GENERAL
ASSEMBLY OF NORTH CAROLINA
SESSION 1989
Committee
Substitute Favorable 4/7/89
Committee
Substitute #2 Favorable 5/30/89
Fourth Edition
Engrossed 6/1/89
Finance Senate Committee Substitute Adopted 6/29/89 with
Amendments 1,2,&3
Sixth Edition
Engrossed 7/4/89
Short Title: Highway Trust Fund/General Fund Revenue. (Public)
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The General Assembly of North Carolina
enacts:
CONTENTS
I. NORTH CAROLINA HIGHWAY TRUST FUND
II. CERTIFICATE OF TITLE FEE/ALTERNATE TRANSPORTATION
FUNDING
III. SALES TAX CHANGES
IV. MOTOR VEHICLE USE TAX
V. MOTOR FUEL TAX
VI. ESTIMATED INCOME TAX AMENDMENTS
VII. EFFECTIVE DATES
PART I.
HIGHWAY TRUST FUND.
Section 1.1. Chapter 136 of the General Statutes is
amended by adding a new Article to read:
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Sec. 1.2. Chapter 120 of the General Statutes is
amended by adding a new Article to read:
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Sec. 1.3. Article 2 of Chapter 136 of the General
Statutes is amended by adding a new section to read:
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(1)
(2)
(3)
(4)
(1)
(2)
(3)
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Sec. 1.4. G.S. 136-41.1(a) reads as rewritten:
"(a) There is hereby annually
appropriated out of the State Highway Fund a sum equal to the net amount after
refunds that was produced during the fiscal year by a one and three-fourths
cents (1 3/4¢) tax on each gallon of motor fuel as taxed by G.S. 105-434 and
105-435, to be allocated in cash on or before October 1 of each year to the
cities and towns of the State in accordance with the following formula:
Seventy-five percent (75%) of said funds shall be
distributed among the several eligible municipalities of the State in the
percentage proportion that the population of each eligible municipality bears
to the total population of all eligible municipalities according to the most
recent annual estimates of population as certified to the Secretary of Revenue
by the State Budget Officer. This annual estimation of population shall include
increases in the population within the municipalities caused by annexations
accomplished through July 1 of the calendar year in which these funds are
distributed. Twenty-five percent (25%) of said fund shall be distributed among
the several eligible municipalities of the State in the percentage proportion
that the mileage of public streets in each eligible municipality which does not
form a part of the highway system bears to the total mileage of the public
streets in all eligible municipalities which do not constitute a part of the
State highway system.
It shall be the duty of the mayor of each municipality to
report to the Department of Transportation such information as it may request
for its guidance in determining the eligibility of each municipality to receive
funds by virtue of G.S. 136-41.1 and 136-41.2 and in determining the amount of
allocation to which each is entitled. Upon failure of any municipality to make
such report within the time prescribed by the Department of Transportation, the
Department of Transportation may disregard such defaulting unit in making said
allotment.
The funds to be allocated under this section shall be paid
in cash to the various eligible municipalities on or before October 1 each year
after March 15, 1951. Provided that eligible municipalities are authorized
within the discretion of their governing bodies to enter into contracts for the
purpose of maintenance, repair, construction, reconstruction, widening, or
improving streets of such municipalities at any time after January 1 of any
calendar year in total amounts not to exceed ninety percent (90%) of the amount
received by such municipality during the preceding fiscal year, in anticipation
of the receipt of funds under this section during the next fiscal year, to be
paid for out of such funds when received.
No allocation to cities and towns shall be made under the
provisions of this section from the one cent (1¢) per gallon additional tax on
gasoline imposed by Chapter 46 of the Session Laws of 1965, unless and until
said additional one cent (1¢) per gallon tax produces funds which are not
needed for or committed by said Chapter 46 of the Session Laws of 1965, to the
payment of the principal of or the interest on the secondary road bonds issued
pursuant to the provisions of said Chapter 46 of the Session Laws of 1965. The
Department of Transportation is hereby authorized to withhold each year an
amount not to exceed one percent (1%) of the total amount appropriated in G.S.
136-41.1 for the purpose of correcting errors in allocations: Provided, that
the amount so withheld and not used for correcting errors will be carried over
and added to the amount to be allocated for the following year.
The word ‘street' as used in this section is hereby
defined as any public road maintained by a municipality and open to use by the
general public, and having an average width of not less than 16 feet. In order
to obtain the necessary information to distribute the funds herein allocated,
the Department of Transportation may require that each municipality eligible to
receive funds under G.S. 136-41.1 and 136-41.2 submit to it a statement, certified
by a registered engineer or surveyor of the total number of miles of streets in
such municipality. The Department of Transportation may in its discretion
require the certification of mileage on a biennial basis."
Sec. 1.5. G.S. 136-44.2A reads as rewritten:
"§ 136-44.2A.
Secondary road construction.
There shall be annually allocated out of the State Highway
Fund to the Department of Transportation for secondary road construction
programs developed pursuant to G.S. 136-44.7 and 136-44.8, a sum equal to that
allocation made under G.S. 136-41.1(a). Such secondary roads allocation shall
be made in accordance with the provisions of G.S. 136-44.5. "
Sec. 1.6. G.S. 136-44.5 reads as rewritten:
"§ 136-44.5.
Secondary roads; mileage study; allocation of funds.
Before July 1, in each calendar year, the Department of
Transportation shall make a study of all state-maintained unpaved roads in the
State. The study shall determine the number of miles of unpaved
state-maintained roads in each county, and the total number of miles of unpaved
state-maintained roads in the State. Except for federal-aid programs, the
Department shall allocate all secondary road construction funds on the basis of
a formula using the study figures. The allocation shall be
as follows: Each county shall receive a percentage of the
total funds available for totally state-funded secondary road construction, the
percentage to be determined as a factor of the number of miles of unpaved
state-maintained secondary roads in the county divided by the total number of
miles of unpaved state-maintained secondary roads in the State.
Copies of the Department study of unpaved state-maintained
secondary roads and copies of the individual county allocations shall be made
available to newspapers having general circulation in each county."
Sec. 1.7. G.S. 136-44.7 reads as rewritten:
"§ 136-44.7.
Secondary roads; annual work program.
The Department of Transportation shall be responsible for
developing criteria for improvements and maintenance of secondary roads. The
criteria shall be adopted by the Board of Transportation before it shall become
effective. The Department of Transportation shall be responsible for developing
annual work programs for both construction and maintenance of secondary roads
in each county in accordance with criteria developed. It shall reflect the
long-range and immediate goals of the Department of Transportation. Projects on
the annual construction program for each county shall be rated according to
their priority based upon the secondary road criteria and standards which shall
be uniform throughout the State. Tentative construction projects and estimated
funding shall also be listed in accordance to priority. The annual construction
program shall be adopted by the Board of Transportation before it shall become
effective.
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Sec. 1.8. G.S. 143B-350(f)(4) reads as rewritten:
"(4) To approve a schedule of all major
transportation improvement projects and their anticipated cost for a period of
seven years into the future which shall be published in a single document along
with a report of the progress accomplished in the past year and the anticipated
funding sources for these projects; ".
Sec. 1.9. The Department of Transportation shall
determine on which highways and bridges it is economically feasible to collect
tolls and shall report its findings to the General Assembly. If the Department
finds it desirable to establish toll roads, the Department shall include in its
report any legislation needed to establish toll roads and to implement the
collection of tolls, including the creation of a North Carolina Toll Roads
Authority.
