
The Secretary
must issue a written decision on a corporation's request for an alternative
apportionment method. If the decision grants the request, it must describe the
alternative method the corporation is authorized to use and state the tax years
to which the alternative method applies. A decision may apply to no more than
three tax years, unless the provisions of subdivision (3) of this subsection
applies. years. A corporation may renew a request to use an
alternative apportionment method by following the procedure in this
subdivision. A decision of the Secretary on a request for an alternative
apportionment method is final and is not subject to administrative or judicial
review. A corporation authorized to use an alternative method may apportion its
capital stock, surplus, and undivided profits in accordance with the
alternative method or the statutory method."
SECTION 2.(b) G.S. 105‑130.4(t1) reads as rewritten:
"(t1) Alternative Apportionment Method. – A corporation that believes the statutory apportionment method that otherwise applies to it under this section subjects a greater portion of its income to tax than is attributable to its business in this State may make a written request to the Secretary for permission to use an alternative method. The request must set out the reasons for the corporation's belief and propose an alternative method.
The statutory apportionment method that otherwise applies to a corporation under this section is presumed to be the best method of determining the portion of the corporation's income that is attributable to its business in this State. A corporation has the burden of establishing by clear, cogent, and convincing proof that the proposed alternative method is a better method of determining the amount of the corporation's income attributable to the corporation's business in this State.
The Secretary must issue a written
decision on a corporation's request for an alternative apportionment method. If
the decision grants the request, it must describe the alternative method the
corporation is authorized to use and state the tax years to which the
alternative method applies. A decision may apply to no more than three tax years,
unless the provisions of subsection (t2) of this section apply. years. A
corporation may renew a request to use an alternative apportionment method by
following the procedure in this subsection. A decision of the Secretary on a
request for an alternative apportionment method is final and is not subject to
administrative or judicial review. A corporation authorized to use an
alternative method may apportion its income in accordance with the alternative
method or the statutory method. A corporation may not use an alternative
apportionment method except upon written order of the Secretary, and any return
in which any alternative apportionment method, other than the method prescribed
by statute, is used without permission of the Secretary is not a lawful return."
SECTION 3. G.S. 105‑163.41(c) reads as rewritten:
"(c) The period of the
underpayment shall run runs from the date the installment was
required to be paid to the earlier of:
(1) The 15th day of the 3rd
fourth month following the close of the taxable year, or
(2) With respect to any
portion of the underpayment, the date on which the portion is paid. An
installment payment of estimated tax shall be is considered a
payment of any previous underpayment only to the extent the payment exceeds the
amount of the installment determined under subdivision (1) of subsection (b)
for that installment date."
SECTION 4. G.S. 105‑129.84(c) reads as rewritten:
"(c) Carryforward. –
Unless a longer carryforward period applies, any unused portion of a credit
allowed under G.S. 105‑129.87 or G.S. 105‑129.88 may be
carried forward for the succeeding five years, and any unused portion of a
credit allowed under G.S. 105‑129.89 may be carried forward for the
succeeding 15 years. If the Secretary of Commerce makes a written determination
that the taxpayer is expected to purchase or lease, and place in service in
connection with an eligible business within a two‑year period, at least
one hundred fifty million dollars ($150,000,000) worth of business and real
property, any unused portion of a credit under this Article with respect to the
establishment that satisfies that condition may be carried forward for the
succeeding 20 years. If the taxpayer does not make the required level of
investment, the taxpayer shall apply the five‑year standard carryforward
period rather than the 20‑year carryforward period."
SECTION 5.(a) G.S. 105‑134.6 reads as rewritten:
"§ 105‑134.6. Modifications to adjusted gross income.
…
(b) Other Deductions. – In calculating North Carolina taxable income, a taxpayer may deduct any of the following items to the extent those items are included in the taxpayer's adjusted gross income.
…
(17b) An amount equal to twenty
percent (20%) of the amount added to federal taxable income as accelerated
depreciation under subdivision (c)(8b) of this section. For the amount
added to taxable income in the 2010 taxable year, the deduction allowed by this
subdivision applies to the first five taxable years beginning on or after
January 1, 2011. For the amount added to taxable income in the 2011 taxable
year, the deduction allowed by this subdivision applies to the first five
taxable years beginning on or after January 1, 2012. For the amount added to taxable
adjusted gross income in the 2012 taxable year, the deduction
allowed by this subdivision applies to the first five taxable years beginning
on or after January 1, 2013.
…
(d) Other Adjustments. – In calculating North Carolina taxable income, a taxpayer must make the following adjustments to adjusted gross income.
(1) The amount of
inheritance or estate tax attributable to an item of income in respect of a
decedent required to be included in gross income under the Code, adjusted as
provided in G.S. 105‑134.5, 105‑134.6, and 105‑134.7,105‑134.6A,
may be deducted in the year the item of income is included. The amount of
inheritance or estate tax attributable to an item of income in respect of a
decedent is (i) the amount by which the inheritance or estate tax paid under
Article 1 or 1A of this Chapter on property transferred to a beneficiary by a
decedent exceeds the amount of the tax that would have been payable by the
beneficiary if the item of income in respect of a decedent had not been
included in the property transferred to the beneficiary by the decedent, (ii)
multiplied by a fraction, the numerator of which is the amount required to be
included in gross income for the taxable year under the Code, adjusted as
provided in G.S. 105‑134.5, 105‑134.6, and 105‑134.7,
105‑134.6A, and the denominator of which is the total amount
of income in respect of a decedent transferred to the beneficiary by the
decedent. For an estate or trust, the deduction allowed by this subdivision
shall be computed by excluding from the gross income of the estate or trust the
portion, if any, of the items of income in respect of a decedent that are
properly paid, credited, or to be distributed to the beneficiaries during the
taxable year.
The Secretary may provide to a beneficiary of an item of income in respect of a decedent any information contained on an inheritance or estate tax return that the beneficiary needs to compute the deduction allowed by this subdivision.
…
(3) The taxpayer shall add
to taxable adjusted gross income the amount of any recovery
during the taxable year not included in taxable adjusted gross income,
to the extent the taxpayer's deduction of the recovered amount in a prior
taxable year reduced the taxpayer's tax imposed by this Part but, due to
differences between the Code and this Part, did not reduce the amount of the
taxpayer's tax imposed by the Code. The taxpayer may deduct from taxable adjusted
gross income the amount of any recovery during the taxable year included in
taxable adjusted gross income under section 111 of the Code, to
the extent the taxpayer's deduction of the recovered amount in a prior taxable
year reduced the taxpayer's tax imposed by the Code but, due to differences
between the Code and this Part, did not reduce the amount of the taxpayer's tax
imposed by this Part.
(4) A taxpayer may deduct
from taxable adjusted gross income the amount, not to exceed two
thousand five hundred dollars ($2,500), contributed to an account in the
Parental Savings Trust Fund of the State Education Assistance Authority
established pursuant to G.S. 116‑209.25. In the case of a married
couple filing a joint return, the maximum dollar amount of the deduction is
five thousand dollars ($5,000).
(5) The taxpayer shall add
to taxable adjusted gross income the amount deducted from
taxable income in a prior taxable year under subdivision (4) of this
subsection to the extent this amount was withdrawn from the Parental Savings
Trust Fund of the State Education Assistance Authority established pursuant to G.S. 116‑209.25
and not used to pay for the qualified higher education expenses of the
designated beneficiary, unless the withdrawal was made without penalty under
section 529 of the Code due to the death or permanent disability of the
designated beneficiary.
(6) A taxpayer who is an
eligible firefighter or an eligible rescue squad worker may deduct from taxable
adjusted gross income the sum of two hundred fifty dollars
($250.00). In the case of a married couple filing a joint return, each spouse
may qualify separately for the deduction allowed under this subdivision. In
order to claim the deduction allowed under this subdivision, the taxpayer must
submit with the tax return any documentation required by the Secretary. An
individual may not claim a deduction as both an eligible firefighter and as an
eligible rescue squad worker in a single taxable year. The following
definitions apply in this subdivision:
a. Eligible firefighter. – An unpaid member of a volunteer fire department who attended at least 36 hours of fire department drills and meetings during the taxable year.
b. Eligible rescue squad worker. – An unpaid member of a volunteer rescue or emergency medical services squad who attended at least 36 hours of rescue squad training and meetings during the taxable year.
…."
SECTION 5.(b) G.S. 105‑151(a) reads as rewritten:
"(a) An individual who is a resident of this State is allowed a credit against the taxes imposed by this Part for income taxes imposed by and paid to another state or country on income taxed under this Part, subject to the following conditions:
…
(2) The fraction of the
gross income, as calculated under the Code and adjusted as provided in G.S. 105‑134.6
and G.S. 105‑134.7, G.S. 105‑134.6A, that
is subject to income tax in another state or country shall be ascertained, and
the North Carolina net income tax before credit under this section shall be
multiplied by that fraction. The credit allowed is either the product thus
calculated or the income tax actually paid the other state or country,
whichever is smaller.
…."
SECTION 5.(c) G.S. 105‑151.11(c) reads as rewritten:
"(c) Limitations. – A
nonresident or part‑year resident who claims the credit allowed by this
section shall reduce the amount of the credit by multiplying it by the fraction
calculated under G.S. 105‑134.5(b) or (c), as appropriate. No credit
shall be allowed under this section for amounts deducted from gross income in
calculating North Carolina taxable income under the Code. income.
The credit allowed by this section may not exceed the amount of tax imposed
by this Part for the taxable year reduced by the sum of all credits allowable,
except for payments of tax made by or on behalf of the taxpayer."
SECTION 5.(d) G.S. 105‑151.30(e) reads as rewritten:
"(e) No Double Benefit.
– A taxpayer who claims a credit under this section must add back to taxable
adjusted gross income any amount deducted under G.S. 105‑134.6(a2)the
Code for the donation of the oyster shells."
SECTION 5.(e) G.S. 105‑152 reads as rewritten:
"§ 105‑152. Income tax returns.
…
(c) Information Required
With Return. – The income tax return shall show the taxable adjusted
gross income and adjustments required by this Part and any other
information the Secretary requires. The Secretary may require some or all
individuals required to file an income tax return to attach to the return a
copy of their federal income tax return for the taxable year. The Secretary may
require a taxpayer to provide the Department with copies of any other return
the taxpayer has filed with the Internal Revenue Service and to verify any
information in the return.
(d) Secretary May Require
Additional Information. – When the Secretary has reason to believe that any
taxpayer conducts a trade or business in a way that directly or indirectly
distorts the taxpayer's taxable adjusted gross income or North
Carolina taxable income, the Secretary may require any additional information
for the proper computation of the taxpayer's taxable adjusted gross income
and North Carolina taxable income. In computing the taxpayer's taxable adjusted
gross income and North Carolina taxable income, the Secretary shall
consider the fair profit that would normally arise from the conduct of the
trade or business.
…."
SECTION 5.(f) G.S. 105‑160.1 reads as rewritten:
"§ 105‑160.1. Definitions.
The definitions provided in Part 2 of this Article shall apply in this Part except where the context clearly indicates a different meaning. In addition, as used in this Part, "taxable income" is defined in sections 641 through 692 of the Code."
SECTION 5.(g) G.S. 105‑160.2 reads as rewritten:
"§ 105‑160.2. Imposition of tax.
The tax imposed by this Part shall
apply applies to the taxable income of estates and trusts as
determined under the provisions of the Code except as otherwise provided in
this Part. The taxable income of an estate or trust shall be is the
same as taxable income for such an estate or trust under the provisions of the
Code, adjusted as provided in G.S. 105‑134.6 and G.S. 105‑134.7,
G.S. 105‑134.6A, except that the adjustments provided in G.S. 105‑134.6
and G.S. 105‑134.7 shall be G.S. 105‑134.6A are
apportioned between the estate or trust and the beneficiaries based on the
distributions made during the taxable year. The tax shall be is computed
on the amount of the taxable income of the estate or trust that is for the
benefit of a resident of this State, or for the benefit of a nonresident to the
extent that the income (i) is derived from North Carolina sources and is
attributable to the ownership of any interest in real or tangible personal
property in this State or (ii) is derived from a business, trade, profession,
or occupation carried on in this State. For purposes of the preceding sentence,
taxable income and gross income shall be is computed subject to
the adjustments provided in G.S. 105‑134.6 and G.S. 105‑134.7.
G.S. 105‑134.6A. The tax on the amount computed above shall
be is at the rates levied in G.S. 105‑134.2(a)(3). The
fiduciary responsible for administering the estate or trust shall pay theThe
tax computed under the provisions of this Part shall be paid by the
fiduciary responsible for administering the estate or trust.Part."
SECTION 6.(a) The first sentence of G.S. 105‑134.7(a)(3) is recodified as G.S. 105‑134.6(c)(20).
SECTION 6.(b) G.S. 105‑134.7(a)(6) is recodified as G.S. 105‑134.6(c)(21) and reads as rewritten:
"(21) A loss or deduction
that was incurred or paid and deducted from State taxable income in a taxable
year beginning before January 1, 1989, and is carried forward and deducted in a
taxable year beginning on or after January 1, 1989, under the Code shall be
added to taxable income.Code."
SECTION 6.(c) The second sentence of G.S. 105‑134.7(a)(3) is recodified as G.S. 105‑134.6(b)(24).
SECTION 6.(d) G.S. 105‑134.7(a)(7) is recodified as G.S. 105‑134.6(d)(11).
SECTION 6.(e) G.S. 105‑134.7(b) is recodified as G.S. 105‑134.6(d)(12).
SECTION 6.(f) The remainder of G.S. 105‑134.7 is repealed.
SECTION 7. G.S. 105‑151.18 reads as rewritten:
"§ 105‑151.18. Credit for the disabled.
(a) Disabled Taxpayer. – A taxpayer who (i) is retired on disability, (ii) at the time of retirement, was permanently and totally disabled, and (iii) claims a federal income tax credit under section 22 of the Code for the taxable year, is allowed as a credit against the tax imposed by this Part an amount equal to one‑third of the amount of the federal income tax credit for which the taxpayer is eligible under section 22 of the Code.
(b) Disabled Dependent. –
If a dependent or spouse for whom a taxpayer is allowed an exemption under the
Code is permanently and totally disabled, the taxpayer is allowed a credit
against the tax imposed by this Part. In order to claim the credit allowed by
this subsection, the taxpayer must attach to the tax return on which the credit
is claimed a statement from a physician or local health department certifying
that the dependent or spouse for whom the credit is claimed is permanently and
totally disabled, as defined in this section. The amount of the credit allowed shall
be is determined as follows: For a taxpayer whose North Carolina
adjusted gross income does not exceed the appropriate income amount provided in
the table below, based on the taxpayer's filing status, the credit allowed is
the appropriate initial credit provided in the table below. For a taxpayer
whose North Carolina adjusted gross income does exceed the appropriate income
amount, the credit allowed is the appropriate initial credit reduced by four
dollars ($4.00) for every one thousand dollars ($1,000) by which the taxpayer's
North Carolina adjusted gross income exceeds the appropriate income amount.
Initial Income
Filing Status Credit Amount
Head of Household $64.00 $16,000
Surviving Spouse or Joint Return $80.00 $20,000
Single $48.00 $12,000
Married Filing Separately $40.00 $10,000
(c) Definitions. – The following definitions apply in this section:
(1) North Carolina Adjusted
Gross Income.adjusted gross income. – Adjusted gross income, as
determined under the Code, adjusted as provided in G.S. 105‑134.6
and G.S. 105‑134.7.G.S. 105‑134.6A.
(2) Permanently and Totally
Disabled. totally disabled. – Unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death or that has lasted or can be
expected to last for a continuous period of not less than 12 months. For the
purpose of this section, a minor is permanently and totally disabled if the
impact of the impairment on the minor's ability to function is equivalent in
severity to that which would make an adult unable to engage in any substantial
gainful activity.
(d) Limitations. – A nonresident or part‑year resident who claims the credit allowed by this section shall reduce the amount of the credit by multiplying it by the fraction calculated under G.S. 105‑134.5(b) or (c), as appropriate. The credit allowed under this section may not exceed the amount of tax imposed by this Part for the taxable year reduced by the sum of all credits allowable, except payments of tax made by or on behalf of the taxpayer."
SECTION 8. G.S. 105‑164.3 reads as rewritten:
"§ 105‑164.3. Definitions.
The following definitions apply in this Article:
…
(37b) School instructional material. – Written material commonly used by a student in a course of study as a reference and to learn the subject being taught. The following is an all‑inclusive list:
a. Reference books.
b. Reference maps and globes.
c. Textbooks.
d. Workbooks.Defined
in the Streamlined Agreement.
…
(44) Storage. – The keeping or retention in this State for any purpose, except sale in the regular course of business, of tangible personal property or digital property purchased from a retailer. The term does not include a purchaser's storage of tangible personal property or digital property in any of the following circumstances:
a. When the purchaser is able to document that at the time the purchaser acquires the property the property is designated for the purchaser's use outside the State and the purchaser subsequently takes it outside the State and uses it solely outside the State.
b. When the purchaser acquires the property to process, fabricate, manufacture, or otherwise incorporate it into or attach it to other property for the purchaser's use outside the State and, after incorporating or attaching the purchased property, the purchaser subsequently takes the other property outside the State and uses it solely outside the State.
…
(45a) Streamlined Agreement. –
The Streamlined Sales and Use Tax Agreement as amended as of December 19,
2011.May 24, 2012.
…."
SECTION 9. G.S. 105‑164.4(a)(3) reads as rewritten:
"(3) A tax at the general rate applies to the gross receipts derived from the rental of an accommodation. The tax does not apply to (i) a private residence or cottage that is rented for fewer than 15 days in a calendar year; (ii) an accommodation rented to the same person for a period of 90 or more continuous days; or (iii) an accommodation arranged or provided to a person by a school, camp, or similar entity where a tuition or fee is charged to the person for enrollment in the school, camp, or similar entity.
