GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2003

 

 

SESSION LAW 2003-431

SENATE BILL 100

 

 

AN ACT to promote efficiency in state government by allowing a sales and use tax exemption for state agencies instead of a sales and use tax refund to state agencies and to allow a sales and use tax refund to school board cooperatives.

 

The General Assembly of North Carolina enacts:

 

SECTION 1.  G.S. 105-164.13 is amended by adding a new subdivision to read:

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

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

…

(52)     Items subject to sales and use tax under G.S. 105-164.4, other than electricity and telecommunications service, if all of the following conditions are met:

a.         The items are purchased by a State agency for its own use and in accordance with G.S. 105-164.29A.

b.         The items are purchased pursuant to a valid purchase order issued by the State agency that contains the exemption number of the agency and a description of the property purchased, or the items purchased are paid for with a State-issued check, electronic deposit, credit card, procurement card, or credit account of the State agency.

c.         For all purchases other than by an agency-issued purchase order, the agency must provide to or have on file with the retailer the agency's exemption number."

SECTION 2.  G.S. 105-164.14(c) reads as rewritten:

"(c)      Certain Governmental Entities. - A governmental entity listed in this subsection is allowed an annual refund of sales and use taxes paid by it under this Article, except under G.S. 105-164.4(a)(4a) and G.S. 105-164.4(a)(4c), Article on direct purchases of tangible personal property. property and services, other than electricity and telecommunications 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:

(1)       A county.

(2)       A city as defined in G.S. 160A-1.

(2a)     A consolidated city-county as defined in G.S. 160B-2.

(2b)     A local school administrative unit.

(2c)     A joint agency created by interlocal agreement among local school administrative units pursuant to G.S. 160A-462 to jointly purchase food service-related materials, supplies, and equipment on their behalf.

(3)       A metropolitan sewerage district or a metropolitan water district in this State.

(4)       A water and sewer authority created under Chapter 162A of the General Statutes.

(5)       A lake authority created by a board of county commissioners pursuant to an act of the General Assembly.

(6)       A sanitary district.

(7)       A regional solid waste management authority created pursuant to G.S. 153A-421.

(8)       An area mental health, developmental disabilities, and substance abuse authority, other than a single-county area authority, established pursuant to Article 4 of Chapter 122C of the General Statutes.

(9)       A district health department, or a public health authority created pursuant to Part 1A of Article 2 of Chapter 130A of the General Statutes.

(10)     A regional council of governments created pursuant to G.S. 160A-470.

(11)     A regional planning and economic development commission or a regional economic development commission created pursuant to Chapter 158 of the General Statutes.

(12)     A regional planning commission created pursuant to G.S. 153A-391.

(13)     A regional sports authority created pursuant to G.S. 160A-479.

(14)     A public transportation authority created pursuant to Article 25 of Chapter 160A of the General Statutes.

(14a)   A facility authority created pursuant to Part 4 of Article 20 of Chapter 160A of the General Statutes.

(15)     A regional public transportation authority created pursuant to Article 26 of Chapter 160A of the General Statutes, or a regional transportation authority created pursuant to Article 27 of Chapter 160A of the General Statutes.

(16)     A local airport authority that was created pursuant to a local act of the General Assembly.

(17)     A joint agency created by interlocal agreement pursuant to G.S. 160A-462 to operate a public broadcasting television station.

(18)     Repealed by Session Laws 2001-474, s. 7.

(19)     Repealed by Session Laws 2001-474, s. 7.

(20)     A constituent institution of The University of North Carolina, but only with respect to sales and use tax paid by it for tangible personal property acquired by it through the expenditure of contract and grant funds.

(21)     The University of North Carolina Hospitals at Chapel Hill.

(22)     A regional natural gas district created pursuant to Article 28 of Chapter 160A of the General Statutes."

SECTION 3.  G.S. 105-164.14(e) reads as rewritten:

"(e)      State Agencies. - The State is allowed quarterly refunds of local sales and use taxes paid by a State agency on direct purchases of tangible personal property and local sales and use taxes paid indirectly by the State agency on building materials, supplies, fixtures, and equipment that become a part of or annexed to a building or structure that is owned or leased by the State agency and is being erected, altered, or repaired for use by the State agency. This subsection does not apply to purchases for which a State agency is allowed a refund under subsection (c) of this section.

A person who pays local sales and use taxes on building materials or other tangible personal property for a State building project shall give the State agency for whose project the property was purchased a signed statement containing all of the following information:

(1)       The date the property was purchased.

(2)       The type of property purchased.

(3)       The project for which the property was used.

(4)       If the property was purchased in this State, the county in which it was purchased.

(5)       If the property was not purchased in this State, the county in which the property was used.

(6)       The amount of sales and use taxes paid.

If the property was purchased in this State, the person shall attach a copy of the sales receipt to the statement. A State agency to whom a statement is submitted shall verify the accuracy of the statement.

Within 15 days after the end of each calendar quarter, every State agency shall file with the Secretary a written application for a refund of taxes to which this subsection applies paid by the agency during the quarter. The application shall contain all information required by the Secretary. The Secretary shall credit the local sales and use tax refunds directly to the General Fund."

SECTION 4.  Part 5 of Article 5 of Chapter 105 of the General Statutes is amended by adding a new section to read:

"§ 105-164.29A.  State government exemption process.

(a)       Application. - To be eligible for the exemption provided in G.S. 105-164.13(51), a State agency must obtain from the Department a sales tax exemption number. The application for exemption must be in the form required by the Secretary, be signed by the State agency's head, and contain any information required by the Secretary. The Secretary must assign a sales tax exemption number to a State agency that submits a proper application.

(b)       Liability. - A State agency that does not use the items purchased with its exemption number must pay the tax that should have been paid on the items purchased, plus interest calculated from the date the tax would otherwise have been paid."

SECTION 5.  The Office of State Budget and Management must reduce each State agency's certified budget for fiscal years 2003-2004 and 2004-2005 by an appropriate amount to reflect the tax savings generated by the sales and use tax exemption for State agencies allowed under this act.

 

SECTION 6.  Section 2 of this act is effective for taxes paid on or after July 1, 2003.  Section 4 of this act becomes effective January 1, 2004.  The remainder of this act becomes effective July 1, 2004, and applies to sales made on or after that date.

In the General Assembly read three times and ratified this the 18th day of July, 2003.

 

 

                                                                    s/ Beverly E. Perdue

                                                                         President of the Senate

 

 

                                                                    s/ Richard T. Morgan

                                                                         Speaker of the House of Representatives

 

 

                                                                    s/ Michael F. Easley

                                                                         Governor

 

 

Approved 1:39 p.m. this 19th day of August, 2003