Sec. 1.10. G.S. 105-445 reads as rewritten:
"§ 105-445.
Application of proceeds of gasoline tax. Except as provided in G.S. 105-446.2
and 136-41.1, the fund derived from the tax herein levied shall be for the
exclusive uses of the purposes set out in this Article, and disbursed on
vouchers drawn by the Board of Transportation in accordance with the acts of
the General Assembly dealing with the subject matter herein referred to.
"
Sec. 1.11. G.S. 105-446.2(a) reads as rewritten:
"(a) The North Carolina Wildlife
Resources Commission shall receive one eighth of one percent (1/8 of 1%) of the
net proceeds of the taxes on motor fuels levied under G.S. 105-434 and the same
shall be paid in accordance with the accounting periods as set forth under G.S.
105-440(a). As used in this section ‘net proceeds' shall mean the entire tax
collected less one cent (1¢) per gallon nonrebatable tax required to be
segregated by Chapter 1250 of the Session Laws of 1949, as amended by Chapter
46 of the Session Laws of 1965. "
Sec. 1.12. G.S. 105-449.16 reads as rewritten:
"§
105-449.16. Levy of tax; purposes; special provisions for certain nonanhydrous
ethanol.
"(a) A tax at the rate established
pursuant to G.S. 105-434 is hereby imposed upon all fuel sold or delivered by
any supplier to any licensed user-seller, or used by any such supplier in any
motor vehicle owned, leased or operated by him, or delivered by such supplier
directly into the fuel supply tank of a motor vehicle, or imported by a
user-seller into, or acquired tax free by a user-seller or user in this State
for resale or use for the propulsion of a motor vehicle.
A supplier who consigns fuel to a reseller may elect to report
and pay the tax due on the fuel when the reseller sells or dispenses the fuel
instead of when the supplier delivers the fuel to the reseller. For the purpose
of this section, "imported”shall not include fuels brought into
this State in the usual tank or receptacle connected with the engine of a motor
vehicle.
The primary purposes of this levy and this Article are to
provide a more efficient and effective method of collecting the tax now imposed
and collected pursuant to G.S. 105-435, by providing for the collection of
said tax from the supplier instead of the user. The tax herein provided for is
levied for the same purposes as the tax provided for in G.S. 105-435. It is not
intended that the tax collected pursuant to this Article shall be in addition
to that provided in G.S. 105-435, but the payment of the tax as provided by
this Article shall be deemed conclusively to constitute a compliance with the
provisions of G.S. 105-43the provisions of section 13 of Chapter 1250 of the
Session Laws of 1949, relating to G.S. 105- 435, in that one cent (1¢) of the
amount of tax levied on each gallon shall be applied exclusively to the payment
of the principal of and the interest on the two hundred million dollars
($200,000,000) State of North Carolina Secondary Road Bonds therein provided
for and as further provided in said Chapter 1250 of the Session Laws of 1949.
(b) Repealed by Session Laws 1985, c. 261, s.
1, effective July 1, 1985.
(c) Nonanhydrous ethanol is exempt from the
tax described in this section if that ethanol is not for sale or
distribution."
Sec. 1.13. G.S. 105-449.43 reads as rewritten:
"§
105-449.43. Taxes and fees to be paid to Highway Fund.
All taxes and fees collected under this Article shall be
paid to the State Highway Fund. "
Sec. 1.14. Notwithstanding G.S. 136-176(b), the sum
of $11,000,000 for the 1989-90 fiscal year is appropriated from the Highway
Trust Fund to the Department of Transportation for administrative expenses of
the Trust Fund. This appropriation is in lieu of the allocation under G.S.
136-176(b).
Sec. 1.15. Article 2 of Chapter 136 of the General
Statutes is amended by adding a new section to read:
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PART II.
INCREASE
CERTIFICATE OF TITLE FEE/ ALTERNATE
TRANSPORTATION
FUNDING.
Sec. 2.1. G.S. 20-85 reads as rewritten:
"§ 20-85.
Schedule of fees.
Except as provided in G.S. 20-68, there shall be paid to
the Division for the issuance of certificates of title, transfer of
registration and replacement of registration plates fees according to the
following schedules:
(1) Each application for certificate of
title $5.00
(2) Each application for duplicate
or corrected certificate of title 7.00
(3) Each application of repossessor for
certificate of title 5.00
(4) Each transfer of registration 4.00
(5) Each set of replacement registration
plates 9.00
(6) Each application for duplicate
registration
certificate 3.00
(7) Each application for recording
supplementary
lien 3.00
(8) Each application for removing a lien from
a
certificate of title 4.00.
"
Sec. 2.2. G.S. 136-44.20 is amended by adding a new
subsection to read:
"("
PART III.
SALES TAX CHANGES.
Sec. 3.1. G.S. 105-164.3 reads as rewritten:
"§
105-164.3. Definitions. The words, terms and phrases when used in this
Article shall have the meanings ascribed to them in this section except when
the context clearly indicates a different meaning:
(1) ‘Business' shall include any activity
engaged in by any person or caused to be engaged in by him with the object of
gain, profit, benefit or advantage, either direct or indirect. The term
‘business' shall not be construed in this Article to include occasional and
isolated sales or transactions by a person who does not hold himself out as
engaged in business.
(2) " Secretary”shall mean
the Secretary of Revenue of the State of North Carolina.
(3) ‘Consumer' shall mean and include every
person storing, using or otherwise consuming in this State tangible personal
property purchased or received from a retailer either within or without this
State.
(4) ‘Cost price' means the actual cost of
articles of tangible personal property without any deductions therefrom on
account of the cost of materials used, cash discounts, labor or service costs,
transportation charges or any expenses whatsoever.
(5) ‘Engaged in business' shall mean maintaining,
occupying or using permanently or temporarily, directly or indirectly, or
through a subsidiary or agent, by whatever name called, any office, place of
distribution, sales or sample room or place, warehouse or storage place, or
other place of business, for the selling or delivering of tangible personal
property for storage, use or consumption in this State, or permanently or
temporarily, directly or through a subsidiary, having any representative,
agent, salesman, canvasser or solicitor operating in this State in such selling
or delivering, and the fact that any corporate retailer, agent or subsidiary
engaged in business in this State may not be legally domesticated or qualified
to do business in this State shall be immaterial. It shall also mean the
maintaining in this State, either permanently or temporarily, directly or
through a subsidiary, tangible personal property for the purpose of lease or
rental. It shall also mean making a mail order sale, as defined in subdivision
(8a) of this section, if one of the conditions listed in G.S. 105-164.8(b) is
met.
(6) ‘Gross sales' means the sum total of all
retail sales of tangible personal property as defined herein, whether for cash
or credit without allowance for cash discount and without any deduction on
account of the cost of the property sold, the cost of materials used, labor or
service costs, interest paid or any other expenses whatsoever and without any
deductions of any kind or character except as provided in this Article.
(7) ‘In this (the) State' means within the
exterior limits of the State of North Carolina and includes all territory
within such limits owned by or ceded to the United States of America.
(8) ‘Lease
or rental' means the leasing or renting of tangible personal property and the possession
or use thereof by the lessee or rentee for a consideration without transfer of
the title of such property.