Gross receipts derived from the rental of an accommodation include the sales price of the rental of the accommodation. The sales price of the rental of an accommodation is determined as if the rental were a rental of tangible personal property. The sales price of the rental of an accommodation marketed by a facilitator includes charges designated as facilitation fees and any other charges necessary to complete the rental.
A person who
provides an accommodation that is offered for rent is considered a retailer
under this Article. A facilitator must report to the retailer with whom it has
a contract the sales price a consumer pays to the facilitator for an
accommodation rental marketed by the facilitator. A retailer must notify a
facilitator when an accommodation rental marketed by the facilitator is
completed and, within three business days of receiving the notice, and
the facilitator must send the retailer the portion of the sales price the
facilitator owes the retailer and the tax due on the sales price. price
no later than 10 days after the end of each calendar month. A facilitator
that does not send the retailer the tax due on the sales price is liable for
the amount of tax the facilitator fails to send. A facilitator is not liable
for tax sent to a retailer but not remitted by the retailer to the Secretary.
Tax payments received by a retailer from a facilitator are held in trust by the
retailer for remittance to the Secretary. A retailer that receives a tax
payment from a facilitator must remit the amount received to the Secretary. A
retailer is not liable for tax due but not received from a facilitator. The
requirements imposed by this subdivision on a retailer and a facilitator are
considered terms of the contract between the retailer and the facilitator.
A person who, by written contract, agrees to be the rental agent for the provider of an accommodation is considered a retailer under this Article and is liable for the tax imposed by this subdivision. The liability of a rental agent for the tax imposed by this subdivision relieves the provider of the accommodation from liability. A rental agent includes a real estate broker, as defined in G.S. 93A‑2.
The following definitions apply in this subdivision:
a. Accommodation. – A hotel room, a motel room, a residence, a cottage, or a similar lodging facility for occupancy by an individual.
b. Facilitator. – A person who is not a rental agent and who contracts with a provider of an accommodation to market the accommodation and to accept payment from the consumer for the accommodation."
SECTION 10. G.S. 105‑164.6(c) reads as rewritten:
"(c) Credit. – A credit is allowed against the tax imposed by this section for the following:
(1) The amount of sales or
use tax paid on the item to this State. State, provided the tax is
stated and charged separately on the invoice or other document of the retailer
given to the purchaser at the time of the sale, except as otherwise provided in
G.S. 105‑164.7, or provided the retailer remitted the tax subsequent
to the sale and the purchaser obtains such documentation. Payment of sales
or use tax to this State on an item by a retailer extinguishes the liability of
a purchaser for the tax imposed under this section.
(2) The amount of sales or use tax due and paid on the item to another state. If the amount of tax paid to the other state is less than the amount of tax imposed by this section, the difference is payable to this State. The credit allowed by this subdivision does not apply to tax paid to a state that does not grant a similar credit for sales or use taxes paid in North Carolina."
SECTION 11.(a) G.S. 105‑164.13 reads as rewritten:
"§ 105‑164.13. Retail sales and use tax.
The sale at retail and the use, storage, or consumption in this State of the following tangible personal property, digital property, and services are specifically exempted from the tax imposed by this Article:
…
(26) Food and prepared food sold not for profit by public or private school cafeterias within school buildings during the regular school day.
(26a) Food and prepared food sold not for profit by a public school cafeteria to a child care center that participates in the Child and Adult Care Food Program of the Department of Health and Human Services.
(27) Meals Prepared
food and food products served to students in dining rooms regularly
operated by State or private educational institutions or student organizations
thereof.
…
(31a) Food and prepared food sold by a church or religious organization not operated for profit when the proceeds of the sales are actually used for religious activities.
…
(33a) Tangible personal property
sold by a retailer to a purchaser within or withoutinside or outside this
State, when the property is delivered by the retailer in this State to a common
carrier or to the United States Postal Service for delivery to the purchaser or
the purchaser's designees outside this State and the purchaser does not
subsequently use the property in this State. This exemption includes printed
material sold by a retailer to a purchaser inside or outside this State when
the printed material is delivered directly to a mailing house, to a common
carrier, or to the United States Postal Service for delivery to a mailing house
in this State that will preaddress and presort the material and deliver it to a
common carrier or to the United States Postal Service for delivery to
recipients outside this State designated by the purchaser.
…
(43a) Computer software that meets any of the following descriptions:
a. It is designed purchased
to run on an enterprise server operating system. The exemption includes
a purchase or license of computer software for high‑volume, simultaneous
use on multiple computers that is housed or maintained on an enterprise server
or end users' computers. The exemption includes software designed to run a
computer system, an operating program, or application software.
b. It is sold to a person who operates a datacenter and is used within the datacenter.
c. It is sold to a person who provides cable service, telecommunications service, or video programming and is used to provide ancillary service, cable service, Internet access service, telecommunications service, or video programming.
…
(57) Fuel and electricity sold to a manufacturer for use in connection with the operation of a manufacturing facility. The exemption does not apply to electricity used at a facility at which the primary activity is not manufacturing.
…."
SECTION 11.(b) G.S. 105‑164.13A reads as rewritten:
"§ 105‑164.13A. Service charges
on food, beverages, or meals.prepared food.
When a service charge is imposed
on food, beverages, or meals, prepared food, so much of the
service charge that does not exceed twenty percent (20%) of the sales price is
considered a tip and is specifically exempted from the tax imposed by this Article
if it meets both of the following conditions:
(1) Is separately stated in the price list, menu, or written proposal and also in the invoice or bill.
(2) Is turned over to the
personnel directly involved in the service of the food, beverages, or meals,
prepared food, in accordance with G.S. 95‑25.6."
SECTION 12. G.S. 105‑164.14(b) reads as rewritten:
"(b) Nonprofit Entities and Hospital Drugs. – A nonprofit entity is allowed a semiannual refund of sales and use taxes paid by it under this Article on direct purchases of tangible personal property and services, other than electricity, telecommunications service, and ancillary service, for use in carrying on the work of the nonprofit entity. Sales and use tax liability indirectly incurred by a nonprofit entity through reimbursement to an authorized person of the entity for the purchase of tangible personal property and services, other than electricity, telecommunications service, and ancillary service, for use in carrying on the work of the nonprofit entity is considered a direct purchase by the entity. Sales and use tax liability indirectly incurred by a nonprofit entity on building materials, supplies, fixtures, and equipment that become a part of or annexed to any building or structure that is owned or leased by the nonprofit entity and is being erected, altered, or repaired for use by the nonprofit entity for carrying on its nonprofit activities is considered a sales or use tax liability incurred on direct purchases by the nonprofit entity. A request for a refund must be in writing and must include any information and documentation required by the Secretary. A request for a refund for the first six months of a calendar year is due the following October 15; a request for a refund for the second six months of a calendar year is due the following April 15.
The refunds allowed under this
subsection do not apply to an entity that is owned and controlled by the United
States or to an entity that is owned or controlled by the State and is not
listed in this subsection. A hospital that is not listed in this subsection is
allowed a semiannual refund of sales and use taxes paid by it on medicines
and over‑the‑counter drugs purchased for use in carrying
out its work. The following nonprofit entities are allowed a refund under this
subsection:
(1) Hospitals not operated for profit, including hospitals and medical accommodations operated by an authority or other public hospital described in Article 2 of Chapter 131E of the General Statutes.
(2) An organization that is exempt from income tax under section 501(c)(3) of the Code, other than an organization that is properly classified in any of the following major group areas of the National Taxonomy of Exempt Entities:
a. Community Improvement and Capacity Building.
b. Public and Societal Benefit.
c. Mutual and Membership Benefit.
(2a) An organization that is exempt from income tax under the Code and is one of the following:
a. A volunteer fire department.
b. A volunteer emergency medical services squad.
(2b) An organization that is a single member LLC that is disregarded for income tax purposes and satisfies all of the following conditions:
a. The owner of the LLC is an organization that is exempt from income tax under section 501(c)(3) of the Code.
b. The LLC is a nonprofit entity that would be eligible for an exemption under 501(c)(3) of the Code if it were not disregarded for income tax purposes.
c. The LLC is not an organization that would be properly classified in any of the major group areas of the National Taxonomy of Exempt Entities listed in subdivision (2) of this subsection."
SECTION 13. G.S. 105‑164.27A reads as rewritten:
"§ 105‑164.27A. Direct pay permit.
(a) General. – A general
direct pay permit authorizes its holder to purchase any tangible personal
property, digital property, or service without paying tax to the seller and
authorizes the seller to not collect any tax on a sale to the permit holder. A
person who purchases an item under a direct pay permit issued under this
subsection is liable for use tax due on the purchase. The tax is payable when
the property is placed in use or the service is received. A direct pay permit
issued under this subsection does not apply to taxes imposed under G.S. 105‑164.4
on electricity.sales of electricity or the gross receipts derived
from rentals of accommodations.
A person who purchases an item for storage, use, or consumption in this State whose tax status cannot be determined at the time of the purchase because of one of the reasons listed below may apply to the Secretary for a general direct pay permit:
(1) The place of business where the item will be stored, used, or consumed is not known at the time of the purchase and a different tax consequence applies depending on where the item is used.
(2) The manner in which the item will be stored, used, or consumed is not known at the time of the purchase and one or more of the potential uses is taxable but others are not taxable.
(a1) Direct Mail. – A person who purchases direct mail may apply to the Secretary for a direct pay permit for the purchase of direct mail. A direct pay permit issued for direct mail does not apply to any purchase other than the purchase of direct mail. A person who purchases direct mail under a direct pay permit must file a return and pay the tax due monthly or quarterly to the Secretary.
.…"
SECTION 14. G.S. 105‑164.35 is repealed.
SECTION 15. G.S. 105‑164.42L reads as rewritten:
"§
105‑164.42L. Databases on taxing jurisdictions.Liability
relief for erroneous information or insufficient notice by Department.
(a) The Secretary may develop databases that provide information on the boundaries of taxing jurisdictions and the tax rates applicable to those taxing jurisdictions. A person who relies on the information provided in these databases is not liable for underpayments of tax attributable to erroneous information provided by the Secretary in those databases.
(b) The Secretary may develop a taxability matrix that provides information on the taxability of certain items. A person who relies on the information provided in the taxability matrix is not liable for underpayments of tax attributable to erroneous information provided by the Secretary in the taxability matrix.
(c) A retailer is not liable for an underpayment of tax attributable to a rate change when the State fails to provide for at least 30 days between the enactment of the rate change and the effective date of the rate change if the conditions of this subsection are satisfied. However, if the State establishes the retailer fraudulently failed to collect tax at the new rate or solicited customers based on the immediately preceding effective rate, this liability relief does not apply. Both of the following conditions must be satisfied for liability relief:
(1) The retailer collected tax at the immediately preceding rate.
(2) The retailer's failure to collect at the newly effective rate does not extend beyond 30 days after the date of enactment of the new rate or the effective date applicable under G.S. 105‑164.15A."
SECTION 16. G.S. 105‑187.52(b) reads as rewritten:
"(b) Credit. – A credit
is allowed against the tax imposed by this Article for the amount of a sales or
use tax, privilege or excise tax, or substantially equivalent tax due and paid
to another state. state or for the amount of sales and use tax paid
to this State. The credit allowed by this subsection does not apply to tax
paid to another state that does not grant a similar credit for the privilege
tax paid in North Carolina."
SECTION 17. G.S. 105‑236.1(a) reads as rewritten:
"(a) General. – The Secretary may appoint employees of the Unauthorized Substances Tax Section of the Tax Enforcement Division to serve as revenue law enforcement officers having the responsibility and subject‑matter jurisdiction to enforce the excise tax on unauthorized substances imposed by Article 2D of this Chapter.
The Secretary may appoint up to 11
employees of the Motor Fuels Tax Investigations Section of the Tax
Enforcement Division to serve as revenue law enforcement officers having
the responsibility and subject‑matter jurisdiction to enforce the taxes
on motor fuels imposed by Articles 36B, 36C, and 36D of this Chapter and by
Chapter 119 of the General Statutes.
The Secretary may appoint employees of the Criminal Investigations Section of the Tax Enforcement Division to serve as revenue law enforcement officers having the responsibility and subject‑matter jurisdiction to enforce the following tax violations and criminal offenses:
(1) The felony and misdemeanor tax violations in G.S. 105‑236.
(2) The misdemeanor tax violations in G.S. 105‑449.117 and G.S. 105‑449.120.
(3) The following criminal offenses when they involve a tax imposed under Chapter 105 of the General Statutes:
a. G.S. 14‑91 (Embezzlement of State Property).
b. G.S. 14‑92 (Embezzlement of Funds).
c. G.S. 14‑100 (Obtaining Property By False Pretenses).
c1. G.S. 14‑113.20 (Identity Theft).
c2. G.S. 14‑133.20A (Trafficking in Stolen Identities).
d. G.S. 14‑119 (Forgery).
e. G.S. 14‑120 (Uttering Forged Paper).
f. G.S. 14‑401.18 (Sale of Certain Packages of Cigarettes)."
SECTION 18.(a) G.S. 105‑256(a)(9) is repealed.
SECTION 18.(b) This section is effective when it becomes law and applies to cases filed on or after January 1, 2012.
SECTION 19. G.S. 105‑259(b) reads as rewritten:
"(b) Disclosure Prohibited. – An officer, an employee, or an agent of the State who has access to tax information in the course of service to or employment by the State may not disclose the information to any other person except as provided in this subsection. Standards used or to be used for the selection of returns for examination and data used or to be used for determining the standards may not be disclosed for any purpose. All other tax information may be disclosed only if the disclosure is made for one of the following purposes:
…
(15a) To furnish to the head
of the appropriate State or local, State, or federal law
enforcement agency agency, including a prosecutorial agency, information
concerning the commission of an offense under the jurisdiction of that agency discovered
by when the Department during has initiated a criminal
investigation of the taxpayer.
…
(25) To provide public access to a database containing the names and registration numbers of retailers who are registered to collect sales and use taxes under Article 5 of this Chapter.
…
(29) To provide to the
Economic Investment Committee established pursuant to G.S. 143B‑437.48
G.S. 143B‑437.54 information necessary to implement Part
2F of Article 10 of Chapter 143B of the General Statutes.economic
development programs under the responsibility of the Committee.
…."
SECTION 20. Section 6A.3(d) of S.L. 2012‑142 reads as rewritten:
"SECTION 6A.3.(d) Funding.
– Of funds generated from increased revenues or cost savings as compared to the
baselines established by subdivision (1) of subsection (c) of this section, in
the General Fund, the Highway Fund, and that State portion of the
Unauthorized Substance Tax collections of the Special Revenue Fund, the sum of
up to a total of sixteen million dollars ($16,000,000) may be used authorized
by the Office of State Budget and Management to make purchases related to
the implementation of the additional public‑private arrangement
authorized by this section, including payment for services from non‑State
entities."
SECTION 21. G.S. 105‑113.112 reads as rewritten:
"§ 105‑113.112. Confidentiality of information.
(a) Information
obtained by the Department in the course of administering the tax imposed by
this Article, including information on whether the Department has issued a revenue
stamp to a person, is confidential tax information and is subject to the following
restrictions on disclosure:
(1) G.S. 105‑259
prohibits the disclosure of the information, except in the limited
circumstances provided in that statute.
(2) The information
provisions of G.S. 105‑259.
(b) Information
obtained by the Department from the taxpayer in the course of administering the
tax imposed by this Article, including information on whether the Department
has issued a revenue stamp to a person, may not be used as evidence, as
defined in G.S. 15A‑971, by a prosecutor in a criminal
prosecution of the taxpayer for an offense other than an offense
under this Article or under Article 9 of this Chapter. related to the manufacturing,
possession, transportation, distribution, or sale of the unauthorized
substance. Under this prohibition, no officer, employee, or agent of the
Department may testify about thethis information in a criminal
prosecution of the taxpayer for an offense related to the
manufacturing, possession, transportation, distribution, or sale of the
unauthorized substance.other than an offense under this Article or under
Article 9 of this Chapter. This subdivision subsection implements
the protections against double jeopardy and self‑incrimination set out in
Amendment V of the United States Constitution and the restrictions in it apply
regardless of whether information may be disclosed under G.S. 105‑259.
This subdivision does not apply to information obtained from a source other
than an employee, officer, or agent of the Department. This subdivision does
not prohibit testimony by an officer, employee, or agent of the Department
concerning an offense committed against that individual in the course of
administering this Article. An officer, employee, or agent of the
Department who provides evidence or testifies in violation of this subdivision
is guilty of a Class 1 misdemeanor."
SECTION 22.(a) G.S. 105‑113.4A reads as rewritten:
"§ 105‑113.4A. Licenses.
(a) General. – To obtain a
license required by this Article, an applicant must apply to file an
application with the Secretary on a form provided by the Secretary and
pay the tax due for the license. An application must include the applicant's
name, address, federal employer identification number, and any other
information required by the Secretary. A license is not transferable or
assignable and must be displayed at the place of business for which it is
issued.
(b) Requirements. – An applicant for a license must meet the following requirements:
(1) If the applicant is a corporation, the applicant must either be incorporated in this State or be authorized to transact business in this State.
(2) If the applicant for a license is a limited liability company, the applicant must either be organized in this State or be authorized to transact business in this State.
(3) If the applicant for a license is a limited partnership, the applicant must either be formed in this State or be authorized to transact business in this State.
(4) If the applicant for a license is an individual or a general partnership, the applicant must designate an agent for service of process and give the agent's name and address.
(c) Denial. – The Secretary may investigate an applicant for a license required under this Article to determine if the information the applicant submits with the application is accurate and if the applicant is eligible to be licensed under this Article. The Secretary may refuse to issue a license to an applicant that has done any of the following:
(1) Submitted false or misleading information on its application.
(2) Had a license issued under this Article cancelled by the Secretary for cause.