(8a) ‘Mail
order sale' means a sale of tangible personal property, ordered by mail,
telephone, computer link, or other similar method, to a purchaser who is in
this State at the time the order is remitted, from a retailer who receives the
order in another state and transports the property or causes it to be
transported to a person in this State. It is presumed that a resident of this
State who remits an order was in this State at the time the order was remitted.
(8b) ‘Motor vehicle' means any vehicle which is
self-propelled and designed primarily for use upon the highways, any vehicle
which is propelled by electric power obtained from trolley wires but not
operated upon rails, and any vehicle designed to run upon the highways which is
propelled by a self-propelled vehicle, but shall not include any implement of
husbandry, farm tractor, road construction or maintenance machinery or equipment,
special mobile equipment as defined in G.S. 20-4.01, or any vehicle designed
primarily for use in work off the highway.
(9) ‘Net taxable sales' shall mean and include
the gross retail sales of the business of the retailer taxed under this Article
after deducting therefrom exempt sales and nontaxable sales.
(10) ‘Nonresident retail or wholesale merchant'
means a person who does not have a place of business in this State, is engaged
in the business of acquiring, by purchase, consignment, or otherwise, tangible
personal property and selling the property outside the State, and is registered
for sales and use tax purposes in a taxing jurisdiction outside the State.
(11) ‘Person' includes any individual, firm,
copartnership, joint venture, association, corporation, estate, trust, business
trust, receiver, syndicate or other group, or combination acting as a unit,
body politic, or political subdivision, whether public or private or
quasi-public and the plural as well as the singular number.
(12) ‘Purchase' means acquired for a
consideration whether
a. Such acquisition was effected by a
transfer of title or possession, or both, or a license to use or consume;
b. Such transfer shall have been absolute or
conditional and by whatever means it shall have been effected; and
c. Such consideration be a price or rental
in money or by way of exchange or barter.
It shall also include the procuring of a
retailer to erect, install or apply tangible personal property for use in this
State.
(13) ‘Retail' shall mean the sale of any
tangible personal property in any quantity or quantities for any use or purpose
on the part of the purchaser other than for resale.
(14) ‘Retailer' means and includes every person
engaged in the business of making sales of tangible personal property at
retail, either within or without this State, or peddling the same or soliciting
or taking orders for sales, whether for immediate or future delivery, for
storage, use or consumption in this State and every manufacturer, producer or
contractor engaged in business in this State and selling, delivering, erecting,
installing or applying tangible personal property for use in this State
notwithstanding that said property may be permanently affixed to a building or
realty or other tangible personal property. ‘Retailer' also means a person who
makes a mail order sale, as defined in subdivision (8a) of this section, if one
of the conditions listed in G.S. 105-164.8(b) is met. Provided, however, that
when in the opinion of the Secretary it is necessary for the efficient
administration of this Article to regard any salesmen, solicitors,
representatives, consignees, peddlers, truckers or canvassers as agents of the
dealers, distributors, consignors, supervisors, employers or persons under whom
they operate or from whom they obtain the tangible personal property sold by
them regardless of whether they are making sales on their own behalf or on
behalf of such dealers, distributors, consignors, supervisors, employers or
persons, the Secretary may so regard them and may regard the dealers,
distributors, consignors, supervisors, employers or persons as ‘retailers' for
the purpose of this Article.
(15) ‘Sale' or ‘selling' shall mean any transfer
of title or possession, or both, exchange, barter, lease, license to use or
consume, or rental of tangible personal property, conditional or otherwise, in
any manner or by any means whatsoever, however effected and by whatever name
called, for a consideration paid or to be paid, and includes the fabrication of
tangible personal property for consumers by persons engaged in business who
furnish either directly or indirectly the materials used in the fabrication
work, and the furnishing, preparing, or serving for a consideration of any
tangible personal property consumed on the premises of the person furnishing,
preparing, or serving such tangible personal property or consumed at the place
at which such property is prepared, served or sold. A transaction whereby the
possession of the property is transferred but the seller retains title or
security for the payment of the price shall be deemed a sale.
(16) Except as provided in paragraph f., ‘sales
price' means the total amount for which tangible personal property is sold
including charges for any services that go into the fabrication, manufacture or
delivery of such tangible personal property and that are a part of the sale
valued in money whether paid in money or otherwise and includes any amount for
which credit is given to the purchaser by the seller without any deduction
therefrom on account of the cost of the property sold, the cost of materials
used, labor or service costs, interest charged, losses or any other expenses
whatsoever. Provided, however, that where a manufacturer, producer or
contractor erects, installs or affixes tangible personal property upon real
property pursuant to a construction or performance-type contract with or for
the benefit of the owner of such real property, the sales price shall be the
cost of such property to the manufacturer, producer or contractor performing
the contract. Provided, further:
a. The cost for labor or services rendered
in erecting, installing or applying property sold when separately charged shall
not be included as a part of the ‘sales price';
b. Finance charges, service charges or
interest from credit extended under conditional sales contracts or other
conditional contracts providing for deferred payments of the purchase price
shall not be considered a part of the ‘sales price' when separately charged;
c. ‘Sales price' shall not include the amount
of any tax imposed by the United States upon or with respect to retail sales
whether imposed upon the retailer or consumer except that any manufacturers' or
importers' excise tax shall be included in the term.
d. ‘Sales price' shall not include any amounts
charged as deposits on beverage containers which are returnable to vendors for
reuse and which amounts are refundable or creditable to vendees, whether or not
said deposits are separately charged.
e. ‘Sales price' shall not include amounts
charged as deposits on automotive, industrial, marine and farm replacement
parts which are returnable to vendors for rebuilding or remanufacturing and
which amounts are refundable or creditable to vendees, whether or not such
deposits are separately charged. This subsection shall not be construed to
include tires and batteries.
f. The sales price of tangible personal
property sold through a coin-operated vending machine, other than
closed-container soft drinks subject to excise tax under Article 2B of this
Chapter or tobacco products, is considered to be fifty percent (50%) of the
total amount for which the property is sold in the vending machine.
(17) ‘Storage' means and includes any keeping or
retention in this State for any purpose by the purchaser thereof, except sale
in the regular course of business, of tangible personal property purchased from
a retailer.
(18) ‘Use' means and includes the exercise of
any right or power or dominion whatsoever over tangible personal property by a
purchaser thereof and includes, but is not limited to, any withdrawal from
storage, installation, affixation to real or personal property, exhaustion or
consumption of tangible personal property by the owner or purchaser thereof,
but shall not include the sale of tangible personal property in the regular
course of business.
(19) ‘Storage' and ‘Use'; Exclusion. – ‘Storage'
and ‘use' do not include the keeping, retaining or exercising of any right or
power over tangible personal property by the purchaser thereof for the original
purpose of subsequently transporting it outside the State for use by said
purchaser thereafter solely outside the State and which purpose is consummated,
or for the purpose of being processed, fabricated or manufactured into,
attached to or incorporated into, other tangible personal property to be
transported outside the State and thereafter used by the purchaser thereof
solely outside the State.
(20) ‘Tangible personal property' means and
includes personal property which may be seen, weighed, measured, felt or touched
or is in any other manner perceptible to the senses. The term ‘tangible
personal property' shall not include stocks, bonds, notes, insurance or other
obligations or securities, nor shall it include water delivered by or through
main lines or pipes either for commercial or domestic use or consumption. The
term includes all ‘canned' or prewritten computer programs, either in the form
of written procedures or in the form of storage media on which or in which the
program is recorded, held, or existing for general or repeated sale, lease, or
license to use or consume. The term does not include the design, development,
writing, translation, fabrication, lease, license to use or consume, or
transfer for a consideration of title or possession of a custom computer
program, other than a basic operational program, either in the form of written
procedures or in the form of storage media on which or in which the program is
recorded, or any required documentation or manuals designed to facilitate the
use of the custom computer program.
As used in this subdivision:
a. ‘Basic operational program' or ‘control
program' means a computer program that is fundamental and necessary to the
functioning of a computer. A basic operational program is that part of an
operating system, including supervisors, monitors, executives, and control or
master programs, which consists of the control program elements of that system.
A control or master program, as opposed to a processing program, controls the
operation of a computer by managing the allocation of all system resources,
including the central processing unit, main storage, input/output devices, and
processing programs. A processing program is used to develop and implement the
specific applications the computer is to perform.
b. ‘Computer program' means the complete
plan for the solution of a problem, such as the complete sequence of automatic
data-processing equipment instructions necessary to solve a problem, and
includes both systems and application programs and subdivisions, such as
assemblers, compilers, routines, generators, and utility programs.
c. ‘Custom computer program' means a
computer program prepared to the special order of the customer. Custom computer
programs include one of the following elements:
1. Preparation or selection of the programs
for the customer's use requires an analysis of the customer's requirements by
the vendor; or
2. The program requires adaptation by the
vendor to be used in a particular make and model of computer utilizing a
specified output device.
d. ‘Storage media' means punched cards,
tapes, disks, diskettes, or drums.
(21) ‘Taxpayer' means any person liable for
taxes under this Article.
(22) ‘Use tax' means and includes the tax
imposed by Part 3 in Division II of this Article.
(23) ‘Wholesale merchant' shall mean every
person who engages in the business of buying or manufacturing any tangible
personal property and selling same to registered retailers, wholesalers and
nonresident retail or wholesale merchants for resale. It shall also include
persons making sales of tangible personal property which are defined herein as
wholesale sales. For the purposes of this Article any person, firm,
corporation, estate or trust engaged in the business of manufacturing,
producing, processing or blending any articles of commerce and maintaining a
store or stores, warehouse or warehouses, or any other place or places,
separate and apart from the place of manufacture or production, for the sale or
distribution of its products (other than bakery products) to other manufacturers
or producers, wholesale or retail merchants, for the purpose of resale shall be
deemed a ‘wholesale merchant.'
(24) ‘Wholesale sale' shall mean a sale of
tangible personal property by a wholesale merchant to a manufacturer, or
registered jobber or dealer, or registered wholesale or retail merchant, for
the purpose of resale but does not include a sale to users or consumers not for
resale.
(25) ‘Utility' means an electric power company,
a gas company, or a telephone company that is subject to a privilege tax based
on gross receipts under G.S. 105-116 or 105-120, a business entity that
provides local, toll or private telecommunications service as defined by G.S.
105-120(a) or a municipality that sells electric power, other than a
municipality whose only wholesale supplier of electric power is a federal
agency and who is required by a contract with that federal agency to make
payments in lieu of taxes."
Sec. 3.2. G.S. 105-164.4 reads as rewritten:
"§ 105-164.4.
Imposition of tax; retailer.
There is hereby levied and imposed, in addition to all
other taxes of every kind now imposed by law, a privilege or license tax upon
every person who engages in the business of selling tangible personal property
at retail, renting or furnishing tangible personal property or the renting and
furnishing of rooms, lodgings and accommodations to transients, in this State,
the same to be collected and the amount to be determined by the application of
the following rates against gross sales and rentals, to wit:
(1) At the rate of three percent (3%) of the
sales price of each item or article of tangible property when sold at retail in
this State, the tax to be computed on total net taxable sales as defined herein
but for the purpose of computing the amount due the State each and every
taxable retail sale, or retail sales upon which the tax has been collected, or
the amount of tax actually collected, whichever be greater and whether or not
erroneously collected, shall be included in the computation of tax due the
State. Provided, however, that in the case of the sale of any aircraft, railway
locomotive, railway car or the sale of any motor vehicle or boat, the tax shall
be only at the rate of two percent (2%) of the sales price, but at no time
shall the maximum tax with respect to any one such aircraft, railway
locomotive, railway car or motor vehicle or boat, including all accessories
attached thereto at the time of delivery thereof to the purchaser, be in excess
of three hundred dollars ($300.00).
The separate sale of a new motor vehicle
chassis and a new motor vehicle body to be installed thereon, whether by the
same retailer or by different retailers shall be subject only to the tax herein
prescribed with respect to a single motor vehicle. No tax shall be imposed upon
a body mounted on the chassis of a motor vehicle which temporarily enters the
State for the purpose of having such body mounted thereon by the manufacturer
thereof.
Notwithstanding G.S. 105-164.3(16) and
regardless whether the seller is a retailer of motor vehicles, the sales price
of a motor vehicle is the gross sales price of the motor vehicle less any
allowance given for a motor vehicle taken in trade as part of the consideration
for the purchased motor vehicle.
The tax levied under this section applies
to all retail sales of motor vehicles regardless whether the seller is engaged
in business as a retailer of motor vehicles or whether a tax on the sale of the
vehicle has previously been paid under this Article. A purchaser of a motor
vehicle from a retailer shall pay the tax imposed under this Article to the
retailer, who is liable for collecting and remitting the tax to the Secretary.
A purchaser of a motor vehicle is liable for payment of the tax imposed by this
Article if the seller is not a retailer. The purchaser shall pay the tax to the
Commissioner of Motor Vehicles when applying for a certificate of title for the
vehicle. When property is transferred by an individual to a partnership or
corporation, and no gain or loss arises as provided by Section 351 or Section
721 of the Code, such transfer is not a sale for the purpose of this
subdivision if the transfer is incident to the organization of the partnership
or corporation.
When applying for a certificate of title,
a purchaser of a motor vehicle from a seller who is not a retailer shall
certify in writing the sales price of the purchased motor vehicle. A purchaser
who knowingly makes a false certification of the sales price is guilty of a
misdemeanor.
The Commissioner of Motor Vehicles may
not issue a certificate of title for a motor vehicle sold by a seller who is
not a retailer unless the tax imposed by this section is paid when the
purchaser of the vehicle applies for a certificate of title. The Commissioner
shall remit taxes collected by him under this subsection to the Secretary.
Persons who lease or rent motor vehicles
shall collect and remit the tax imposed by this Article on the separate retail
sale of a motor vehicle in addition to the tax imposed on the proceeds from the
lease or rental of the motor vehicle.