(3) Had a tobacco products license or registration issued by another state cancelled for cause.
(4) Been convicted of fraud or misrepresentation.
(5) Been convicted of any other offense that indicates the applicant may not comply with this Article if issued a license.
(6) Failed to remit payment for a tax debt under this Chapter. The term "tax debt" has the same meaning as defined in G.S. 105‑243.1.
(7) Failed to file a return due under this Chapter.
(b)(d) Refund. – A
refund of a license tax is allowed only when the tax was collected or paid in
error. No refund is allowed when a license holder surrenders a license or the
Secretary revokes a license.
(c)(e) Duplicate
or Amended License. – Upon application to the Secretary, a license holder may
obtain without charge one of the following:a duplicate or amended
license as provided in this subsection. A duplicate or amended license must state
that it is a duplicate or amended license, as appropriate.
(1) A duplicate license, if the license holder establishes that the original license has been lost, destroyed, or defaced.
(2) An amended license, if the license holder establishes that the location of the place of business for which the license was issued has changed.
A duplicate or amended license
shall state that it is a duplicate or amended license, as appropriate.
(f) Information on License. – The Secretary must include the following information on each license required by this Article:
(1) The legal name of the license holder.
(2) The name under which the license holder conducts business.
(3) The physical address of the place of business of the license holder.
(4) The account number assigned to the license by the Department.
(g) Records. – The Secretary must keep a record of the following:
(1) Applicants for a license under this Article.
(2) Persons to whom a license has been issued under this Article.
(3) Persons that hold a current license issued under this Article, by license category.
(h) Lists. – The Secretary must provide the list required under subsection (g) of this section upon request of a manufacturer that is a license holder under this Article. The list must state the name, account number, and business address of each license holder on the list."
SECTION 22.(b) G.S. 105‑113.4B reads as rewritten:
"§ 105‑113.4B. Reasons why the Secretary can cancel a license.
(a) Reasons. – The Secretary may cancel a license issued under this Article upon the written request of the license holder. The Secretary may summarily cancel the license of a license holder when the Secretary finds that the license holder is incurring liability for the tax imposed under this Article after failing to pay a tax when due under this Article. In addition, the Secretary may cancel the license of a license holder that commits one or more of the following acts after holding a hearing on whether the license should be cancelled:
(1) A violation of this
Article.Fails to obtain a license required by this Article.
(2) Willfully fails to file a return required by this Article.
(3) Willfully fails to pay a tax when due under this Article.
(4) Makes a false statement in an application or return required under this Article.
(5) Fails to keep records as required by this Article.
(6) Refuses to allow the Secretary or a representative of the Secretary to examine the person's books, accounts, and records concerning tobacco product.
(7) Fails to disclose the correct amount of tobacco product taxable in this State.
(8) Fails to file a replacement bond or an additional bond if required by the Secretary under this Article.
(2)(9) A
violation of Violates G.S. 14‑401.18.
(b) Procedure. – The Secretary must send a person whose license is summarily cancelled a notice of the cancellation and must give the person an opportunity to have a hearing on the cancellation within 10 days after the cancellation. The Secretary must give a person whose license may be cancelled after a hearing at least 10 days' written notice of the date, time, and place of the hearing. A notice of a summary license cancellation and a notice of hearing must be sent by registered mail to the last known address of the license holder.
(c) Release of Bond. – When the Secretary cancels a license and the license holder has paid all taxes and penalties due under this Article, the Secretary must take one of the following actions concerning a bond or an irrevocable letter of credit filed by the license holder:
(1) Return an irrevocable letter of credit to the license holder.
(2) Return a bond to the license holder or notify the person liable on the bond and the license holder that the person is released from liability on the bond."
SECTION 22.(c) G.S. 105‑113.13 reads as rewritten:
"§
105‑113.13. Secretary may investigate applicant for distributor's
license and require a bond.bond or irrevocable letter of credit.
(a) Investigation.
– The Secretary may investigate an applicant for a distributor's license to
determine if the information the applicant submits with the application is
accurate and if the applicant is eligible to be licensed as a distributor. The
Secretary may decline to issue a distributor's license to an applicant when the
Secretary has reasonable cause to believe any of the following:
(1) That the
applicant has willfully withheld information requested by the Secretary for the
purpose of determining the applicant's eligibility for the license.
(2) That
information submitted with the application is false or misleading.
(3) That the
application is not made in good faith.
(b) Bond. – The
Secretary may require a distributor to furnish a bond in an amount that
adequately protects the State from loss if the distributor fails to pay taxes
due under this Part. A bond shall be conditioned on compliance with this Part,
shall be payable to the State, and shall be in the form required by the
Secretary. The Secretary shall set the bond amount based on the anticipated tax
liability of the distributor. The Secretary shall periodically review the
sufficiency of bonds required of the distributor and shall increase the amount
of a required bond if the bond amount no longer covers the anticipated tax
liability of the distributor. The Secretary shall decrease the amount of a
required bond if the Secretary finds that a lower bond amount will protect the
State adequately from loss. For purposes of this section, a bond may also
include an irrevocable letter of credit."
SECTION 22.(d) This section becomes effective September 1, 2013.
SECTION 23.(a) G.S. 105‑164.3 reads as rewritten:
"§ 105‑164.3. Definitions.
The following definitions apply in this Article:
(1) Advertising and promotional direct mail. – Printed material that meets the definition of "direct mail" and the primary purpose of which is to attract public attention to a product, person, business, or organization, or to attempt to sell, popularize, or secure financial support for a product, person, business, or organization. As used in this subdivision, "product" means tangible personal property, digital property, or a service.
(1)(1a) Analytical
services. – Testing laboratories that are included in national industry 541380
of NAICS or medical laboratories that are included in national industry 621511
of NAICS.
(1a)(1b) Ancillary
service. – A service associated with or incidental to the provision of a
telecommunications service. The term includes detailed communications billing,
directory assistance, vertical service, and voice mail service. A vertical
service is a service, such as call forwarding, caller ID, three‑way
calling, and conference bridging, that allows a customer to identify a caller
or manage multiple calls and call connections.
(1b)(1c) through (1d)(1e)
Reserved for future codification purposes.
(1e)(1f) Audio
work. – A series of musical, spoken, or other sounds, including a ringtone.
(1f)(1g) Reserved
for future codification purposes.
(1g)(1h) Audiovisual
work. – A series of related images and any sounds accompanying the images that
impart an impression of motion when shown in succession.
(1h)(1i) Reserved for
future codification purposes.
(1i)(1j) Bundled
transaction. – A retail sale of two or more distinct and identifiable products,
at least one of which is taxable and one of which is exempt, for one
nonitemized price. Products are not sold for one nonitemized price if an
invoice or another sales document made available to the purchaser separately
identifies the price of each product. A bundled transaction does not include
the retail sale of any of the following:
a. A product and any packaging item that accompanies the product and is exempt under G.S. 105‑164.13(23).
b. A sale of two or more products whose combined price varies, or is negotiable, depending on the products the purchaser selects.
c. A sale of a product accompanied by a transfer of another product with no additional consideration.
d. A product and the delivery or installation of the product.
e. A product and any service necessary to complete the sale.
(1j)(1k) Reserved
for future codification purposes.
(1k)(1l) Business.
– An activity a person engages in or causes another to engage in with the
object of gain, profit, benefit, or advantage, either direct or indirect. The
term does not include an occasional and isolated sale or transaction by a
person who does not claim to be engaged in business.
(1l)(1m) Reserved
for future codification purposes.
(1m)(1n) Cable
service. – The one‑way transmission to subscribers of video programming
or other programming service and any subscriber interaction required to select
or use the service.
...
(25a) Other direct mail. – Any direct mail that is not advertising and promotional mail regardless of whether advertising and promotional direct mail is included in the same mailing.
(25a)(25b) Over‑the‑counter
drug. – A drug that contains a label that identifies the product as a drug as
required by 21 C.F.R. § 201.66. The label includes either of the following:
a. A "Drug Facts" panel.
b. A statement of its active ingredients with a list of those ingredients contained in the compound, substance, or preparation.
…."
SECTION 23.(b) G.S. 105‑164.4B(d) reads as rewritten:
"(d) Exceptions. – This section does not apply to the following:
(1) Telecommunications services. – Telecommunications services are sourced in accordance with G.S. 105‑164.4C.
(2) Direct mail. – Direct
mailthat meets one of the following descriptions is sourced to the location
where the property is delivered, and direct mail that does not meet one of
these descriptions is sourced to the location from which the direct mail was
shipped:
a. Direct mail
purchased pursuant to a direct pay permit.
b. When the
purchaser provides the seller with information to show the jurisdictions to
which the direct mail is to be delivered.
is sourced in accordance with G.S. 105‑164.4E.
(3) Florist wire sale. – A florist wire sale is sourced to the business location of the florist that takes an order for the sale. A "florist wire sale" is a sale in which a retail florist takes a customer's order and transmits the order to another retail florist to be filled and delivered."
SECTION 23.(c) Article 5 of Chapter 105 of the General Statutes is amended by adding the following new section to read:
"§ 105‑164.4E. Direct Mail.
(a) Advertising and Promotional Direct Mail. – The following sourcing principles apply to advertising and promotional direct mail.
(1) To the location where the direct mail is delivered if it is purchased pursuant to a direct pay permit issued under G.S. 105‑164.27A(a1), or if it is purchased with an exemption certificate claiming direct mail and bearing the direct mail permit number issued under G.S. 105‑164.27A(a1).
(2) To the location where the direct mail is delivered if the purchaser provides the seller with information to show the jurisdictions to which the direct mail is to be delivered.
(3) To the location from which the direct mail was shipped if subdivision (1) or (2) of this subsection does not apply.
(b) Other Direct Mail. – The following sourcing principles apply to other direct mail:
(1) To the location indicated by an address for the purchaser that is available from the business records of the seller that are maintained in the ordinary course of the seller's business when use of this address does not constitute bad faith.
(2) To the jurisdictions where the direct mail is delivered if it is purchased pursuant to a direct pay permit issued under G.S. 105‑164.27A(a1), or if it is purchased with an exemption certificate claiming direct mail and bearing the direct mail permit number issued under G.S. 105‑164.27A(a1).
(c) Relief From Liability. – In the absence of bad faith, a seller is relieved of:
(1) All obligations to collect, pay, or remit any tax on any direct mail transaction where the purchaser issues a direct pay permit issued under G.S. 105‑164.27A(a1), or if it is purchased with an exemption certificate claiming direct mail and bearing the direct mail permit number issued under G.S. 105‑164.27A(a1).
(2) Further obligation to collect any additional tax on the sale of advertising and promotional direct mail where the seller sourced the sale according to delivery information provided by the purchaser."
additional changes
SECTION 30. G.S. 62A‑54(a) reads as rewritten:
"(a) Retail Collection.
– A seller of prepaid wireless telecommunications service shall collect the 911
service charge for prepaid wireless telecommunications service from the
consumer on each retail transaction occurring in this State. The 911 service
charge for prepaid wireless telecommunications service is in addition to the
sales tax imposed on the sale or recharge of prepaid telephone calling service
under G.S. 105‑164.4(4d)G.S. 105‑164.4(a)(4d).
The amount of the 911 service charge for prepaid wireless telecommunications
service must be separately stated on an invoice, receipt, or other reasonable
notification provided to the consumer by the seller at the time of the retail
transaction. For purposes of this Article, a retail transaction is occurring in
this State if the sale is sourced to this State under G.S. 105‑164.4B(a)."
SECTION 31. G.S. 66‑255 reads as rewritten:
"§ 66‑255. Specialty market or operator of an event registration list.
A specialty market operator or
operator of an event where space is provided to a vendor must maintain a
daily registration list of all specialty market or other vendors selling
or offering goods for sale at the specialty market. market or other
event. The registration list must clearly and legibly show each specialty
market vendor's name, permanent address, and certificate of registration
number. The specialty market operator or other event operator must
require each specialty market vendor to exhibit a valid certificate of
registration for visual inspection by the specialty market operator or other
event operator at the time of registration, and must require each specialty
market vendor to keep the certificate of registration conspicuously and
prominently displayed, so as to be visible for inspection by patrons of the specialty
marketvendor at the places or locations at which the goods are offered for
sale. Each daily registration list maintained pursuant to this section must be
retained by the specialty market operator or other event operator for no
less than two years and must at any time be made available upon request to any
law enforcement officer.officer or the Secretary of Revenue or the
Secretary's duly authorized agent. For purposes of the registration list, the
exemptions in G.S. 66‑256 do not apply."
SECTION 32. G.S. 105‑129.16H is amended by adding a new subsection to read:
"(d) Sunset. – This section is repealed as of the date that G.S. 105‑129.16A is repealed. The repeal applies to donations made for renewable energy property placed in service on or after the date the section is repealed."
SECTION 33. G.S. 105‑129.26(c) reads as rewritten:
"(c) Forfeiture. – If
the owner of a large or major recycling facility fails to make the
required minimum investment or create the required number of new jobs within
the period certified by the Secretary of Commerce under this section, the
recycling facility no longer qualifies for the applicable recycling facility
tax benefits provided in this Article and in Article 5 of this Chapter and
forfeits all tax benefits previously received under those Articles. Forfeiture
does not occur, however, if the failure was due to events beyond the owner's
control. Upon forfeiture of tax benefits previously received, the owner is
liable under Part 1 of Article 4 of this Chapter for a tax equal to the amount
of all past taxes under Articles 3, 4, and 5 previously avoided as a result of
the tax benefits received plus interest at the rate established in G.S. 105‑241.21,
computed from the date the taxes would have been due if the tax benefits had
not been received. The tax and interest are due 30 days after the date of the
forfeiture. An owner that fails to pay the tax and interest is subject to the
penalties provided in G.S. 105‑236."
SECTION 34.(a) G.S. 105‑130.5, as amended by S.L. 2013‑10, reads as rewritten:
"§ 105‑130.5. Adjustments to federal taxable income in determining State net income.
(a) The following additions to federal taxable income shall be made in determining State net income:
…
(15) For taxable
years 2002‑2005, the applicable percentage of the amount allowed as a
special accelerated depreciation deduction under section 168(k) or section
1400L of the Code, as set out in the table below. In addition, a taxpayer who
was allowed a special accelerated depreciation deduction under section 168(k)
or section 1400L of the Code in a taxable year beginning before January 1,
2002, and whose North Carolina taxable income in that earlier year reflected
that accelerated depreciation deduction must add to federal taxable income in
the taxpayer's first taxable year beginning on or after January 1, 2002, an
amount equal to the amount of the deduction allowed in the earlier taxable
year. These adjustments do not result in a difference in basis of the affected
assets for State and federal income tax purposes. The applicable percentage is
as follows:
Taxable Year Percentage
2002 100%
2003 70%
2004 70%
2005 0%
(15a) The applicable
percentage of the amount allowed as a special accelerated depreciation
deduction under section 168(k) or 168(n) of the Code for property placed in
service after December 31, 2007, but before January 1, 2010. The applicable
percentage under this subdivision is eighty‑five percent (85%).
In
addition, a taxpayer who was allowed a special accelerated depreciation
deduction in taxable year 2007 or 2008 for property placed in service during
that year, and whose North Carolina taxable income for that year reflected that
accelerated depreciation deduction must make the adjustments set out below.
These adjustments do not result in a difference in basis of the affected assets
for State and federal income tax purposes.
a. A taxpayer
must add to federal taxable income in the taxpayer's 2008 taxable year an
amount equal to the applicable percentage of the accelerated depreciation
deduction reflected in the taxpayer's 2007 North Carolina taxable income.
b. A taxpayer
must add to federal taxable income in the taxpayer's 2009 taxable year an
amount equal to the applicable percentage of the accelerated depreciation
deduction reflected in the taxpayer's 2008 North Carolina taxable income.
(15b) For taxable
years 2010 through 2013, eighty‑five percent (85%) of the amount allowed
as a special accelerated depreciation deduction under section 168(k) or 168(n)
of the Code for property placed in service during the taxable year. In
addition, for taxable year 2010, a taxpayer who placed property in service during
the 2009 taxable year and whose North Carolina taxable income for the 2009
taxable year reflected a special accelerated depreciation deduction allowed for
the property under section 168(k) of the Code must add eighty‑five
percent (85%) of the amount of the special accelerated depreciation deduction.
These adjustments do not result in a difference in basis of the affected assets
for State and federal income tax purposes.
…
(23) For taxable
years 2010 and 2011, eighty‑five percent (85%) of the amount by which the
taxpayer's expense deduction under section 179 of the Code for property placed
in service in taxable year 2010 or 2011 exceeds the amount that would have been
allowed for the respective taxable year under section 179 of the Code as of May
1, 2010. For purposes of this subdivision, the definition of section 179
property has the same meaning as under section 179 of the Code as of January 1,
2011. These adjustments do not result in a difference in basis of the affected
assets for State and federal income tax purposes.
(23a) For taxable
years 2012 and 2013, eighty‑five percent (85%) of the amount by which the
taxpayer's expense deduction under section 179 of the Code for property placed
in service in taxable year 2012 or 2013 exceeds the amount that would have been
allowed for the respective taxable year under section 179 of the Code as of May
1, 2010. For purposes of this subdivision, the definition of section 179
property has the same meaning as under section 179 of the Code as of January 2,
2013. These adjustments do not result in a difference in basis of the affected
assets for State and federal income tax purposes.
(24) The amount required to be added under G.S. 105‑130.5B when the State decouples from federal accelerated depreciation and expensing.
(b) The following deductions from federal taxable income shall be made in determining State net income:
…
(21) In each of the
taxpayer's first five taxable years beginning on or after January 1, 2005, an
amount equal to twenty percent (20%) of the amount added to taxable income in a
previous year as accelerated depreciation under subdivision (a)(15) of this
section.