Provided further, the tax shall be only
at
the rate of one percent (1%) of the sales price
on the following items:
a. Horses or mules by whomsoever sold.
b. Semen to be used in the artificial
insemination of animals.
c. Sales of fuel, other than electricity or
piped natural gas, to farmers to be used by them for any farm purposes other
than preparing food, heating dwellings and other household purposes. The
quantity of fuel purchased or used at any one time shall not in any manner be a
determinative factor as to whether any sale or use of fuel is or is not subject
to the one percent (1%) rate of tax imposed herein.
d. Sales of fuel, other than electricity or
piped natural gas, to manufacturing industries and manufacturing plants for use
in connection with the operation of such industries and plants other than sales
of fuels to be used for residential heating purposes. The quantity of fuel
purchased used at any one time shall not in any manner be a determinative
factor as to whether any sale or use of fuel is or is not subject to the one
percent (1%) rate of tax imposed herein.
e. Sales of fuel, other than electricity or
piped natural gas, to commercial laundries or to pressing and dry-cleaning
establishments for use in machinery used in the direct performance of the
laundering or the pressing and cleaning service.
f. Sales to freezer locker plants of
wrapping paper, cartons and supplies consumed directly in the operation of such
plant.
Provided further, the tax shall be only
at
the rate of one percent (1%) of the sales
price, subject to a maximum tax of eighty dollars ($80.00) per article, on the
following items:
g. Sales
of machines and machinery, whether animal or motor drawn or operated, and parts
and accessories for such machines and machinery to farmers for use by them in
the planting, cultivating, harvesting or curing of farm crops, and sales of
machines and machinery and parts and accessories for such machines and
machinery to dairy operators, poultry farmers, egg producers, and livestock
farmers for use by them in the production of dairy products, poultry, eggs or
livestock, except such machines, machinery, equipment, parts, and accessories
that come within the provisions of G.S. 105-164.13(4c).
The term ‘machines and machinery'
as used in this subdivision is defined as follows:
The term shall include all
vehicular implements, designed and sold for any use defined in this
subdivision, which are operated, drawn or propelled by motor or animal power,
but shall not include vehicular implements which are operated wholly by hand,
and shall not include any motor vehicles required to be registered under
Chapter 20 of the General Statutes.
The term shall include all
nonvehicular implements and mechanical devices designed and sold for any use
defined in this subdivision, which have moving parts, or which require the use
of any motor or animal power, fuel, or electricity in their operation but shall
not include nonvehicular implements which have no moving parts and are operated
wholly by hand.
The term shall also include
metal flues sold for use in curing tobacco, whether such flues are attached to
handfired furnaces or used in connection with mechanical burners.
h. Sales
of mill machinery or mill machinery parts and accessories to manufacturing
industries and plants, and sales to contractors and subcontractors purchasing
mill machinery or mill machinery parts and accessories for use by them in the
performance of contracts with manufacturing industries and plants, and sales to
subcontractors purchasing mill machinery or mill machinery parts and
accessories for use by them in the performance of contracts with general
contractors who have contracts with manufacturing industries and plants. As
used in this paragraph, the term ‘manufacturing industries and plants' does not
include delicatessens, cafes, cafeterias, restaurants, and other similar
retailers that are principally engaged in the retail sale of foods prepared by
them for consumption on or off their premises.
i. Sales
of central office equipment and switchboard and private branch exchange
equipment to telephone companies regularly engaged in providing telephone
service to subscribers on a commercial basis, and sales to these companies of
prewritten computer programs used in providing telephone service to their
subscribers.
j. Sales
to commercial laundries or to pressing and dry cleaning establishments of
machinery used in the direct performance of the laundering or the pressing and
cleaning service and of parts and accessories thereto.
k. Sales
to freezer locker plants of machinery used in the direct operation of said
freezer locker plant and of parts and accessories thereto.
l. Sales
of broadcasting equipment and parts and accessories thereto and towers to
commercial radio and television companies which are under the regulation and
supervision of the Federal Communications Commission.
m. Sales
to farmers of bulk tobacco barns and racks and all parts and accessories
thereto and similar apparatus used for the curing and drying of any farm
produce.
n. Repealed
by Session Laws 1983, c. 805, s. 2, effective July 1, 1983.
o. Sales
to farmers of grain, feed or soybean storage facilities and accessories
thereto, whether or not dryers are attached, and all similar apparatus and
accessories thereto for the storage of grain, feed or soybeans.
p. Repealed
by Session Laws 1983, c. 805, s. 2,effective July 1, 1983.
q. Sales
of containers to farmers or producers for use in the planting, producing,
harvesting, curing, marketing, packaging, sale, or transporting or delivery of
their products when such containers do not go with and become part of the sale
of their products at wholesale or retail.
(2) At the rate of three percent (3%) of the
gross proceeds derived from the lease or rental of tangible personal property
as defined herein, where the lease or rental of such property is an established
business, or the same is incidental or germane to said business; except that
whenever a rate of less than three percent (3%) is applicable to a sale of property
which is leased or rented, the lower rate of tax shall be due on such lease or
rental proceeds.
(3) Operators of hotels, motels, tourist
homes, tourist camps, and similar type businesses and persons who rent private
residences and cottages to transients are considered retailers under this
Article. There is levied upon every such retailer a tax of three percent (3%)
of the gross receipts derived from the rental of any room or rooms, lodgings,
or accommodations furnished to transients for a consideration. This tax does
not apply to any private residence or cottage that is rented for less than 15
days in a calendar year or to any room, lodging, or accommodation supplied to
the same person for a period of 90 or more continuous days.
As used in this subdivision, the term
‘persons who rent to transients' means (i) owners of private residences and
cottages who rent to transients and (ii) rental agents, including ‘real estate
brokers' as defined in G.S. 93A-2, who rent private residences and cottages to
transients on behalf of the owners. If a rental agent is liable for the tax
imposed by this subdivision, the owner is not liable.
(4) Every person, firm or corporation engaged
in the business of operating a pressing club, cleaning plant, hat-blocking
establishment, dry-cleaning plant, laundry (including wet or damp wash
laundries and businesses known as launderettes and launderalls), or any
similar-type business, or engaged in the business of renting clean linen or
towels or wearing apparel, or any similar-type business, or engaged in the
business of soliciting cleaning, pressing, hat blocking, laundering or rental
business for any of the aforenamed businesses, shall be considered ‘retailers'
for the purposes of this Article. There is hereby levied upon every such
person, firm or corporation a tax of three percent (3%) of the gross receipts
derived from services rendered in engaging in any of the occupations or
businesses named in this subdivision, and every person, firm or corporation
subject to the provisions of this subdivision shall register and secure a
license in the manner hereinafter provided in this section, and, insofar as
practicable, all other provisions of this Article shall be applicable with
respect to the tax herein provided for. The tax imposed by this subdivision
does not apply to receipts derived from coin or token-operated washing
machines, extractors, and dryers. The taxes levied in this subdivision are
additional privilege or license taxes for the privilege of engaging in the
occupations or businesses named herein. Any person, firm or corporation
engaged in cleaning, pressing, hat blocking, laundering for, or supplying
clean linen or towels or wearing apparel to, another person, firm or
corporation engaged in soliciting shall not be required to pay the three
percent (3%) tax on its gross receipts derived through such solicitor, if the
soliciting person, firm or corporation has registered with the Department,
secured the license hereinafter required and has paid the tax at the rate of three
percent (3%) of the total gross receipts derived from business solicited.
(4a) At the rate of three percent (3%) of the
gross receipts derived by a utility from sales of electricity, piped natural
gas, or local telecommunications service as defined by G.S. 105-120(a). A
person who operates a utility is considered a retailer under this Article.
(4b) A person who sells tangible personal
property at a flea market, other than his own household personal property, is
considered a retailer under this Article. A tax is levied on that person at the
rate of three percent (3%) of the sales price of each article sold by him at
the flea market. A person who leases or rents space at a flea market may not
lease or rent this space unless the retailer requesting to rent or lease the
space furnishes evidence that he has obtained the license required by this
Article. A person who leases or rents space at a flea market shall keep records
of retailers to whom he has leased or rented space at the market. As used in
this subdivision, the term ‘flea market' means a place where space is rented to
a person for the purpose of selling tangible personal property.
(4c) At the rate of six and one-half percent (6
1/2%) of the gross receipts derived from providing toll telecommunications services
or private telecommunications services as defined by G.S. 105-120(a) that both
originate from and terminate in the State which are not subject to the
privilege tax under G.S. 105-120. Any business entity that provides the
service outlined above is considered a retailer under this Article. This
subdivision shall not apply to telephone membership corporations as described
in Chapter 117 of the General Statutes.
(5) The said tax shall be collected from the
retailer as defined herein and paid by him at the time and in the manner as
hereinafter provided. Provided, however, that any person engaging or
continuing in business as a retailer shall pay the tax required on the net
taxable sales of such business at the rates specified when proper books are kept
showing separately the gross proceeds of taxable and nontaxable sales of
tangible personal property in such form as may be accurately and conveniently
checked by the Secretary or his duly authorized agent. If such records are not
kept separately the tax shall be paid as a retailer on the gross sales of
business and the exemptions and exclusions provided by this Article shall not
be allowed. (6) The tax so levied is and shall be in addition to all other
taxes whether levied in the form of excise, license or privilege or other
taxes.
(7) Any person who shall engage or continue
in any business for which a privilege tax is imposed by this Article shall
immediately after July 1, 1979, apply for and obtain from the Secretary upon
payment of the sum of five dollars ($5.00) a license to engage in and conduct
such business upon the condition that such person shall pay the tax accruing to
the State of North Carolina under the provisions of this Article and he shall
thereby be duly licensed and registered to engage in and conduct such business.
Except as hereinafter provided, a license issued under this subsection shall be
a continuing license until revoked for failure to comply with the provisions of
this Article. However, any person who has heretofore applied for and obtained
such license, and such license was in force and effect as of July 1, 1979,
shall not be required to apply for and obtain a new license.
Any person who shall cease to be engaged in any business
for which a privilege tax is imposed by this Article, and who shall remain
continuously out of business for a period of five years shall apply for and
obtain a new license from the Secretary upon the payment of a tax of five
dollars ($5.00), and any license previously issued under this section shall be
null, void and of no effect. The burden of proof after such period shall be
upon the taxpayer to show that he did engage in such activity within the
period, and that no new license is required.
A retailer who sells tangible personal property at a flea
market shall conspicuously display his sales tax license when making sales at
the flea market."
Sec. 3.3. G.S. 105-164.6 reads as rewritten:
"§ 105-164.6.
Imposition of tax.
An excise tax is hereby levied and imposed on the storage,
use or consumption in this State of tangible personal property purchased within
and without this State for storage, use or consumption in this State, the same
to be collected and the amount to be determined by the application of the
following rates:
(1) At the rate of three percent (3%) of the
cost price of each item or article of tangible personal property when the same
is not sold but used, consumed, distributed or stored for use or consumption in
this State; except that, whenever a rate of less than three percent (3%) is
applicable under the sales tax schedule set out in G.S. 105-164.4 to the sale
at retail of an item or article of tangible personal property, the same rate,
and maximum tax if any, shall be used in computing any use tax due under this
subdivision. The separate sale of a new motor vehicle chassis and a new motor
vehicle body to be installed thereon, whether by the same retailer or by
different retailers, shall be subject only to the tax herein prescribed with
respect to a single motor vehicle.
(2) At the rate of three percent (3%) of the
monthly lease or rental price paid by the lessee or rentee, or contracted or
agreed to be paid by the lessee or rentee, to the owner of the tangible
personal property; except that, whenever a rate of less than three percent (3%)
is applicable under the sales tax schedule set out in G.S. 105-164.4 to the
sale at retail of an item or article of tangible personal property, then the
same rate, and maximum tax if any, shall be used in computing any use tax due
under this subdivision.
(3) There is hereby levied and there shall be
collected from every person, firm, or corporation, an excise tax of three
percent (3%) of the purchase price of all tangible personal property purchased
or used which shall enter into or become a part of any building or other kind
of structure in this State, including all materials, supplies, fixtures and
equipment of every kind and description which shall be annexed thereto or in
any manner become a part thereof. Said tax shall be levied against the
purchaser of such property. Provided, that where the purchaser is a
contractor, the contractor and owner shall be jointly and severally liable for
said tax, but the liability of the owner shall be deemed satisfied if before
final settlement between them the contractor furnishes to the owner an
affidavit certifying that said tax has been paid. Provided further, that where
the purchaser is a subcontractor, the contractor and subcontractor shall be
jointly and severally liable for said tax, but the liability of the contractor
shall be deemed satisfied if before final settlement between them the
subcontractor furnishes to the contractor an affidavit certifying that said tax
has been paid.
(3a) Every person, firm, or corporation that
purchases or acquires a motor vehicle shall pay a tax at the rate of two
percent (2%) of the sales price of the vehicle, not to exceed three hundred
dollars ($300.00) per vehicle. This tax shall be paid to the Commissioner of
Motor Vehicles when applying for a certificate of title or registration plate
for the vehicle. A purchaser who furnishes to the Commissioner of Motor
Vehicles a certificate from a retailer of motor vehicles engaged in business in
this State stating that the purchaser has paid the tax levied on the vehicle by
this Article to the retailer is relieved of liability for the tax. No
certificate of title, or registration and license plate or plates shall be
issued for any motor vehicle purchased or acquired for use on the streets and
highways of this State unless and until the tax provided for under this Article
on motor vehicles has been paid. Nothing herein is intended to relieve any
retailer of motor vehicles engaged in business in this State from his liability
for collecting and remitting sales or use tax on his sales of motor vehicles
for use by the purchasers thereof in this State and no retailer shall be
absolved of this liability for his failure to collect the tax from such
purchasers. The Commissioner of Motor Vehicles shall remit use taxes collected
by him under this subdivision to the Secretary.
The tax levied under this section applies to all owners of
motor vehicles, regardless whether the owner purchased or acquired the vehicle
from a retailer of motor vehicles and regardless whether a tax has previously
been paid under this Article with respect to the vehicle.
An owner of a motor vehicle acquired from a seller who is
not a retailer shall certify the sales price of the vehicle as provided in G.S.
105-164.4(1).
Persons who lease or rent motor vehicles shall collect and
remit the tax imposed by this Article on the separate retail sale of a motor
vehicle in addition to the tax imposed on the proceeds from the lease or rental
of the motor vehicle.
(4) Where a retail sales tax has already been
paid with respect to said tangible personal property in this State by the
purchaser thereof, said tax shall be credited upon the tax imposed by this
Part. Where a retail sales and use tax is due and has been paid with respect
to said tangible personal property in another state by the purchaser thereof
for storage, use or consumption in this State, said tax shall be credited upon
the tax imposed by this Part. If the amount of tax paid to another state is
less than the amount of tax imposed by this Part, the purchaser shall pay to the
Secretary an amount sufficient to make the tax paid to the other state and this
State equal to the amount imposed by this Part. The Secretary of Revenue shall
require such proof of payment of tax to another state as he deems to be
necessary and proper. No credit shall be given under this subdivision for sales
or use taxes paid in another state if that state does not grant similar credit
for sales taxes paid in North Carolina.