(21a) An amount equal
to twenty percent (20%) of the amount added to federal taxable income as
accelerated depreciation under subdivision (a)(15a) of this section. For a
taxpayer who made the addition for accelerated depreciation in the 2008 taxable
year, the deduction allowed by this subdivision applies to the first five
taxable years beginning on or after January 1, 2009. For a taxpayer who made the
addition for accelerated depreciation in the 2009 taxable year, the deduction
allowed by this subdivision applies to the first five taxable years beginning
on or after January 1, 2010.
(21b) An amount equal
to twenty percent (20%) of the amount added to federal taxable income as
accelerated depreciation under subdivision (a)(15b) of this section. For the
amount added to taxable income in the 2010 taxable year, the deduction allowed
by this subdivision applies to the first five taxable years beginning on or
after January 1, 2011. For the amount added to taxable income in the 2011
taxable year, the deduction allowed by this subdivision applies to the first
five taxable years beginning on or after January 1, 2012. For the amount added
to taxable income in the 2012 taxable year, the deduction allowed by this
subdivision applies to the first five taxable years beginning on or after
January 1, 2013. For the amount added to taxable income in the 2013 taxable
year, the deduction allowed by this subdivision applies to the first five
taxable years beginning on or after January 1, 2014.
…
(26) An amount equal
to twenty percent (20%) of the amount added to federal taxable income under
subdivision (a)(23) of this section. For the amount added to taxable income in
the 2010 taxable year, the deduction allowed by this subdivision applies to the
first five taxable years beginning on or after January 1, 2011. For the amount
added to taxable income in the 2011 taxable year, the deduction allowed by this
subdivision applies to the first five taxable years beginning on or after
January 1, 2012.
(26a) An amount equal
to twenty percent (20%) of the amount added to federal taxable income under
subdivision (a)(23a) of this section. For the amount added to taxable income in
the 2012 taxable year, the deduction allowed by this subdivision applies to the
first five taxable years beginning on or after January 1, 2013. For the amount
added to taxable income in the 2013 taxable year, the deduction allowed by this
subdivision applies to the first five taxable years beginning on or after
January 1, 2014.
(27) The amount allowed as a deduction under G.S. 105‑130.5B as a result of an add‑back for federal accelerated depreciation and expensing.
…."
SECTION 34.(b) Part 1 of Article 4 of Chapter 105 of the General Statutes is amended by adding a new section to read:
"§ 105‑130.5B. Adjustments when State decouples from federal accelerated depreciation and expensing.
(a) Special Accelerated Depreciation. – A taxpayer who takes a special accelerated depreciation deduction for property under section 168(k) or 168(n) of the Code must add to the taxpayer's federal taxable income eighty‑five percent (85%) of the amount taken for that year under those Code provisions. A taxpayer is allowed to deduct twenty percent (20%) of the add‑back in each of the first five taxable years following the year the taxpayer is required to include the add‑back in income.
(b) 2009 Depreciation Exception. – A taxpayer who placed property in service during the 2009 taxable year and whose North Carolina taxable income for the 2009 taxable year reflected a special accelerated depreciation deduction allowed for the property under section 168(k) of the Code must add eighty‑five percent (85%) of the amount of the special accelerated depreciation deduction to its federal taxable income for the 2010 taxable year. A taxpayer is allowed to deduct this add‑back under subsection (a) of this section as if it were for property placed in service in 2010.
(c) Section 179 Expense. – For purposes of this subdivision, the definition of section 179 property has the same meaning as under section 179 of the Code as of January 2, 2013. A taxpayer who places section 179 property in service during a taxable year listed in the table below must add to the taxpayer's federal taxable income eighty‑five percent (85%) of the amount by which the taxpayer's expense deduction under section 179 of the Code exceeds the dollar and investment limitation listed in the table below for the taxable year.
A taxpayer is allowed to deduct twenty percent (20%) of the add‑back in each of the first five taxable years following the year the taxpayer is required to include the add‑back in income.
Taxable Year of Dollar Limitation Investment Limitation
85% Add‑Back
2010 $250,000 $800,000
2011 $250,000 $800,000
2012 $250,000 $800,000
2013 $25,000 $125,000
(d) 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, except as modified in subsection (e) of this section.
(e) Bonus Asset Basis. – In the event of an actual or deemed transfer of an asset occurring on or after January 1, 2013, wherein the tax basis of the asset carries over from the transferor to the transferee for federal income tax purposes, the transferee must add any remaining deductions allowed under subsection (a) of this section to the basis of the transferred asset and depreciate the adjusted basis over any remaining life of the asset. Notwithstanding the provisions of subsection (a) of this section, the transferor is not allowed any remaining future bonus depreciation deductions associated with the transferred asset.
(f) Prior Transactions. – For any transaction meeting the requirements of subsection (e) of this section prior to January 1, 2013, the transferor and transferee can make an election to make the basis adjustment allowed in that subsection on the transferee's 2013 tax return, to the extent that the transferor has not taken the bonus depreciation deduction on a prior return and provided that the transferor certifies in writing to the transferee that the transferor will not take any remaining deductions allowed under subsection (a) of this section for tax years beginning on or after January 1, 2013, for depreciation associated with the transferred asset."
SECTION 34.(c) G.S. 105‑134.6, as amended by S.L. 2013‑10, reads as rewritten:
"§ 105‑134.6. Modifications to adjusted gross income.
…
(b) Other Deductions. – In calculating North Carolina taxable income, a taxpayer may deduct any of the following items to the extent those items are included in the taxpayer's adjusted gross income.
…
(17) In each of the
taxpayer's first five taxable years beginning on or after January 1, 2005, an
amount equal to twenty percent (20%) of the amount added to taxable income in a
previous year as accelerated depreciation under subdivision (c)(8) of this
section.
(17a) An amount equal
to twenty percent (20%) of the amount added to federal taxable income as
accelerated depreciation under subdivision (c)(8a) of this section. For a
taxpayer who made the addition for accelerated depreciation in the 2008 taxable
year, the deduction allowed by this subdivision applies to the first five
taxable years beginning on or after January 1, 2009. For a taxpayer who made
the addition for accelerated depreciation in the 2009 taxable year, the
deduction allowed by this subdivision applies to the first five taxable years
beginning on or after January 1, 2010.
(17b) An amount equal
to twenty percent (20%) of the amount added to federal taxable income as
accelerated depreciation under subdivision (c)(8b) of this section. For the
amount added to adjusted gross income in the 2010 taxable year, the deduction
allowed by this subdivision applies to the first five taxable years beginning
on or after January 1, 2011. For the amount added to taxable income in the 2011
taxable year, the deduction allowed by this subdivision applies to the first
five taxable years beginning on or after January 1, 2012. For the amount added
to taxable income in the 2012 taxable year, the deduction allowed by this
subdivision applies to the first five taxable years beginning on or after
January 1, 2013.For the amount added to adjusted gross income in the 2013
taxable year, the deduction allowed by this subdivision applies to the first
five taxable years beginning on or after January 1, 2014.
…
(21) An amount equal
to twenty percent (20%) of the amount added to federal taxable income under
subdivision (c)(15) of this section. For the amount added to taxable income in
the 2010 taxable year, the deduction allowed by this subdivision applies to the
first five taxable years beginning on or after January 1, 2011. For the amount
added to taxable income in the 2011 taxable year, the deduction allowed by this
subdivision applies to the first five taxable years beginning on or after
January 1, 2012.
(21a) An amount equal
to twenty percent (20%) of the amount added to adjusted gross income under
subdivision (c)(15a) of this section. For the amount added to adjusted gross
income in the 2012 taxable year, the deduction allowed by this subdivision
applies to the first five taxable years beginning on or after January 1, 2013.
For the amount added to adjusted gross income in the 2013 taxable year, the
deduction allowed by this subdivision applies to the first five taxable years
beginning on or after January 1, 2014.
…
(23) The amount allowed as a deduction under G.S. 105‑134.6A as a result of an add‑back for federal accelerated depreciation and expensing.
(c) Additions. – In calculating North Carolina taxable income, a taxpayer must add any of the following items to the extent those items are not included in the taxpayer's adjusted gross income. For a taxpayer who deducts the itemized deductions amount under subsection (a2) of this section, the taxpayer must add any of the following items to the extent those items are included in the itemized deductions amount.
…
(8) For taxable
years 2002‑2005, the applicable percentage of the amount allowed as a
special accelerated depreciation deduction under section 168(k) or section
1400L of the Code, as set out in the table below. In addition, a taxpayer who
was allowed a special accelerated depreciation deduction under section 168(k)
or section 1400L of the Code in a taxable year beginning before January 1,
2002, and whose North Carolina taxable income in that earlier year reflected
that accelerated depreciation deduction must add to federal taxable income in
the taxpayer's first taxable year beginning on or after January 1, 2002, an
amount equal to the amount of the deduction allowed in the earlier taxable
year. These adjustments do not result in a difference in basis of the affected
assets for State and federal income tax purposes. The applicable percentage is
as follows:
Taxable Year Percentage
2002 100%
2003 70%
2004 70%
2005 0%
(8a) The applicable
percentage of the amount allowed as a special accelerated depreciation
deduction under section 168(k) or 168(n) of the Code for property placed in
service after December 31, 2007, but before January 1, 2010. The applicable
percentage under this subdivision is eighty‑five percent (85%).
In
addition, a taxpayer who was allowed a special accelerated depreciation
deduction in taxable year 2007 or 2008 for property placed in service during
that year, and whose North Carolina taxable income for that year reflected that
accelerated depreciation deduction must make the adjustments set out below.
These adjustments do not result in a difference in basis of the affected assets
for State and federal income tax purposes.
a. A taxpayer
must add to federal taxable income in the taxpayer's 2008 taxable year an
amount equal to the applicable percentage of the accelerated depreciation
deduction reflected in the taxpayer's 2007 North Carolina taxable income.
b. A taxpayer
must add to federal taxable income in the taxpayer's 2009 taxable year an
amount equal to the applicable percentage of the accelerated depreciation
deduction reflected in the taxpayer's 2008 North Carolina taxable income.
(8b) For taxable
years 2010 through 2013, eighty‑five percent (85%) of the amount allowed
as a special accelerated depreciation deduction under section 168(k) or 168(n)
of the Code for property placed in service during the taxable year. In
addition, for taxable year 2010, a taxpayer who placed property in service
during the 2009 taxable year and whose North Carolina taxable income for the
2009 taxable year reflected a special accelerated depreciation deduction
allowed for the property under section 168(k) of the Code must add eighty‑five
percent (85%) of the amount of the special accelerated depreciation deduction.
These adjustments do not result in a difference in basis of the affected assets
for State and federal income tax purposes.
…
(15) For taxable
years 2010 and 2011, eighty‑five percent (85%) of the amount by which the
taxpayer's expense deduction under section 179 of the Code for property placed
in service in taxable year 2010 or 2011 exceeds the amount that would have been
allowed for the respective taxable year under section 179 of the Code as of May
1, 2010. For purposes of this subdivision, the definition of section 179
property has the same meaning as under section 179 of the Code as of January 1,
2011. These adjustments do not result in a difference in basis of the affected
assets for State and federal income tax purposes.(15a) For taxable years 2012
and 2013, eighty‑five percent (85%) of the amount by which the taxpayer's
expense deduction under section 179 of the Code for property placed in service
in taxable year 2012 or 2013 exceeds the amount that would have been allowed
for the respective taxable year under section 179 of the Code as of May 1,
2010. For purposes of this subdivision, the definition of section 179 property
has the same meaning as under section 179 of the Code as of January 2, 2013.
These adjustments do not result in a difference in basis of the affected assets
for State and federal income tax purposes.
(15a) For taxable
years 2012 and 2013, eighty five percent (85%) of the amount by which the
taxpayer's expense deduction under section 179 of the Code for property placed
in service in taxable year 2012 or 2013 exceeds the amount that would have been
allowed for the respective taxable year under section 179 of the Code as of May
1, 2010. For purposes of this subdivision, the definition of section 179
property has the same meaning as under section 179 of the Code as of January 2,
2013. These adjustments do not result in a difference in basis of the affected
assets for State and federal income tax purposes.
(22) The amount required to be added under G.S. 105‑134.6A when the State decouples from federal accelerated depreciation and expensing.
…."
SECTION 34.(d) Part 2 of Article 4 of Chapter 105 of the General Statutes is amended by adding a new section to read:
"§ 105‑134.6A. Adjustments when State decouples from federal accelerated depreciation and expensing.
(a) Special Accelerated Depreciation. – A taxpayer who takes a special accelerated depreciation deduction for that property under section 168(k) or 168(n) of the Code must add to the taxpayer's federal taxable income or adjusted gross income, as appropriate, eighty‑five percent (85%) of the amount taken for that year under those Code provisions. For taxable years before 2012, the taxpayer must add the amount to the taxpayer's federal taxable income. For taxable year 2012 and after, the taxpayer must add the amount to the taxpayer's adjusted gross income. A taxpayer is allowed to deduct twenty percent (20%) of the add‑back in each of the first five taxable years following the year the taxpayer is required to include the add‑back in income.
(b) 2009 Depreciation Exception. – A taxpayer who placed property in service during the 2009 taxable year and whose North Carolina taxable income for the 2009 taxable year reflected a special accelerated depreciation deduction allowed for the property under section 168(k) of the Code must add eighty‑five percent (85%) of the amount of the special accelerated depreciation deduction to its federal taxable income for the 2010 taxable year. A taxpayer is allowed to deduct this add‑back under subsection (a) of this section as if it were for property placed in service in 2010.
(c) Section 179 Expense. – For purposes of this subdivision, the definition of section 179 property has the same meaning as under section 179 of the Code as of January 2, 2013. A taxpayer who places section 179 property in service during a taxable year listed in the table below must add to the taxpayer's federal taxable income or adjusted gross income, as appropriate, eighty‑five percent (85%) of the amount by which the taxpayer's expense deduction under section 179 of the Code exceeds the dollar and investment limitation listed in the table below for that taxable year. For taxable years before 2012, the taxpayer must add the amount to the taxpayer's federal taxable income. For taxable year 2012 and after, the taxpayer must add the amount to the taxpayer's adjusted gross income.
A taxpayer is allowed to deduct twenty percent (20%) of the add‑back in each of the first five taxable years following the year the taxpayer is required to include the add‑back in income.
Taxable Year of Dollar Limitation Investment Limitation
85% Add‑Back
2010 $250,000 $800,000
2011 $250,000 $800,000
2012 $250,000 $800,000
2013 $25,000 $125,000
(d) 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, except as modified in subsection (e) of this section.
(e) Bonus Asset Basis. – In the event of an actual or deemed transfer of an asset occurring on or after January 1, 2013, wherein the tax basis of the asset carries over from the transferor to the transferee for federal income tax purposes, the transferee must add any remaining deductions allowed under subsection (a) of this section to the basis of the transferred asset and depreciate the adjusted basis over any remaining life of the asset. Notwithstanding the provisions of subsection (a) of this section, the transferor and any owner in a transferor are not allowed any remaining future bonus depreciation deductions associated with the transferred asset. This subsection applies only to the extent that each transferor or owner in a transferor that added bonus depreciation to its federal taxable income or adjusted gross income associated with the transferred asset certifies in writing to the transferee, that the transferor or owner in a transferor will not take any remaining future bonus depreciation deduction associated with the transferred asset.
(f) Prior Transactions. – For any transaction meeting the requirements of subsection (e) of this section prior to January 1, 2013, the transferor and transferee can make an election to make the basis adjustment allowed in that subsection on the transferee's 2013 tax return, to the extent that the transferor and any owner in a transferor has not taken the bonus depreciation deduction on a prior return and provided that the transferor is not allowed any remaining future bonus depreciation deductions associated with the transferred asset and each transferor or owner in a transferor certifies in writing to the transferee that the transferor or owner in a transferor will not take any remaining deductions allowed under subsection (a) of this section for tax years beginning on or after January 1, 2013, for depreciation associated with the transferred asset. The amount of the basis adjustment under this subsection is limited to the total remaining future bonus depreciation deductions forfeited by the transferor and any owner in the transferor at the time of the transfer.
(g) Tax Basis. – For transactions described in subsection (e) or (f) of this section, adjusted gross income must be increased or decreased to account for any difference in the amount of depreciation, amortization, or gains or losses applicable to property that has been depreciated or amortized by use of a different basis or rate for State income tax purposes than used for federal income tax purposes prior to the effective date of this section.
(h) Definitions. – For purposes of this section, a ''transferor'' is an individual, partnership, S Corporation, limited liability company, or an estate or trust that does not fully distribute income to its beneficiaries, and an ''owner in a transferor'' is a partner, shareholder, member, or beneficiary subject to tax under Part 2 or 3 of Article 4 of this Chapter, of a transferor."
SECTION 35.(a) G.S. 105‑134.6(d)(23), as enacted by S.L. 2013‑10, reads as rewritten:
"(23)(10) For
taxable year 2013, the taxpayer who elects to itemize deductions under G.S. 105‑134.6(a2)
may deduct the amount that would have been allowed as a charitable
deduction under section 170 of the Code had the taxpayer not elected to take
the income exclusion under 408(d)(8) of the Code. However, this deduction is
not subject to the charitable contribution limitation and carryover provisions
under section 170 of the Code, but it is subject to the overall limitation on
itemized deductions under section 68 of the Code."
SECTION 35.(b) This section is effective for taxable years beginning on or after January 1, 2013.
SECTION 36. G.S. 105‑130.6A(a) reads as rewritten:
"(a) Definitions. – The
provisions of G.S. 105‑130.6 definitions in G.S. 105‑130.2
govern the determination of whether a corporation is a subsidiary or an
affiliate of another corporation. In addition, the following definitions apply
in this section:
(1) Affiliated group. – A group that includes a corporation, all other corporations that are affiliates or subsidiaries of that corporation, and all other corporations that are affiliates or subsidiaries of another corporation in the group.
(2) Bank holding company. – A holding company with an affiliate that is subject to the privilege tax on banks levied in G.S. 105‑102.3.
(3) Dividends. – Dividends received that are not taxed under this Part.
(4) Electric power holding company. – A holding company with an affiliate or a subsidiary that is subject to the franchise tax on electric power companies levied in G.S. 105‑116.
(5) Expense adjustment. – The adjustment required by G.S. 105‑130.5(c)(3) for expenses related to dividends not taxed under this Part.
(6) Holding company. – Defined in G.S. 105‑120.2."
SECTION 37.(a) G.S. 105‑151.26 reads as rewritten:
"§ 105‑151.26. Credit for charitable contributions by nonitemizers.
A taxpayer who elects the standard deduction under G.S. 105‑134.6(a2) is allowed as a credit against the tax imposed by this Part an amount equal to seven percent (7%) of the taxpayer's excess charitable contributions. The taxpayer's excess charitable contributions are the amount by which the taxpayer's charitable contributions for the taxable year that would have been deductible under section 170 of the Code if the taxpayer had not elected the standard deduction exceed two percent (2%) of the taxpayer's adjusted gross income. For tax year 2013, the taxpayer's excess charitable contributions also include the amount by which the taxpayer's charitable contributions for the taxable year would have been deductible under section 170 of the Code had the taxpayer not elected to take the income exclusion under section 408(d)(8) of the Code that exceed two percent (2%) of the taxpayer's adjusted gross income. For purposes of computing this tax credit, charitable contributions are not subject to the charitable contribution limitation and carryover provisions under section 170 of the Code.
No credit shall be allowed under this section for contributions for which a credit was claimed under G.S. 105‑151.12 or G.S. 105‑151.14. A nonresident or part‑year resident who claims the credit allowed by this section shall reduce the amount of the credit by multiplying it by the fraction calculated under G.S. 105‑134.5(b) or (c), as appropriate. The credit allowed under this section may not exceed the amount of tax imposed by this Part for the taxable year reduced by the sum of all credits allowed, except payments of tax made by or on behalf of the taxpayer."
SECTION 37.(b) This section is effective for taxable years beginning on or after January 1, 2013.
SECTION 38. G.S. 105‑159 reads as rewritten:
"§ 105‑159. Federal corrections.
If a taxpayer's federal taxable
income adjusted gross income or federal tax credit that affects the
amount of State tax payable 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 that affects the
amount of State tax payable. The Secretary must propose an assessment for
any additional tax due from the taxpayer as provided in Article 9 of this
Chapter. The Secretary must refund any overpayment of tax as provided in
Article 9 of this Chapter. A taxpayer who fails to comply with this section is
subject to the penalties in G.S. 105‑236 and forfeits the right to
any refund due by reason of the determination."
SECTION 39.(a) G.S. 105‑163.3(d) reads as rewritten:
"(d) Annual Statement; Report to Secretary. – A payer required to deduct and withhold from a contractor's compensation under this section shall furnish to the contractor duplicate copies of a written statement showing the following:
(1) The payer's name, address, and taxpayer identification number.
(2) The contractor's name, address, and taxpayer identification number.
(3) The total amount of compensation paid during the calendar year.
(4) The total amount deducted and withheld under this section during the calendar year.
This statement is due by January 31 following the calendar year. If the personal services for which the payer is paying are completed before the end of the calendar year and the contractor requests the statement, the statement is due within 45 days after the payer's last payment of compensation to the contractor. The Secretary may require the payer to include additional information on the statement.
Each payer shall file with the
Secretary an annual report that compiles the information contained in each of
the payer's statements to contractors and any other information required by the
Secretary. Secretary in the manner required by the Secretary. This
report is due on the date prescribed by the Secretary and is in lieu of the
information report required by G.S. 105‑154."
SECTION 39.(b) G.S. 105‑163.6(a) reads as rewritten:
"(a) General. – A
return is due quarterly or monthly as specified in this section. A return shall
be filed with the Secretary on a form prepared in the manner required
by the Secretary, shall report any payments of withheld taxes made during
the period covered by the return, and shall contain any other information
required by the Secretary.
Withheld taxes are payable quarterly, monthly, or semiweekly, as specified in this section. If the Secretary finds that collection of the amount of taxes this Article requires an employer to withhold is in jeopardy, the Secretary may require the employer to file a return or pay withheld taxes at a time other than that specified in this section."
SECTION 40. G.S. 105‑164.4(a)(6b) reads as rewritten:
"(6b) The general rate applies to the sales price of digital property that is sold at retail and that is listed in this subdivision, is delivered or accessed electronically, is not considered tangible personal property, and would be taxable under this Article if sold in a tangible medium. The tax applies regardless of whether the purchaser of the item has a right to use it permanently or to use it without making continued payments. The tax does not apply to a service that is taxed under another subdivision of this subsection or to an information service. The following property is subject to tax under this subdivision:
a. An audio work.
b. An audiovisual work.
c. A book, a magazine, a newspaper, a newsletter, a report, or another publication.
d. A photograph or a greeting card."
SECTION 41. G.S. 105‑164.4C(a2) reads as rewritten:
"(a2) Sourcing Exceptions. – The following telecommunications services and products are sourced in accordance with the principles set out in this subsection:
(1) Mobile. – Mobile telecommunications service is sourced to the place of primary use, unless the service is prepaid wireless calling service or is air‑to‑ground radiotelephone service. Air‑to‑ground radiotelephone service is a postpaid calling service that is offered by an aircraft common carrier to passengers on its aircraft and enables a telephone call to be made from the aircraft. The sourcing principle in this subdivision applies to a service or product provided as an adjunct to mobile telecommunications service if the charge for the service or product is included within the term "charges for mobile telecommunications services" under the federal Mobile Telecommunications Sourcing Act.
(2) Prepaid. – Prepaid telephone calling service is sourced in accordance with G.S. 105‑164.4B.
(3) Private. – Private telecommunications service is sourced in accordance with subsection (e) of this section.
...."
SECTION 42.(a) G.S. 105‑164.14(c)(24) reads as rewritten:
"(c) Certain Governmental Entities. – A governmental entity listed in this subsection is allowed an annual refund of sales and use taxes paid by it under this Article on direct purchases of tangible personal property and services, other than electricity, telecommunications service, and ancillary service. Sales and use tax liability indirectly incurred by a governmental entity on building materials, supplies, fixtures, and equipment that become a part of or annexed to any building or structure that is owned or leased by the governmental entity and is being erected, altered, or repaired for use by the governmental entity is considered a sales or use tax liability incurred on direct purchases by the governmental entity for the purpose of this subsection. A request for a refund must be in writing and must include any information and documentation required by the Secretary. A request for a refund is due within six months after the end of the governmental entity's fiscal year.
This subsection applies only to the following governmental entities:
…
(24) A public library created
pursuant to an act of the General Assembly.Assembly or established
pursuant to G.S. 153A‑270."
SECTION 42.(b) This section becomes effective January 1, 2013, and applies to purchases occurring on or after that date.
SECTION 43.(a) G.S. 105‑164.28 reads as rewritten:
"§ 105‑164.28. Certificate of exemption.
(a) Seller's
Responsibility. – A seller who accepts a certificate of exemption from a
purchaser has the burden of proving that the sale was not a retail sale unless
all of the following conditions are met:Relief From Liability. – Except
as provided in subsection (b) of this section, a seller is not liable for the
tax otherwise applicable if the Secretary determines that a purchaser
improperly claimed an exemption, or if the seller within 90 days of the sale meets
the following requirements:
(1) For a sale made in
person, the seller obtains a certificate of exemption or a blanket
certificate of exemption from a purchaser with which the seller has a recurring
business relationship. If the purchaser provides a paper certificate, the
certificate must be is signed by the purchaser and states state
the purchaser's name, address, certificate of registration number, reason
for exemption, and type of business. For purposes of this subdivision, a
certificate received by fax is a paper certificate. If the purchaser does not
provide a paper certificate, the seller must obtain and maintain the same
information required had a certificate been provided by the purchaser.
(2) For a sale
made in person, the item sold is the type of item typically sold by the type of
business stated on the certificate.
(3) For a sale made over the Internet or by other remote means, the seller obtains the purchaser's name, address, certificate of registration number, reason for exemption, and type of business and maintains this information in a retrievable format in its records. If a certificate of exemption is provided electronically for a remote sale, the requirements of subdivision (1) of this subsection apply except the electronic certificate is not required to be signed by the purchaser.
(4) In the case of drop shipment sales, a third‑party vendor obtains a certificate of exemption provided by its customer or any other acceptable information evidencing qualification for a resale exemption, regardless of whether the customer is registered to collect and remit sales and use tax in the State.
(b) Substantiation Request. – If the Secretary determines that a certificate of exemption or the required data elements obtained by the seller are incomplete, the Secretary may request substantiation from the seller. A seller is not required to verify that a certificate of registration number provided by a purchaser is correct. If a seller does one of the following within 120 days after a request for substantiation by the Secretary, the seller is not liable for the tax otherwise applicable:
(1) Obtains a fully completed certificate of exemption from the purchaser provided in good faith. The certificate is provided in good faith if it claims an exemption that meets all of the following conditions:
a. It was statutorily available in this State on the date of the transaction.
b. It could be applicable to the item being purchased.
c. It is reasonable for the purchaser's type of business.
(2) Obtains other information to establish the transaction was not subject to tax.
(c) Fraud. – The relief from liability under this section does not apply to a seller who does any of the following:
(1) Fraudulently fails to collect tax.
(2) Solicits purchasers to participate in the unlawful claim of an exemption.
(3) Accepts an exemption certificate when the purchaser claims an entity‑based exemption when the subject of the transaction sought to be covered by the exemption certificate is received by the purchaser at a location operated by the seller, and the claimed exemption is not available in this State.
(4) Had knowledge or had reason to know at the time information was provided relating to the exemption claimed that the information was materially false.
(5) Knowingly participated in activity intended to purposefully evade tax properly due on the transaction.
(d) Purchaser's Liability. – A purchaser who does not resell an item purchased under a certificate of exemption is liable for any tax subsequently determined to be due on the sale.
(e) Renewal of Information. – The Secretary may not require a seller to renew a blanket certificate of exemption or to update exemption certificate information or data elements when there is a recurring business relationship between the buyer and seller. For purposes of this section, a recurring business relationship exists when a period of no more than 12 months elapse between sales transactions."
SECTION 43.(b) G.S. 105‑164.28A reads as rewritten:
"§ 105‑164.28A. Other exemption certificates.
(a) Authorization. – The
Secretary may require a person who purchases an item that is exempt from tax or
is subject to a preferential rate of tax depending on the status of the purchaser
or the intended use of the item to obtain an exemption certificate from the
Department to receive the exemption or preferential rate. An exemption
certificate authorizes a retailer to sell an item to the holder of the
certificate and either collect tax at a preferential rate or not collect tax on
the sale, as appropriate. A person who purchases an item under an exemption
certificate is liable for any tax due on the sale if the Department determines
that the person is not eligible for the certificate or the item was not used
as intended.certificate. The liability is relieved when the seller
obtains the purchaser's name, address, type of business, reason for exemption,
and exemption number in lieu of obtaining an exemption certificate.
(b) Scope. – This section
does not apply to a direct pay permit or a certificate of resale.exemption.
G.S. 105‑164.27A addresses a direct pay permit, and G.S. 105‑164.28
addresses a certificate of resale.exemption.
(c) Administration. – This section shall be administered in accordance with G.S. 105‑164.28."
SECTION 44. G.S. 105‑164.42I(b) reads as rewritten:
"(b) Contract. – The
Secretary may contract contract or authorize in writing the
Streamlined Sales Tax Governing Board to contract on behalf of the Secretary with
a certified service provider for the collection and remittance of sales and use
taxes. A certified service provider must file with the Secretary or the
Streamlined Sales Tax Governing Board a bond or an irrevocable letter of
credit in the amount set by the Secretary. A bond or irrevocable letter of
credit must be conditioned upon compliance with the contract, be payable to
the State, State or the Streamlined Sales Tax Governing Board, and
be in the form required by the Secretary. The amount a certified service
provider charges under the contract is a cost of collecting the tax and is
payable from the amount collected."
SECTION 45. G.S. 105‑164.44I(a) reads as rewritten:
"(a) Distribution. –
The Secretary must distribute to the counties and cities part of the taxes
imposed by G.S. 105‑164.4(a)(4c) on telecommunications service and G.S. 105‑164.4(a)(6)
on video programming service. The Secretary must make the distribution within
75 days after the end of each calendar quarter. The amount the Secretary must
distribute is the sum of the revenue listed in this subsection. The From
this amount, the Secretary must distribute two million dollars
($2,000,000) of this amount in accordance with first make the
distribution required by subsection (b) of this section and then
distribute the remainder in accordance with subsections (c) and (d) of this
section. The revenue to be distributed under this section consists of the
following:
(1) The amount specified in G.S. 105‑164.44F(a)(2).
(2) Twenty three and six tenths percent (23.6%) of the net proceeds of the taxes collected during the quarter on video programming, other than on direct‑to‑home satellite service.
(3) Thirty‑seven and one tenths percent (37.1%) of the net proceeds of the taxes collected during the quarter on direct‑to‑home satellite service."
SECTION 46. G.S. 105‑187.51B reads as rewritten:
"§ 105‑187.51B. Tax imposed on certain recyclers, research and development companies, industrial machinery refurbishing companies, and companies located at ports facilities.
(a) Tax. – A privilege tax is imposed on the following:
(1) A major recycling facility that purchases any of the following tangible personal property for use in connection with the facility:
a. Cranes, structural steel crane support systems, and foundations related to the cranes and support systems.
b. Port and dock facilities.
c. Rail equipment.
d. Material handling equipment.
(2) A company primarily
engaged at the establishment in research and development company activities
in the physical, engineering, and life sciences that is included in
industry 54171 of NAICS and that purchases equipment or an attachment or repair
part for equipment that meets all of the following requirements:
a. Is capitalized by the company for tax purposes under the Code.
b. Is used by the company at the establishment in the research and development of tangible personal property.
c. Would be considered mill machinery or mill machinery parts or accessories under G.S. 105‑187.51 if it were purchased by a manufacturing industry or plant and used in the research and development of tangible personal property manufactured by the industry or plant.
(3) A company primarily
engaged at the establishment in software publishing company activities
that is included in the industry group 5112 of NAICS and that
purchases equipment or an attachment or repair part for equipment that meets
all of the following requirements:
a. Is capitalized by the company for tax purposes under the Code.
b. Is used by the company at the establishment in the research and development of tangible personal property.
c. Would be considered mill machinery under G.S. 105‑187.51 if it were purchased by a manufacturing industry or plant and used in the research and development of tangible personal property manufactured by the industry or plant.
(4) An A company
primarily engaged at the establishment in industrial machinery refurbishing
company activities that is included in industry group
811310 of NAICS and that purchases equipment or an attachment or repair part
for equipment that meets all of the following requirements:
a. Is capitalized by the company for tax purposes under the Code.
b. Is used by the company at the establishment in repairing or refurbishing tangible personal property.
c. Would be considered mill machinery under G.S. 105‑187.51 if it were purchased by a manufacturing industry or plant and used by the industry or plant to manufacture tangible personal property.
(5) A company located at a ports facility for waterborne commerce that purchases specialized equipment to be used at the facility to unload or process bulk cargo to make it suitable for delivery to and use by manufacturing facilities.
(b) Rate. – The tax is one percent (1%) of the sales price of the equipment or other tangible personal property. The maximum tax is eighty dollars ($80.00) per article."
SECTION 47.(a) G.S. 105‑241.6(b) reads as rewritten:
"(b) Exceptions. – The exceptions to the general statute of limitations for obtaining a refund of an overpayment are as follows:
(1) Federal Determination. – If a taxpayer files a return reflecting a federal determination and the return is filed within the time required by this Subchapter, the period for requesting a refund is one year after the return reflecting the federal determination is filed or three years after the original return was filed or due to be filed, whichever is later.
(2) Waiver. – A taxpayer's waiver of the statute of limitations for making a proposed assessment extends the period in which the taxpayer can obtain a refund to the end of the period extended by the waiver.
(3) Worthless Debts or Securities. – Section 6511(d)(1) of the Code applies to an overpayment of the tax levied in Part 2 or 3 of Article 4 of this Chapter to the extent the overpayment is attributable to either of the following:
a. The deductibility by the taxpayer under section 166 of the Code of a debt that becomes worthless, or under section 165(g) of the Code of a loss from a security that becomes worthless.
b. The effect of the deductibility of a debt or loss described in subpart a. of this subdivision on the application of a carryover to the taxpayer.
(4) Capital Loss and Net Operating Loss Carrybacks. – Section 6511(d)(2) of the Code applies to an overpayment of the tax levied in Part 2 or 3 of Article 4 of this Chapter to the extent the overpayment is attributable to a capital loss carryback under section 1212(c) of the Code or to a net operating loss carryback under section 172 of the Code.
(5) Contingent Event. – If a taxpayer is subject to a contingent event and files notice with the Secretary, the period to request a refund of an overpayment is six months after the contingent event concludes.
a. For purposes of this subdivision, "contingent event" means litigation or a State tax audit initiated prior to the expiration of the statute of limitations under subsection (a) of this section, the pendency of which prevents the taxpayer from possessing the information necessary to file an accurate and definite request for a refund of an overpayment under this Chapter.
b. For purposes of this subdivision, "notice to the Secretary" means written notice filed with the Secretary prior to expiration of the statute of limitations under subsection (a) of this section for a return or payment in which a contingent event prevents a taxpayer from filing a definite request for a refund of an overpayment. The notice must identify and describe the contingent event, identify the type of tax, list the return or payment affected by the contingent event, and state in clear terms the basis for and an estimated amount of the overpayment.
c. A taxpayer who contends that an event or condition other than litigation or a State tax audit has occurred that prevents the taxpayer from filing an accurate and definite request for a refund of an overpayment within the period under subsection (a) of this section may submit a written request to the Secretary seeking an extension of the statute of limitations allowed under this subdivision. The request must establish by clear, convincing proof that the event or condition is beyond the taxpayer's control and that it prevents the taxpayer's timely filing of an accurate and definite request for a refund of an overpayment. The request must be filed within the period under subsection (a) of this section. The Secretary's decision on the request is final and is not subject to administrative or judicial review."