(5) Every person storing, using or otherwise
consuming in this State tangible personal property purchased or received at
retail either within or without this State shall be liable for the tax imposed
by this Article and the liability shall not be extinguished until the tax has
been paid to this State. Provided, however, that a receipt from a registered
retailer engaged in business in this State given to the purchaser in accordance
with the provisions of this Article shall be prima facie sufficient to
relieve the purchaser from liability for the tax to which such receipt may
refer and the liability of the purchaser shall be extinguished upon payment of
the tax by any retailer from whom he has purchased said property.
(6) Except as provided herein the tax so
levied is and shall be in addition to all other taxes whether levied in the
form of excise, license, privilege or other taxes.
(7) Every retailer engaged in business in
this State selling or delivering tangible personal property for storage, use or
consumption in this State shall immediately after July 1, 1979, apply for and
obtain from the Secretary upon the payment of the sum of five dollars ($5.00) a
license to engage in and conduct such business upon the condition that such
person shall pay the tax accruing to the State of North Carolina under the
provisions of this Article, and he shall thereby be duly licensed and
registered to engage in and conduct such business. Except as hereinafter
provided, a license issued under this subsection shall be a continuing license
until revoked for failure to comply with the provisions of this Article.
However, any person who has heretofore applied for and obtained such license,
and such license was in force and effect as of July 1, 1979, shall not be
required to apply for and obtain a new license.
Any person who shall cease to be engaged in any business
for which a tax is imposed by this Article, and who shall remain continuously
out of business for a period of five years shall apply for and obtain a new
license from the Secretary upon the payment of a tax of five dollars ($5.00),
and any license previously issued under this section shall be null, void and of
no effect. The burden of proof after such period shall be upon the taxpayer to
show that he did engage in such activity within the period, and that no new
license is required.
(8) Notwithstanding any other provisions of
this Article, a use tax, at the applicable use tax rate, as hereinbefore
provided, is hereby levied upon the storage or use in this State of any motor
vehicles, machines, machinery, tools or other equipment brought, imported or caused
to be brought into this State for use in constructing, building or repairing
any building, highway, street, sidewalk, bridge, culvert, sewer or water
system, drainage or dredging system, railway system, reservoir or dam,
hydraulic or power plant, transmission line, tower, dock, wharf, excavation,
grading or other improvement or structure, or any part thereof. The owner or,
if the property is leased the lessee of any such motor vehicle, machine,
machinery, tools or other equipment shall be liable for the tax provided for in
this paragraph, to be computed as set out below. The useful life of such motor
vehicles, machines, tools or other equipment shall be determined by the
Secretary in accordance with the experience and practices of the building and
construction trades. Said use tax shall be computed on the basis of such
proportion of the original purchase price of such property as the duration of
time of use in this State bears to the total useful life thereof. Such tax
shall become due immediately upon such property being brought into this State,
and in the absence of satisfactory evidence as to the period of use intended in
this State, it shall be presumed that such property will remain in this State
for the remainder of its useful life.
All provisions of this Article not directly in conflict
with the provisions of this paragraph shall be applicable with respect to the
matters herein set forth. The provisions of this paragraph shall not be
applicable with respect to sales of such property within this State or to the
use, storage or consumption of such property when purchased for use in this
State, and in such cases the full sales or use tax shall be paid as in all
other cases, irrespective of the period of intended use in this State."
Sec. 3.4. G.S. 105-164.13(16) reads as rewritten:
"(16) Sales of used articles other than
motor vehicles taken in trade, or a series of trades, as a credit or part
payment on the sale of a new article, provided the tax levied in this Article
is paid on the gross sales price of the new article. In the interpretation of
this subsection, new article shall be taken to mean the original stock in trade
of the merchant and shall not be limited to newly manufactured articles. The
resale of articles other than motor vehicles, repossessed by the vendor shall
likewise be exempt from gross sales taxable under this Article."
Sec. 3.5. G.S. 105-164.13(32) reads as rewritten:
"(32) Sales of motor vehicles, as defined in
G.S. 105-164.3(8a),to nonresident purchasers for immediate transportation to
and use in another state in which such vehicles are required to be registered,
provided the seller obtains from the purchaser and furnishes to the Secretary
of Revenue an affidavit stating the name and address of the purchaser, the
state in which the vehicle will be registered and operated, the make, model,
and serial number of the vehicle, and such other information as the Secretary
may require, and provided further that no exemption shall be allowed unless the
affidavit is filed with the seller's sales and use tax report for the month
during which the sale is made and such report is timely filed. For sales made
by a seller who is not a retailer, this exemption applies if the purchaser
furnishes the Secretary an affidavit containing the information otherwise
required from a retailer within 45 days of the date."
Sec. 3.6. G.S. 105-467 reads as rewritten:
"§ 105-467.
Sales tax imposed; limited to items on which the State now imposes a three
percent sales tax.
The sales tax which may be imposed under
this Article is limited to a tax at the rate of one percent (1%) of:
(1) The
sales price of those articles of tangible personal property now subject to the
three percent (3%) sales tax imposed by the State under G.S. 105-164.4(1);
(2) The
gross receipts derived from the lease or rental of tangible personal property
where the lease or rental of such property is an established business now
subject to the three percent (3%) sales tax imposed by the State under G.S.
105-164.4(2);
(3) The
gross receipts derived from the rental of any room or lodging furnished by any
hotel, motel, inn, tourist camp or other similar accommodations now subject to
the three percent (3%) sales tax imposed by the State under G.S. 105-164.4(3);
and
(4) The
gross receipts derived from services rendered by laundries, dry cleaners,
cleaning plants and similar type businesses now subject to the three percent
(3%) sales tax imposed by the State under G.S. 105-164.4(4).
The sales tax authorized by this Article does not apply to
sales by a utility of electricity, piped natural gas, local, toll, or private
telecommunications services as defined by G.S. 105-120(a).
The exemptions and exclusions contained in G.S. 105-164.13
and the refund provisions contained in G.S. 105-164.14 shall apply with equal
force and in like manner to the local sales and use tax authorized to be levied
and imposed under this Article. A taxing county shall have no authority, with
respect to the local sales and use tax imposed under this Article to change,
alter, add to or delete any refund provisions contained in G.S. 105-164.14, or
any exemptions or exclusions contained in G.S. 105-164.13 or which are
elsewhere provided for.
The local sales tax authorized to be imposed and levied
under the provisions of this Article shall be applicable to such retail sales,
leases, rentals, rendering of services, furnishing of rooms, lodgings or
accommodations and other taxable transactions which are made, furnished or
rendered by retailers whose place of business is located within the taxing
county. The tax imposed shall apply to the furnishing of rooms, lodging or
other accommodations within the county which are rented to transients. For the
purpose of this Article, the situs of a transaction is the location of the
retailer's place of business."
Sec. 3.7. G.S. 105-468 reads as rewritten:
"§ 105-468.
Use tax imposed; limited to items upon which the State now imposes a three
percent use tax.
The use tax which may be imposed under this Article shall
be at the rate of one percent (1%) of the cost price of each item or article of
tangible personal property when the same is not sold but used, consumed or
stored for use or consumption in the taxing county, except that no tax shall be
imposed upon such tangible personal property when, if the property were subject
to the use tax imposed by G.S. 105-164.6, such property would be taxed by the
State of North Carolina at a rate less than three percent (3%).