SECTION 47.(b) G.S. 105‑241.7(b) reads as rewritten:
"(b) Initiated by
Taxpayer. – A taxpayer may request a refund of an overpayment made by the
taxpayer by taking one of the following actions listed in this
subsection within the statute of limitations for obtaining a refund:refund.
A taxpayer may not request a refund of an overpayment based on a contingent
event as defined in G.S. 105‑241.6(b)(5) until the event is
finalized and an accurate and definite request for refund of an overpayment may
be determined. The actions are:
(1) Filing an amended return reflecting an overpayment due the taxpayer.
(2) Filing a claim for refund. The claim must identify the taxpayer, the type and amount of tax overpaid, the filing period to which the overpayment applies, and the basis for the claim. The taxpayer's statement of the basis of the claim does not limit the taxpayer from changing the basis."
SECTION 47.(c) This section becomes effective January 1, 2014, and applies to a request for a refund of an overpayment of tax filed on or after that date.
SECTION 48. G.S. 105‑262.1(d) reads as rewritten:
"(d) Adoption. – The
Secretary may adopt a rule under this section by using the procedure for
adoption of a temporary rule set forth in G.S. 150B‑21.1(a3). The
Secretary must provide electronic notification of the adoption of a rule to
persons on the mailing list maintained in accordance with G.S. 150B‑21.2(d)
and any other interested parties, including those originally given notice of
the rule making and those who provided comment on the rule. If the Secretary
receives written comment objecting to the rule and requesting review by the
Commission, the rule must be reviewed in accordance with subsections (e)
through (i) of this section. A person may object to the rule and request review
by the Commission at any point prior to the adoption following the
agency's adoption of the rule and by 5:00 P.M. on the third business day
following electronic notification from the Secretary of the adoption of a rule.
If the Secretary receives no written comment objecting to the rule and
requesting review by the Commission, the Secretary must deliver the rule to the
Codifier of Rules. The Codifier of Rules must enter the rule into the North
Carolina Administrative Code upon receipt of the rule."
SECTION 49.(a) G.S. 105‑468 reads as rewritten:
"§ 105‑468. Scope of use tax.
The use tax authorized by this Article is a tax at the rate of one percent (1%) of the cost price of each item or article of tangible personal property that is not sold in the taxing county but is used, consumed, or stored for use or consumption in the taxing county. The tax applies to the same items that are subject to tax under G.S. 105‑467. The collection and administration of this tax shall be in accordance with Article 5 of Chapter 105 of the General Statutes.
Every retailer who is engaged
in business in this State and in the taxing county and is required to collect
the use tax levied by G.S. 105‑164.6 shall collect the one percent
(1%) use tax when the property is to be used, consumed, or stored in the taxing
county. The use tax contemplated by this section shall be levied against the
purchaser, and the purchaser's liability for the use tax shall be extinguished
only upon payment of the use tax to the retailer, where the retailer is
required to collect the tax, or to the Secretary, where the retailer is not
required to collect the tax.
Where a local sales or use tax was due and has been paid with respect to tangible personal property by the purchaser in another taxing county within the State, or where a local sales or use tax was due and has been paid in a taxing jurisdiction outside the State where the purpose of the tax is similar in purpose and intent to the tax which may be imposed pursuant to this Article, the tax paid may be credited against the tax imposed under this section by a taxing county upon the same property. If the amount of sales or use tax so paid is less than the amount of the use tax due the taxing county under this section, the purchaser shall pay to the Secretary an amount equal to the difference between the amount so paid in the other taxing county or jurisdiction and the amount due in the taxing county. The Secretary may require such proof of payment in another taxing county or jurisdiction as is deemed to be necessary. The use tax levied under this Article is not subject to credit for payment of any State sales or use tax not imposed for the benefit and use of counties and municipalities. No credit shall be given under this section for sales or use taxes paid in a taxing jurisdiction outside this State if that taxing jurisdiction does not grant similar credit for sales taxes paid under this Article."
SECTION 49.(b) G.S. 105‑467(c) reads as rewritten:
"(c) Sourcing. – The
local sales tax authorized to be imposed and levied under this Article applies
to taxable transactions by retailers whose place of business is located within
the taxing county. The sourcing principles in G.S. 105‑164.4B
apply in determining whether the local sales tax applies to a transaction."
SECTION 50. G.S. 105‑561(d) reads as rewritten:
"(d) Special Tax District. – If a regional transportation authority created under Article 27 of Chapter 160A of the General Statutes or a regional public transportation authority created under Article 26 of Chapter 160A of the General Statutes has not levied the tax under this section or has levied the tax at a rate of less than eight dollars ($8.00), it may create a special district that consists of the entire area of one or more counties within its territorial jurisdiction and may levy on behalf of the special district the tax authorized in this section. The rate of tax levied within the special district may not, when combined with the rate levied within the entire territorial jurisdiction of the authority; exceed eight dollars ($8.00). The regional transportation authority may not levy or increase a tax within the special district unless the board of commissioners of each county in the special district has adopted a resolution approving the levy or increase.
A special district created pursuant to this subsection is a body corporate and politic and has the power to carry out the purposes of this subsection. The board of trustees of the regional transportation authority created under Article 27 of Chapter 160A of the General Statutes or a regional public transportation authority created under Article 26 of Chapter 160A of the General Statutes shall serve, ex officio, as the governing body of a special district it creates pursuant to this subsection. The proceeds of a tax levied under this subsection may be used only for the benefit of the special district and only for the purposes provided in G.S. 105‑564. Except as provided in this subsection, a tax levied under this subsection is governed by the provisions of this Article."
SECTION 51. Section 27A.2(f) of S.L. 2009‑451 reads as rewritten:
"SECTION 27A.2.(f) Subsections (a) and (e) of this section are effective when they become law. The remainder of this section becomes effective October 1, 2009. Subsection (b) applies to sales made on or after October 1, 2009, and subsections (c) and (d) apply to distributions for months beginning on or after October 1, 2009. Subsections (b) through (d) of this section expire July 1, 2011. The general State rate of tax in effect on or after July 1, 2011, applies to gross receipts received on or after July 1, 2011, pursuant to a lease or rental agreement entered into during the period September 1, 2009, through June 30, 2011, for a definite, stipulated period of time. This section does not affect the rights or liabilities of the State, a taxpayer, or another person arising under a statute amended or repealed by this section before the effective date of its amendment or repeal; nor does it affect the right to any refund or credit of a tax that accrued under the amended or repealed statute before the effective date of its amendment or repeal."
SECTION 52. Section 8 of S.L. 2011‑122 reads as rewritten:
"SECTION
8. Notwithstanding G.S. 62A‑60(c), as enacted by Section 5 of
this act, the Department of Revenue may retain the cost of collection not to
exceed seven hundred thousand dollars ($700,000) of the 911 service charges for
prepaid wireless telecommunications service remitted to it from
collections by sellers of the charge for the first 12 calendar months beginning
on or after July 1, 2013. The cost of collection that the Department may retain
under this section includes costs incurred prior to July 1, 2013."
SECTION 53.(a) The Department of Revenue allocates and distributes to cities and counties the local sales and use taxes under Subchapter VIII of Chapter 105 of the General Statutes and a portion of various State taxes under Chapter 105 of the General Statutes, such as the excise tax on beer and wine, the franchise tax on electric power companies, the sales tax on video programming and telecommunications, and the excise tax on piped natural gas. If the Department is unable to accurately identify and calculate the amount of tax proceeds allocable and distributable to a county or city for any one or more of these taxes for one or more of the distributional periods because of implementation issues with the Tax Information Management System (TIMS), the Department must allocate and distribute to a county and city an amount for that period that is equal to the average of the applicable tax proceeds allocated and distributed to it for the same distributional period in the preceding three fiscal years.
SECTION 53.(b) This section is effective when it becomes law and expires on July 1, 2015.
SECTION 54.(a) G.S. 105‑164.14(b)(2a) reads as rewritten:
"(b) Nonprofit Entities and Hospital Drugs. – A nonprofit entity is allowed a semiannual refund of sales and use taxes paid by it under this Article on direct purchases of tangible personal property and services, other than electricity, telecommunications service, and ancillary service, for use in carrying on the work of the nonprofit entity. Sales and use tax liability indirectly incurred by a nonprofit entity on building materials, supplies, fixtures, and equipment that become a part of or annexed to any building or structure that is owned or leased by the nonprofit entity and is being erected, altered, or repaired for use by the nonprofit entity for carrying on its nonprofit activities is considered a sales or use tax liability incurred on direct purchases by the nonprofit entity. A request for a refund must be in writing and must include any information and documentation required by the Secretary. A request for a refund for the first six months of a calendar year is due the following October 15; a request for a refund for the second six months of a calendar year is due the following April 15.
The refunds allowed under this subsection do not apply to an entity that is owned and controlled by the United States or to an entity that is owned or controlled by the State and is not listed in this subsection. A hospital that is not listed in this subsection is allowed a semiannual refund of sales and use taxes paid by it on medicines and drugs purchased for use in carrying out its work. The following nonprofit entities are allowed a refund under this subsection:
…
(2a) Volunteer fire
departments and volunteer emergency medical services squads that are An
organization that is exempt from income tax under the Code and is one or
more of the following:
a. A volunteer fire
department.Exempt from income tax under the Code.
b. A volunteer emergency
medical services squad.Financially accountable to a city as defined in G.S. 160A‑1,
a county, or a group of cities and counties.
…."
SECTION 54.(b) This section becomes effective July 1, 2013, and applies to purchases occurring on or after that date.
SECTION 55. G.S. 105‑134.5 reads as rewritten:
"§ 105‑134.5. 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. 105‑134.6
and G.S. 105‑134.6A.
(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. 105‑134.6 and G.S. 105‑134.6A multiplied
by a fraction the denominator of which is the taxpayer's gross income as
modified in G.S. 105‑134.6, G.S. 105‑134.6 and G.S. 105‑134.6A,
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 gross income,
as modified under G.S. 105‑134.6, G.S. 105‑134.6
and G.S. 105‑134.6A, derived from all sources during the period
the individual was a resident.
…."
SECTION 56.(a) G.S. 105‑242.2(b) reads as rewritten:
"(b) Responsible Person.
– Each responsible person in a business entity is personally and individually
liable for all the principal amount of the taxes that
are owed by the business entity and are listed in this subsection. If a
business entity does not pay a tax the amount it owes after the tax
amount becomes collectible under G.S. 105‑241.22, the
Secretary may enforce the responsible person's liability for the tax amount
by sending the responsible person a notice of proposed assessment in
accordance with G.S. 105‑241.9. The taxes for which a responsible
person may be held personally and individually liable are:This
subsection applies to the following:
(1) All sales and use taxes collected by the business entity upon its taxable transactions.
(2) All sales and use taxes due upon taxable transactions of the business entity but upon which it failed to collect the tax, but only if the person knew, or in the exercise of reasonable care should have known, that the tax was not being collected.
(3) All taxes due from the business entity pursuant to the provisions of Articles 36C and 36D of Subchapter V of this Chapter and all taxes payable under those Articles by it to a supplier for remittance to this State or another state.
(4) All income taxes required to be withheld from the wages of employees of the business entity."
SECTION 56.(b) This section is effective when it becomes law and applies to assessments proposed on or after that date.
SECTION 57.(a) G.S. 20‑79.4 reads as rewritten:
"§ 20‑79.4. Special registration plates.
…
(b) Types. – The Division shall issue the following types of special registration plates:
…
() North Carolina Paddle Festival. – Issuable to the registered owner of a motor vehicle in accordance with G.S. 20‑81.12. The plate may bear a phrase and logo representing the North Carolina Paddle Festival.
…."
SECTION 57.(b) G.S. 20‑79.7(a) reads as rewritten:
"(a) Fees. – Upon request, the Division shall provide and issue free of charge a single Legion of Valor, 100% Disabled Veteran, and Ex‑Prisoner of War registration plate to a recipient of a Legion of Valor award, a 100% disabled veteran, and an ex‑prisoner of war each year. The preceding special registration plates are subject to the regular motor vehicle registration fees in G.S. 20‑88, if the registered weight of the vehicle is greater than 6,000 pounds. All other special registration plates are subject to the regular motor vehicle registration fee in G.S. 20‑87 or G.S. 20‑88 plus an additional fee in the following amount:
Special Plate Additional Fee Amount
American Red Cross $30.00
Animal Lovers $30.00
Arthritis Foundation $30.00
ARTS NC $30.00
Back Country Horsemen of NC $30.00
Boy Scouts of America $30.00
Brenner Children's Hospital $30.00
Carolina Raptor Center $30.00
Carolinas Credit Union Foundation $30.00
Carolinas Golf Association $30.00
Coastal Conservation Association $30.00
Coastal Land Trust $30.00
Crystal Coast $30.00
Daniel Stowe Botanical Garden $30.00
El Pueblo $30.00
Farmland Preservation $30.00
First in Forestry $30.00
Girl Scouts $30.00
Greensboro Symphony Guild $30.00
Historical Attraction $30.00
Home Care and Hospice $30.00
Home of American Golf $30.00
HOMES4NC $30.00
Hospice Care $30.00
In God We Trust $30.00
Maggie Valley Trout Festival $30.00
Morgan Horse Club $30.00
Mountains‑to‑Sea Trail $30.00
NC Civil War $30.00
NC Coastal Federation $30.00
NC Veterinary Medical Association $30.00
National Kidney Foundation $30.00
North Carolina 4‑H Development Fund $30.00
North Carolina Emergency Management Association $30.00
North Carolina Green Industry Council $30.00
North Carolina Libraries $30.00
North Carolina Paddle Festival $30.00
Outer Banks Preservation Association $30.00
Pamlico‑Tar River Foundation $30.00
P.E.O. Sisterhood $30.00
Personalized $30.00
Retired Legislator $30.00
Ronald McDonald House $30.00
Share the Road $30.00
S.T.A.R. $30.00
State Attraction $30.00
Stock Car Racing Theme $30.00
Support NC Education $30.00
Support Our Troops $30.00
Sustainable Fisheries $30.00
Toastmasters Club $30.00
Topsail Island Shoreline Protection $30.00
Travel and Tourism $30.00
AIDS Awareness $25.00
Buffalo Soldiers $25.00
Choose Life $25.00
Collegiate Insignia $25.00
First in Turf $25.00
Goodness Grows $25.00
High School Insignia $25.00
Kids First $25.00
National Multiple Sclerosis Society $25.00
National Wild Turkey Federation $25.00
NC Agribusiness $25.00
NC Children's Promise $25.00
Nurses $25.00
Olympic Games $25.00
Rocky Mountain Elk Foundation $25.00
Special Olympics $25.00
Support Soccer $25.00
Surveyor Plate $25.00
The V Foundation for Cancer Research Division $25.00
University Health Systems of Eastern Carolina $25.00
Alpha Phi Alpha Fraternity $20.00
ALS Association, Jim "Catfish" Hunter Chapter $20.00
ARC of North Carolina $20.00
Audubon North Carolina $20.00
Autism Society of North Carolina $20.00
Battle of Kings Mountain $20.00
Be Active NC $20.00
Brain Injury Awareness $20.00
Breast Cancer Earlier Detection $20.00
Buddy Pelletier Surfing Foundation $20.00
Concerned Bikers Association/ABATE of North Carolina $20.00
Daughters of the American Revolution $20.00
Donate Life $20.00
Ducks Unlimited $20.00
Greyhound Friends of North Carolina $20.00
Guilford Battleground Company $20.00
Harley Owners' Group $20.00
Jaycees $20.00
Juvenile Diabetes Research Foundation $20.00
Kappa Alpha Order $20.00
Litter Prevention $20.00
March of Dimes $20.00
Native American $20.00
NC Fisheries Association $20.00
NC Horse Council $20.00
NC Mining $20.00
NC Tennis Foundation $20.00
NC Trout Unlimited $20.00
NC Victim Assistance $20.00
NC Wildlife Federation $20.00
NC Wildlife Habitat Foundation $20.00
NC Youth Soccer Association $20.00
North Carolina Master Gardener $20.00
Omega Psi Phi Fraternity $20.00
Phi Beta Sigma Fraternity $20.00
Piedmont Airlines $20.00
Prince Hall Mason $20.00
Save the Sea Turtles $20.00
Scenic Rivers $20.00
School Technology $20.00
SCUBA $20.00
Soil and Water Conservation $20.00
Special Forces Association $20.00
Support Public Schools $20.00
US Equine Rescue League $20.00
USO of NC $20.00
Wildlife Resources $20.00
Zeta Phi Beta Sorority $20.00
Carolina Regional Volleyball Association $15.00
Carolina's Aviation Museum $15.00
Leukemia & Lymphoma Society $15.00
Lung Cancer Research $15.00
NC Beekeepers $15.00
Shag Dancing $15.00
Active Member of the National Guard None
100% Disabled Veteran None
Ex‑Prisoner of War None
Gold Star Lapel Button None
Legion of Valor None
Purple Heart Recipient None
All Other Special Plates $10.00."
SECTION 57.(c) G.S. 20‑79.7(b) reads as rewritten:
"(b) Distribution of Fees. – The Special Registration Plate Account and the Collegiate and Cultural Attraction Plate Account are established within the Highway Fund. The Division must credit the additional fee imposed for the special registration plates listed in subsection (a) of this section among the Special Registration Plate Account (SRPA), the Collegiate and Cultural Attraction Plate Account (CCAPA), the Natural Heritage Trust Fund (NHTF), which is established under G.S. 113‑77.7, and the Parks and Recreation Trust Fund, which is established under G.S. 113‑44.15, as follows:
Special Plate SRPA CCAPA NHTF PRTF
AIDS Awareness $10 $15 0 0
Alpha Phi Alpha Fraternity $10 $10 0 0
ALS Association, Jim "Catfish"
Hunter Chapter $10 $10 0 0
American Red Cross $10 $20 0 0
Animal Lovers $10 $20 0 0
ARC of North Carolina $10 $10 0 0
Arthritis Foundation $10 $20 0 0
ARTS NC $10 $20 0 0
Audubon North Carolina $10 $10 0 0
Autism Society of North
Carolina $10 $10 0 0
Back Country Horsemen of NC $10 $20 0 0
Battle of Kings Mountain $10 $10 0 0
Be Active NC $10 $10 0 0
Boy Scouts of America $10 $20 0 0
Brain Injury Awareness $10 $10 0 0
Breast Cancer Earlier Detection $10 $10 0 0
Brenner Children's Hospital $10 $20 0 0
Buddy Pelletier Surfing
Foundation $10 $10 0 0
Buffalo Soldiers $10 $15 0 0
Carolina Raptor Center $10 $20 0 0
Carolina Regional Volleyball
Association $10 $5 0 0
Carolina's Aviation Museum $10 $5 0 0
Carolinas Credit Union
Foundation $10 $20 0 0
Carolinas Golf Association $10 $20 0 0
Choose Life $10 $15 0 0
Coastal Conservation
Association $10 $20 0 0
Coastal Land Trust $10 $20 0 0
Concerned Bikers Association/
ABATE of North Carolina $10 $10 0 0
Crystal Coast $10 $20 0 0
Daniel Stowe Botanical Gardens $10 $20 0 0
Daughters of the American
Revolution $10 $10 0 0
Donate Life $10 $10 0 0
Ducks Unlimited $10 $10 0 0
El Pueblo $10 $20 0 0
Farmland Preservation $10 $20 0 0
First in Forestry $10 $10 $10 0
First in Turf $10 $15 0 0
Girl Scouts $10 $20 0 0
Goodness Grows $10 $15 0 0
Greensboro Symphony Guild $10 $20 0 0
Greyhound Friends of North
Carolina $10 $10 0 0
Guilford Battleground
Company $10 $10 0 0
Harley Owners' Group $10 $10 0 0
High School Insignia $10 $15 0 0
Historical Attraction $10 $20 0 0
Home Care and Hospice $10 $20 0 0
Home of American Golf $10 $20 0 0
HOMES4NC $10 $20 0 0
Hospice Care $10 $20 0 0
In God We Trust $10 $20 0 0
In‑State Collegiate Insignia $10 $15 0 0
Jaycees $10 $10 0 0
Juvenile Diabetes Research
Foundation $10 $10 0 0
Kappa Alpha Order $10 $10 0 0
Kids First $10 $15 0 0
Leukemia & Lymphoma
Society $10 $5 0 0
Litter Prevention $10 $10 0 0
Lung Cancer Research $10 $5 0 0
Maggie Valley Trout Festival $10 $20 0 0
March of Dimes $10 $10 0 0
Morgan Horse Club $10 $20 0 0
Mountains‑to‑Sea Trail $10 $20 0 0
National Kidney Foundation $10 $20 0 0
National Multiple Sclerosis
Society $10 $15 0 0
National Wild Turkey
Federation $10 $15 0 0
Native American $10 $10 0 0
NC Agribusiness $10 $15 0 0
NC Beekeepers $10 $5 0 0
NC Children's Promise $10 $15 0 0
NC Civil War $10 $20 0 0
NC Coastal Federation $10 $20 0 0
NC 4‑H Development Fund $10 $20 0 0
NC Fisheries Association $10 $10 0 0
NC Horse Council $10 $10 0 0
NC Mining $10 $10 0 0
NC Tennis Foundation $10 $10 0 0
NC Trout Unlimited $10 $10 0 0
NC Veterinary Medical
Association $10 $20 0 0
NC Victim Assistance $10 $10 0 0
NC Wildlife Federation $10 $10 0 0
NC Wildlife Habitat
Foundation $10 $10 0 0
NC Youth Soccer
Association $10 $10 0 0
North Carolina Emergency
Management Association $10 $20 0 0
North Carolina Green Industry
Council $10 $20 0 0
North Carolina Libraries $10 $20 0 0
North Carolina Master Gardener $10 $10 0 0
North Carolina Paddle Festival $10 $20 0 0
Nurses $10 $15 0 0
Olympic Games $10 $15 0 0
Omega Psi Phi Fraternity $10 $10 0 0
Out‑of‑state Collegiate Insignia $10 0 $15 0
Outer Banks Preservation
Association $10 $20 0 0
Pamlico‑Tar River Foundation $10 $20 0 0
P.E.O. Sisterhood $10 $20 0 0
Personalized $10 0 $15 $5
Phi Beta Sigma Fraternity $10 $10 0 0
Piedmont Airlines $10 $10 0 0
Prince Hall Mason $10 $10 0 0
Retired Legislator $10 $20 0 0
Rocky Mountain Elk
Foundation $10 $15 0 0
Ronald McDonald House $10 $20 0 0
Save the Sea Turtles $10 $10 0 0
Scenic Rivers $10 $10 0 0
School Technology $10 $10 0 0
SCUBA $10 $10 0 0
Shag Dancing $10 $5 0 0
Share the Road $10 $20 0 0
Soil and Water Conservation $10 $10 0 0
Special Forces Association $10 $10 0 0
Special Olympics $10 $15 0 0
S.T.A.R. $10 $20 0 0
State Attraction $10 $20 0 0
Stock Car Racing Theme $10 $20 0 0
Support NC Education $10 $20 0 0
Support Our Troops $10 $20 0 0
Support Public Schools $10 $10 0 0
Support Soccer $10 $15 0 0
Surveyor Plate $10 $15 0 0
Sustainable Fisheries $10 $20 0 0
The V Foundation for Cancer
Research $10 $15 0 0
Toastmasters Club $10 $20 0 0
Topsail Island Shoreline
Protection $10 $20 0 0
Travel and Tourism $10 $20 0 0
University Health Systems of
Eastern Carolina $10 $15 0 0
US Equine Rescue League $10 $10 0 0
USO of NC $10 $10 0 0
Wildlife Resources $10 $10 0 0
Zeta Phi Beta Sorority $10 $10 0 0
All other Special Plates $10 0 0 0."
SECTION 57.(d) G.S. 20‑81.12 is amended by adding the following new subsection to read:
"(b148) The Division must receive 300 or more applications for a North Carolina Paddle Festival plate before the plate may be developed. The Division shall transfer quarterly the money in the Collegiate and Cultural Attraction Plate Account derived from the sale of North Carolina Paddle Festival plates to the Friends of the Hammocks and Bear Island, Inc."
SECTION 57.(e) The Revisor of Statutes is authorized to alphabetize, number, and renumber the special registration plates listed in G.S. 20‑81.12(b2) to ensure that all the special registration plates are listed in alphabetical order and numbered accordingly.
SECTION 58.(a) If House Bill 998, 2013 Regular Session, becomes law, then G.S. 105‑153.6, as enacted by House Bill 998, reads as rewritten:
"§ 105‑153.6. Adjustments when State decouples from federal accelerated depreciation and expensing.
…
(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.purposes,
except as modified in subsection (e) of this section.
(e) Bonus Asset Basis. – In the event of an actual or deemed transfer of an asset occurring on or after January 1, 2013, wherein the tax basis of the asset carries over from the transferor to the transferee for federal income tax purposes, the transferee must add any remaining deductions allowed under subsection (a) of this section to the basis of the transferred asset and depreciate the adjusted basis over any remaining life of the asset. Notwithstanding the provisions of subsection (a) of this section, the transferor and any owner in a transferor are not allowed any remaining future bonus depreciation deductions associated with the transferred asset. This subsection applies only to the extent that each transferor or owner in a transferor that added bonus depreciation to its federal taxable income or adjusted gross income associated with the transferred asset certifies in writing to the transferee, that the transferor or owner in a transferor will not take any remaining future bonus depreciation deduction associated with the transferred asset.
(f) Prior Transactions. – For any transaction meeting the requirements of subsection (e) of this section prior to January 1, 2013, the transferor and transferee can make an election to make the basis adjustment allowed in that subsection on the transferee's 2013 tax return, to the extent that the transferor and any owner in a transferor has not taken the bonus depreciation deduction on a prior return and provided that the transferor is not allowed any remaining future bonus depreciation deductions associated with the transferred asset and each transferor or owner in a transferor certifies in writing to the transferee that the transferor or owner in a transferor will not take any remaining deductions allowed under subsection (a) of this section for tax years beginning on or after January 1, 2013, for depreciation associated with the transferred asset. The amount of the basis adjustment under this subsection is limited to the total remaining future bonus depreciation deductions forfeited by the transferor and any owner in the transferor at the time of the transfer.
(g) Tax Basis. – For transactions described in subsection (e) or (f) of this section, adjusted gross income must be increased or decreased to account for any difference in the amount of depreciation, amortization, or gains or losses applicable to property that has been depreciated or amortized by use of a different basis or rate for State income tax purposes than used for federal income tax purposes prior to the effective date of this section.
(h) Definitions. – For purposes of this section, a ''transferor'' is an individual, partnership, S Corporation, limited liability company, or an estate or trust that does not fully distribute income to its beneficiaries, and an ''owner in a transferor'' is a partner, shareholder, member, or beneficiary subject to tax under Part 2 or 3 of Article 4 of this Chapter of a transferor."
SECTION 58.(b) If House Bill 998, 2013 Regular Session, becomes law, G.S. 105‑134.6A, 113A‑256(g), and 160A‑211(a) are repealed.
SECTION 58.(c) If House Bill 998, 2013 Regular Session, becomes law, G.S. 105‑153.3(12), as enacted by that act, reads as rewritten:
"§ 105‑153.3. Definitions.
The following definitions apply in this Part:
…
(9) Limited liability
company. – Either a domestic limited liability company organized under Chapter
57C Chapter 57D 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.
…
(12) North Carolina taxable
income. – Defined in G.S. 105‑153.5. G.S. 105‑153.4."
SECTION 58.(d) If House Bill 998, 2013 Regular Session, becomes law, then G.S. 160A‑211(a) reads as rewritten:
"§ 160A‑211. 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. 105‑37.1 Amusements – Live entertainment and ticket resales
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."
SECTION 58.(e) If House Bill 998 becomes law, then G.S. 105‑164.13, as amended by this act, 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:
…
(60) Admission charges to any of the following 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 the first two activities sponsored by the entity during a calendar year.
d. A youth athletic contest sponsored by a nonprofit entity that is exempt from tax under Article 4 of this Chapter. For the purpose of this subdivision, a youth athletic contest is a contest in which each participating athlete is less than 20 years of age at the time of enrollment.
e. A State attraction. A State attraction is a physical place supported with State funds that offers cultural, educational, historical, or recreational opportunities. The term "State funds" has the same meaning as defined in G.S. 143C‑1‑1.
(61) A service contract for tangible personal property that is provided for any of the following:
a. An item exempt from tax under this Article, other than an item exempt from tax under G.S. 105‑164.13(32).
b. A transmission, distribution, or other network asset contained on utility‑owned land, right‑of‑way, or easement.
c. An item purchased by a professional motorsports racing team for which the team may receive a sales tax refund under G.S. 105‑164.14A(5)."
SECTION 58.(f) This section becomes effective January 1, 2014, and applies to taxable years that begin on or after that date and to purchases made on or after that date."
occupancy tax technical changes
SECTION 60.(a) Section 17 of Chapter 908 of the 1983 Session Laws, as amended by Section 1 of S.L. 2001‑162, reads as rewritten:
"Sec. 17. Authorization and
Scope. (a) The Board of Commissioners of Buncombe County may levy a room
occupancy and tourism development tax of up to two percent (2%) of the gross
receipts derived from the rental of accommodations within the county that are
subject to sales tax imposed by the State under G.S. 105‑164.4(a)(3).
This tax does not apply to gross receipts derived by the following entities
from accommodations furnished by them:
(1) religious
organizations;
(2) educational
organizations;
(3) any business
that offers to rent fewer than five units; and
(4) summer camps."
SECTION 60.(b) Section 25 of Chapter 908 of the 1983 Session Laws, as amended by Section 1 of S.L. 2009‑157, reads as rewritten:
"Sec. 25. Occupancy Tax. –
Authorization and Scope. – The Board of Commissioners of Forsyth County may
levy a room occupancy and tourism development tax of two percent (2%) of the
gross receipts derived from the rental of any room, lodging, or similar
accommodation furnished by any hotel, motel, inn, tourist camp, or other
similar place within the county that is subject to sales tax imposed by the
State under G.S. 105‑164.4(a)(3). This tax is in addition to any
State or local sales tax. This tax does not apply to accommodations
furnished by any of the following:
(1) Religious
organizations.
(2) Educational
organizations.
(3) Any business
that offers to rent fewer than five units.
(4) Summer camps."
SECTION 60.(c) Section 3 of Chapter 980 of the 1983 Session Laws, as amended by Section 2 of S.L. 1995‑721, is repealed.
SECTION 60.(d) Section 3 of Chapter 988 of the 1983 Session Laws is repealed.
SECTION 60.(e) Section 3 of Chapter 857 of the 1985 Session Laws is repealed.
SECTION 60.(f) Section 2 of S.L. 2007‑112, as amended by Section 40 of S.L. 2007‑484, reads as rewritten:
"SECTION 2. Occupancy
Tax. – (a) Authorization and Scope. – The Carteret County Board of
Commissioners may levy a room occupancy and tourism development tax of five
percent (5%) of the gross receipts derived from the rental of any room,
lodging, or similar accommodation furnished by any hotel, motel, inn, tourist
camp, condominium, cottage, campground, rental agency, or other similar
place within the county that is subject to sales tax imposed by the State under
G.S. 105‑164.4(a)(3). This tax is in addition to any State or local
sales tax. This tax does not apply to accommodations furnished by the
following:
(1) Religious
organizations.
(2) Educational
organizations.
(3) Any business
that offers to rent fewer than five units.
(4) Summer camps.
(5) Charitable,
benevolent, and other nonprofit organizations."
SECTION 60.(g) Section 1 of Chapter 80 of the 1991 Session Laws, as amended by Section 1 of S.L. 2006‑127, reads as rewritten:
"Section 1. Occupancy
Tax. – (a) Authorization and Scope. – The Martin County Board of Commissioners
may levy a room occupancy tax of up to three percent (3%) of the gross receipts
derived from the rental of any room, lodging, or similar accommodation
furnished by a hotel, motel, inn, tourist camp, or similar place within the
county that is subject to sales tax imposed by the State under G.S. 105‑164.4(a)(3).
This tax is in addition to any State or local sales tax. This tax does not
apply to accommodations furnished by nonprofit charitable, educational, or religious
organizations, when furnished in furtherance of their nonprofit purpose, by
summer camps, or by businesses that offer to rent no more than five units.
…."
SECTION 60.(h) Section 1 of Chapter 102 of the 1997 Session Laws, as amended by Section 1 of S.L. 2005‑118, reads as rewritten:
"Section 1. (b) Authorization
and scope. The Madison County Board of Commissioners may levy a room occupancy
tax of up to three percent (3%) of the gross receipts derived from the rental
of any room, lodging, or accommodation furnished by a hotel, motel, inn,
tourist camp, or similar place within the county that is subject to sales tax
imposed by the State under G.S. 105‑164.4(a)(3). This tax is in
addition to any State or local sales tax. This tax does not apply to
accommodations furnished by nonprofit charitable, educational, or religious
organizations or to a business that offers to rent fewer than five units.
…."
SECTION 60.(i) Section 1 of Chapter 821 of the 1991 Session Laws, as amended by S.L. 2001‑305, reads as rewritten:
"Section 1. Occupancy
tax. (a) Authorization and scope. The Washington County Board of Commissioners
may levy a room occupancy tax of three percent (3%) of the gross receipts
derived from the rental of any room, lodging, or accommodation furnished by a
hotel, motel, inn, tourist camp, or similar place within the county that is
subject to sales tax imposed by the State under G.S. 105‑164.4(a)(3).
This tax is in addition to any State or local sales tax. This tax does not
apply to accommodations furnished by:
(1) Nonprofit
charitable, educational, or religious organizations.
(2) A business
that offers to rent fewer than five units.
(3) Summer camps.
…."
SECTION 60.(j) Section 1 of Chapter 969 of the 1987 Session Laws, as amended by Section 13.1 of S.L. 2001‑439, reads as rewritten:
"Section 1. Levy of Tax. –
(a) The Board of Commissioners of Richmond County may by resolution levy a room
occupancy and tourism development tax of three percent (3%) of the gross
receipts derived from the rental of any room, lodging, or similar accommodation
furnished by any hotel, motel, inn, tourist camp or other similar place within
the county now subject to the three percent (3%) sales tax imposed by the State
under G.S. 105‑164.4(a)(3). This tax is in addition to any local
sales tax. This tax does not apply to gross receipts derived by the
following entities from accommodations furnished by them:
(1) Religious
organizations;
(2) Educational
organizations;
(3) Any business
that offers to rent fewer than five units; and
(4) Summer camps.
…."
SECTION 60.(k) Section 1 of Chapter 158 of the 1991 Session Laws, as amended by Section 1 of S.L. 2001‑365, reads as rewritten:
"Section 1. Occupancy Tax.
(a) Authorization and
scope. – The Washington City Council may levy a room occupancy tax of three
percent (3%) of the gross receipts derived from the rental of any room,
lodging, or similar accommodation furnished by a hotel, motel, inn, tourist
camp, or similar place within the city that is subject to sales tax imposed by
the State under G.S. 105‑164.4(a)(3). This tax is in addition to any
State or local sales tax. This tax does not apply to accommodations
furnished by nonprofit charitable, educational, or religious organizations, by
summer camps, or by businesses that offer to rent no more than five units.
.…"
SECTION 60.(l) Section 4 of Chapter 605 of the 1991 Session Laws is repealed.
SECTION 60.(m) Section 1 of Chapter 561 of the 1987 Session Laws reads as rewritten:
"Section 1. Occupancy Tax.
(a) Authorization and scope. The Lenoir County Board of Commissioners may by
resolution, after not less than ten days' public notice and after a public
hearing held pursuant thereto, levy a room occupancy tax of three percent (3%)
of the gross receipts derived from the rental of any room, lodging, or similar
accommodation furnished by a hotel, motel, inn, tourist camp, or similar place
within the county that is subject to sales tax imposed by the State under G.S. 105‑164.4(3).
This tax is in addition to any State or local sales tax. This tax does not
apply to accommodations furnished by nonprofit charitable, educational, or
religious organizations, by summer camps, or by businesses that offer to rent
no more than five units.
…."
SECTION 60.(n) Section 3 of Chapter 647 of the 1987 Session Laws is repealed.
SECTION 60.(o) Section 1 of Chapter 950 of the 1987 Session Laws reads as rewritten:
"Section 1. Occupancy tax.
(a) Authorization and scope. The Alamance County Board of Commissioners may by
resolution, after not less than 10 days' public notice and after a public
hearing held pursuant thereto, levy a room occupancy tax of three percent (3%)
of the gross receipts derived from the rental of any room, lodging, or similar
accommodation furnished by a hotel, motel, inn, or similar place within the
county that is subject to sales tax imposed by the State under G.S. 105‑164.4(3).
This tax is in addition to any State or local sales tax. This tax does not
apply to gross receipts derived by the following entities from accommodations
furnished by them:
(1) Nonprofit
charitable organizations;
(2) religious
organizations;
(3) educational
organizations; and
(4) any business
that offers to rent fewer than five units.
…."
SECTION 60.(p) Section 3 of Chapter 22 of the 1991 Session Laws is repealed.
SECTION 60.(q) Section 1 of Chapter 162 of the 1991 Session Laws, as amended by Section 1 of S.L. 2004‑106 and Section 1 of S.L. 2011‑170, reads as rewritten:
"Section 1.
Occupancy tax. (a) Authorization and Scope. – The Alleghany County Board of Commissioners
may levy a room occupancy tax of three percent (3%) of the gross receipts
derived from the rental of any room, lodging, or accommodation furnished by a
hotel, motel, inn, tourist camp, or similar place within the county that is
subject to sales tax imposed by the State under G.S. 105‑164.4(a)(3).
This tax is in addition to any State or local sales tax. This tax does not
apply to accommodations furnished by a summer camp for minors, or by a
nonprofit charitable, educational, or religious organization.
…."
SECTION 60.(r) Section 1 of Chapter 648 of the 1993 Session Laws reads as rewritten:
"Section 1. Occupancy Tax.
(a) Authorization and scope. The Kinston City Council may by resolution, after
not less than 10 days' public notice and after a public hearing held pursuant
thereto, levy a room occupancy tax of three percent (3%) of the gross receipts
derived from the rental of any room, lodging, or similar accommodation
furnished by a hotel, motel, inn, tourist camp, or similar place within the city
that is subject to sales tax imposed by the State under G.S. 105‑164.4(a)(3).
This tax is in addition to any State or local sales tax. This tax does not
apply to accommodations furnished by nonprofit charitable, educational, or
religious organizations, by summer camps, or by businesses that offer to rent
no more than five units.
.…"
SECTION 60.(s) Section 1 of Chapter 209 of the 1987 Session Laws, as amended by Chapter 155 of the 1991 Session Laws, S.L. 1999‑155, and S.L. 2004‑95, reads as rewritten:
"Section 1. Occupancy tax.
(a) Authorization and scope. The Currituck County Board of Commissioners may
levy a room occupancy tax of three percent (3%) of the gross receipts derived
from the rental of any room, lodging, or similar accommodation furnished by a hotel,
motel, inn, or similar place within the county that is subject to sales tax
imposed by the State under G.S. 105‑164.4(a)(3), or from the
rental of a campsite within the county.G.S. 105‑164.4(a)(3).
This tax is in addition to any State or local sales tax. This tax does not
apply to accommodations furnished by nonprofit charitable, educational, or
religious organizations when furnished in furtherance of their nonprofit
purpose.
…."
SECTION 60.(t) Section 1(a) of Chapter 449 of the 1985 Session Laws, as amended by Chapter 826 of the 1985 Session Laws, Chapters 177 and 906 of the 1991 Session Laws, and Part VII of S.L. 2001‑439, reads as rewritten:
"Section 1. Occupancy Tax.
(a) Authorization and Scope. The Dare County Board of Commissioners may levy a
room occupancy tax of three percent (3%) of the gross receipts derived from the
rental of the following in Dare County:
(1) Any any
room, lodging, or similar accommodation within the county that is subject
to sales tax under G.S. 105‑164.4(a)(3); and
(2) A campsite.G.S. 105‑164.4(a)(3).
This tax does not apply to
accommodations furnished by nonprofit charitable, educational, or religious
organizations when furnished in furtherance of their nonprofit purpose. This
tax is in addition to any State or local sales tax."
tax & tag together motor vehicle property tax changes
SECTION 70.(a) Section 22(d) of S.L. 2007‑527, as amended by Section 66 of S.L. 2008‑134 and Section 22(b) of S.L. 2010‑95, reads as rewritten:
"SECTION 22.(d)
Subsection (c) of this section becomes effective July 1, 2013, or when the
Division of Motor Vehicles of the Department of Transportation and the
Department of Revenue certify that the integrated computer system for
registration renewal and property tax collection for motor vehicles is in
operation, whichever occurs first. July 1, 2013. The remainder of
this section is effective when it becomes law."
SECTION 70.(b) Section 24(c) of S.L. 2009‑445, as amended by Section 22(c) of S.L. 2010‑95, reads as rewritten:
"SECTION 24.(c) G.S. 105‑330.9
and G.S. 105‑330.11, as amended in subsection (a) of this section,
are effective when this act becomes law. Subsection (b) of this section and the
remainder of subsection (a) of this section become effective July 1, 2013, and
apply to combined tax and registration notices issued on or after that date,
or when the Division of Motor Vehicles and the Department of Revenue certify
that the integrated computer system or registration renewal and property tax
collection for motor vehicles is in operation, whichever occurs first. date.
Counties may continue to collect property taxes on motor vehicles for taxable
years beginning on or before September 1, 2013, under the provisions of Article
22A of Chapter 105 of the General Statutes as those statutes are in effect on
June 30, 2013. The remainder of this section is effective when it becomes
law."
SECTION 70.(c) Section 8 of S.L. 2007‑471, as amended by Section 25(a) of S.L. 2009‑445, and Section 22(d) of 2010‑95, reads as rewritten:
"SECTION 8. Unless
otherwise stated, this act becomes effective July 1, 2013, and applies to
combined tax and registration notices issued on or after that date, or when
the Division of Motor Vehicles and the Department of Revenue certify that the
integrated computer system for registration renewal and property tax collection
for motor vehicles is in operation, whichever occurs first.date. Counties
may continue to collect property taxes on motor vehicles for taxable years
beginning on or before September 1, 2013, under the provisions of Article 22A
of Chapter 105 of the General Statutes as those statutes are in effect on June
30, 2013."
SECTION 70.(d) Section 13 of S.L. 2005‑294, as amended by Section 31.5 of S.L. 2006‑259, Section 22(b) of S.L. 2007‑257, Section 65 of S.L. 2008‑134, and Section 3.6 of S.L. 2012‑79, reads as rewritten:
"SECTION 13. Sections
4 and 8 of this act become effective January 1, 2006. Sections 1, 2, 3, 5, 6,
7, 10 and 11 of this act become effective July 1, 2013, or when the Division
of Motor Vehicles of the Department of Transportation and the Department of
Revenue certify that the integrated computer system for registration renewal
and property tax collection for motor vehicles is in operation, whichever
occurs first. and apply to combined tax and registration notices issued
on or after that date. Counties may continue to collect property taxes on motor
vehicles for taxable years beginning on or before September 1, 2013, under the
provisions of Article 22A of Chapter 105 of the General Statutes as those
statutes are in effect on June 30, 2013. Sections 12 and 13 of this act are
effective when they become law. Nothing in this act shall require the General
Assembly to appropriate funds to implement it for the biennium ending June 30,
2007."
SECTION 70.(e) This section is effective when it becomes law.
SECTION 71.(a) Effective June 26, 2012, Sections 3.2, 3.3, and 3.4 of S.L. 2012‑79 are repealed.
SECTION 71.(b) Effective July 1, 2013, G.S. 105‑330.2, as amended by Section 2 of S.L. 2005‑294 and Section 24(a) of S.L. 2009‑445, reads as rewritten:
"§ 105‑330.2. Appraisal, ownership, and situs.
…
(b1) Valuation Appeal.
– The owner of a classified motor vehicle may appeal the appraised value or
taxability of the vehicle by filing a request for appeal with the assessor within
30 days of the date taxes are due on the vehicle under G.S. 105‑330.4.
An owner who appeals the appraised value or taxability of a classified
motor vehicle must pay the tax on the vehicle when due, subject to a full or
partial refund if the appeal is decided in the owner's favor.
The combined tax and registration
notice or tax receipt for a classified motor vehicle must explain the right to
appeal the appraised value and taxability of the vehicle. A lessee of a
vehicle that is required by the terms of the lease to pay the tax on the
vehicle is considered the owner of the vehicle for purposes of filing an appeal
under this subsection. Appeals filed under this subsection shall proceed in
the manner provided in G.S. 105‑312(d).
(b2) Exemption or Exclusion Appeal. – The owner of a classified motor vehicle may appeal the vehicle's eligibility for an exemption or exclusion by filing a request for appeal with the assessor within 30 days of the assessor's initial decision on the exemption or exclusion application filed by the owner pursuant to G.S. 105‑330.3(b). Appeals filed under this subsection shall proceed in the manner provided in G.S. 105‑312(d).
…."
SECTION 71.(c) Effective July 1, 2013, G.S. 105‑330.3, as amended by Section 24(a) of S.L. 2009‑445, reads as rewritten:
"§ 105‑330.3. Listing requirements for classified motor vehicles; application for exempt status.
…
(a1) Unregistered Vehicles. –
The owner of an unregistered classified motor vehicle must list the vehicle for
taxes by filing an abstract with the assessor of the county in which the
vehicle is located on or before January 31 following the date the owner
acquired the unregistered vehicle or, in the case of a registration that is not
renewed, January 31 following the date the registration expires, and on or
before January 31 of each succeeding year that the vehicle is unregistered. If
a classified motor vehicle required to be listed pursuant to this
subsection is registered during the calendarbefore the end of the
fiscal year in for which it was listed, the vehicle is
taxed for the fiscal year that opens in the calendar year of listing as an
unregistered vehicle.required to be listed, the following applies:
(1) The vehicle is taxed as a registered vehicle, and the tax assessed pursuant to this subsection for the fiscal year in which the vehicle was required to be listed shall be released and/or refunded.
(2) For any months for which the vehicle was not taxed between the date the registration expired and the start of the current registered vehicle tax year, the vehicle is taxed as an unregistered vehicle as follows:
a. The value of the motor vehicle is determined as of January 1 of the year in which the registration of the motor vehicle expires.
b. In computing the taxes, the assessor must use the tax rates and any additional motor vehicle taxes of the various taxing units in effect on the date the taxes are computed.
c. The tax on the motor vehicle is the product of a fraction and the number of months for which the vehicle was not taxed between the date the registration expires and the start of the current registered vehicle tax year. The numerator of the fraction is the product of the appraised value of the motor vehicle and the tax rate of the various taxing units. The denominator of the fraction is 12.
d. The taxes are due on the first day of the second month following the month the notice was prepared.
e. Interest accrues on unpaid taxes for these unregistered classified motor vehicles at the rate of five percent (5%) for the remainder of the month following the month the taxes are due. Interest accrues at the rate of three‑fourths percent (3/4%) for each following month until the taxes are paid, unless the notice is prepared after the date the taxes are due. In that circumstance, the interest accrues beginning the second month following the date of the notice until the taxes are paid.
(3) A vehicle
required to be listed pursuant to this subsection that is not listed by January
31 and is not registered before the end of the fiscal year for which it was
required to be listed is subject to discovery pursuant to G.S. 105‑312,
unless the vehicle has been taxed as a registered vehicle for the current year.G.S. 105‑312.
(b) Exemption or Exclusion.
– The owner of a classified motor vehicle who claims an exemption or exclusion
from tax under this Subchapter has the burden of establishing that the vehicle
is entitled to the exemption or exclusion. The owner may establish prima facie
entitlement to exemption or exclusion of the classified motor vehicle by filing
an application for exempt status with the assessor.assessor within 30
days of the date taxes on the vehicle are due. When an approved application
is on file, the assessor must omit from the tax records the classified motor
vehicles described in the application. An application is not required for
vehicles qualifying for the exemptions or exclusions listed in G.S. 105‑282.1(a)(1).
The remaining provisions of G.S. 105‑282.1 do not apply to
classified motor vehicles.
…."
SECTION 71.(d) Effective July 1, 2013, G.S. 105‑330.4, as amended by Sections 4 and 5 of S.L. 2005‑294 and Section 24(a) of S.L. 2009‑445, reads as rewritten:
"§ 105‑330.4. Due date, interest, and enforcement remedies.
(a) Due Date. – The
registration of a classified motor vehicle may not be issued unless a temporary
registration plate is issued for the motor vehicle under G.S. 20‑79.1A
or the taxes for the motor vehicle's tax year that begins after the issuance of
the registration are paid upon registration. A registration of a classified motor
vehicle may not be renewed unless the taxes that are due have been paid.
for the motor vehicle's tax year that begins after the registration
expires are paid upon registration. If the registration of a classified motor
vehicle is renewed earlier than the date the taxes are due, the taxes must be
paid as if they were due. Taxes on a classified motor vehicle are due as
follows:
(1) For an unregistered classified motor vehicle, the taxes are due on September 1 following the date by which the vehicle was required to be listed.
(2) For a registered classified motor vehicle that is registered under the staggered system, the taxes are due each year on the date the owner applies for a new registration or the fifteenth day of the month following the month in which the registration renewal sticker expires pursuant to G.S. 20‑66(g).
(3) For a registered classified motor vehicle that is registered under the annual system, taxes are due on the date the owner applies for a new registration or 45 days after the registration expires.
(4) For a registered classified motor vehicle that has a temporary registration plate issued under G.S. 20‑79.1 or a limited registration plate issued under G.S. 20‑79.1A, the taxes are due on the last day of the second month following the date the owner applied for the plate.
…
(b) Interest. – Interest
accrues on unpaid taxes and unpaid registration fees for registered classified
motor vehicles at the rate of five percent (5%) for the remainder of the month following
the month the taxes are due under subsection (a) of this section. Interest does
not accrue for the first month following the due date. Interest accrues at
the rate of three‑fourths percent (3/4%) beginning the second month
following the due date and for each following month until the taxes and
fees are paid, unless the notice required by G.S. 105‑330.5 is
prepared after the date the taxes and fees are due. In that circumstance, the
interest accrues beginning the second month following the date of the notice
until the taxes and fees are paid. paid. Subject to the provisions
of G.S. 105‑395.1, interest accrues on delinquent taxes on
unregistered classified motor vehicles as provided in G.S. 105‑360(a)
and the discounts allowed in G.S. 105‑360(a) apply to the payment of
the taxes.
(c) Remedies. – The
enforcement remedies in this Subchapter apply to unpaid taxes on an
unregistered classified motor vehicle. The enforcement remedies in this
Subchapter do not apply vehicle and to unpaid taxes on a registered
classified motor vehicle.vehicle for which the tax year begins before
October 1, 2013.
(d) Payments. – Tax
payments submitted by mail are deemed to be received as of the date shown on
the postmark affixed by the United States Postal Service. If no date is shown
on the postmark or if the postmark is not affixed by the United States Postal
Service, the tax payment is deemed to be received when the payment is received in
the office of the tax collector.by the collecting authority. In any
dispute arising under this subsection, the burden of proof is on the taxpayer
to show that the payment was timely made."
SECTION 72. Effective July 1, 2013, G.S. 105‑330.1(b), as amended by Section 24(a) of S.L. 2009‑445, reads as rewritten:
"(b) Exceptions. – The following motor vehicles are not classified under subsection (a) of this section:
(1) Motor vehicles exempt from registration pursuant to G.S. 20‑51.
(2) Manufactured homes, mobile classrooms, and mobile offices.
(3) Semitrailers or trailers registered on a multiyear basis.
(4) Motor vehicles owned or leased by a public service company and appraised under G.S. 105‑335.
(5) Repealed by Session Laws 2000, c. 140, s. 75(a), effective July 1, 2000.
(6) Motor vehicles registered under the International Registration Plan.
(7) Motor vehicles issued permanent registration plates under G.S. 20‑84.
(8) Self‑propelled property‑carrying vehicles issued three‑month registration plates at the farmer rate under G.S. 20‑88.
(9) Motor vehicles owned by participants in the Address Confidentiality Program authorized under Chapter 15C of the General Statutes."
effective date
SECTION 80. Sections 5, 6, and 7 of this act are effective for taxable years beginning on or after January 1, 2012. Except as otherwise provided, the remainder of this act is effective when it becomes law.
In the General Assembly read three times and ratified this the 24th day of July, 2013.
s/ Louis M. Pate, Jr.
Deputy President Pro Tempore of the Senate
s/ Thom Tillis
Speaker of the House of Representatives
s/ Pat McCrory
Governor
Approved 10:54 a.m. this 23rd day of August, 2013