Every retailer engaged in business in this State and in
the taxing county and required to collect the use tax levied by G.S. 105-164.6
shall also collect the one percent (1%) use tax when such property is to be
used, consumed or stored in the taxing county, said one percent (1%) use tax to
be collected concurrently with the State's use tax; but no retailer not
required to collect the use tax levied by G.S. 105-164.6 shall be required to
collect the one percent (1%) use tax. The use tax contemplated by this section
shall be levied against the purchaser, and his liability for such use tax shall
be extinguished only upon his payment of the use tax to the retailer, where the
retailer is required to collect the tax, or to the Secretary of Revenue, or to
the taxing county, as appropriate, where the retailer is not required to
collect the tax.
Where a local sales or use tax has been paid with respect
to said tangible personal property by the purchaser thereof, either in another
taxing county within the State, or 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, said tax 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 of Revenue or to the taxing county, as appropriate, 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 hereunder. The Secretary
of Revenue or the taxing county, as appropriate, may require such proof of
payment in another taxing county or jurisdiction as is deemed to be necessary
and proper. The use tax levied hereunder shall not be 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."
Sec. 3.8. Section 4 of Chapter 1096 of the 1967
Session Laws, as amended, is amended as follows:
(1) By
rewriting the heading to the section to read: "Scope of Sales Tax.";
(2) By
deleting the reference "105-164.4(1)”and substituting the reference
"105-164.4(a)(1) and (4b)";
(3) By
rewriting subpart (2) of the first paragraph to read:
"(2) the
gross receipts derived from the lease or rental of tangible personal property
when the lease or rental of the property is subject to the three percent (3%)
sales tax imposed by the State under G.S. 105-164.4(a)(2)";
(4) By
deleting the references "105-164.4(3)”and "105-164.4(4)”and
substituting the references "105-164.4(a)(3)”and
"105-164.4(a)(4)”respectively; and
(5) By
rewriting the last sentence of the first paragraph of that section to read:
"The taxes authorized by this division do not apply
to sales that are taxable by the State under G.S. 105-164.4 but are not specifically
listed in this section."
Sec. 3.9. Section 5 of Chapter 1096 of the 1967
Session Laws, as amended, is amended in the first sentence by deleting the
phrase "when, if the property were subject to the use tax imposed by G.S.
105-164.6, such property would be taxed by the State of North Carolina at a
rate less than three percent (3%)”and substituting the phrase "when
the property would be taxable by the State at a rate of other than three
percent (3%) if it were taxable under G.S. 105-164.6".
Sec. 3.11. G.S. 136-16.4 is repealed.
PART IV.
MOTOR VEHICLE USE
TAX.
Sec. 4.1. Chapter 105 of the General Statutes is
amended by adding a new Article to read:
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PART V.
MOTOR FUEL TAX
INCREASE.
Sec. 5.28. G.S. 105-434(a) reads as rewritten:
"(a) Tax. – An excise tax is levied on
motor fuel sold, distributed, or used by a distributor within this State at the
rate of fourteen cents (14¢) per gallon plus three percent (3%) of the average
wholesale price of motor fuel, as determined semiannually by the Secretary of
Revenue from information on refiner and gas plant operator sales prices of
finished motor gasoline and No. 2 diesel fuel for resale, published by the
United States Department of Energy in the ‘Monthly Energy Review,' or on
equivalent data. The Secretary shall determine the average wholesale price of
motor fuel by computing the average sales price of finished motor gasoline for
the base period, computing the average sales price for No. 2 diesel fuel for
the base period, and then computing a weighted average of the results of the
first two computations based on the proportion of tax collected under this
Article on motor fuel and Article 36A on fuel for the base period. The
Secretary shall notify affected taxpayers of the tax rate to be in effect for
each six-month period.
To facilitate collection of the motor fuel tax, the
Secretary shall convert the percentage rate to a cents-per-gallon rate to be in
effect during the six-month period beginning each January 1 and July 1. The
rate to be in effect during the six-month period beginning January 1 shall be
computed from data published for the six-month base period ending on the
preceding September 30, and the rate to be in effect during the six-month
period beginning July 1 shall be computed from data published for the six-month
base period ending on the preceding March 31. The cents-per-gallon rate
computed by the Secretary shall be rounded to the nearest one-tenth of a cent
(1/10¢). If the cents-per-gallon rate computed by the Secretary is exactly
between two tenths of a cent, the rate shall be rounded up to the higher of the
two."
Sec. 5.29. G.S. 105-446 reads as rewritten:
"§ 105-446.
Refund for tax on motor fuel used other than to propel a motor vehicle.
A person who purchases and uses motor fuel for a purpose
other than to operate a licensed motor vehicle may receive an annual refund,
for the tax paid during the preceding calendar year, at a rate equal to
fourteen cents (14¢) per gallon plus the average of the two wholesale
cents-per-gallon rates of tax in effect during the year for which refund is
claimed, less one cent (1¢) per gallon. An application for a refund allowed
under this section shall be made in accordance with G.S. 105-440."
Sec. 5.30. G.S. 105-446.1 reads as rewritten:
"§ 105-446.1.
Refunds of taxes paid by counties and municipalities.
The following entities shall be entitled to reimbursement
for the tax levied by G.S. 105-434 upon filing a statement in writing with the
Secretary of Revenue, which statement shall be made upon the oath or
affirmation of the chief executive officer of said entity, showing the number
of gallons of fuel purchased and used by said entity on which the tax levied by
G.S. 105-434 has been paid: the Board of Transportation, counties, municipal
corporations, volunteer fire departments, county fire departments, volunteer
rescue squads, and "sheltered workshop”organizations recognized and
approved by the Department of Human Resources. "Chief executive officer”shall
mean the Director of Highways, the mayor, city manager or other municipal
officer designated by the governing body of the municipality, the chairman of
the board of county commissioners or other county officer designated by the
board of county commissioners, or the president or other duly designated
officer or agent of a volunteer fire department, county fire department,
volunteer rescue squad or "sheltered workshop”organization.
Reimbursement shall be at a rate equal to fourteen cents (14¢) per gallon plus
the wholesale cents-per-gallon rate of tax in effect during the quarter for
which the refund is claimed, less one cent (1¢) per gallon. An application for
a refund under this section shall be made in accordance with G.S. 105-440.
"
Sec. 5.31. G.S. 105-446.3 reads as rewritten:
"§ 105-446.3.
Refund of taxes paid on motor fuels used in operation of motor buses
transporting fare city transit system, in operation of a taxicab transporting
fareatransportation services.
(a) Any person, association, firm or
corporation, who shall purchase any motor fuels, as defined in this Article,
for the purpose of use, and the same is actually used, in the operation of
motor buses transporting fare-paying passengers, in connection with a city
transit system or in the operation of a taxicab transporting fare-paying
passengers, both as hereinafter defined in subsection (b) of this section, or
in the operation, by private nonprofit organizations, of motor vehicles
transporting passengers under contract with or at the express designation of units
of local government (such transportation above and hereinafter referred to as
private nonprofit transportation services) shall be entitled to reimbursement
for the tax levied by this Article upon filing with the Secretary of Revenue an
application upon the oath or affirmation of the applicant or his agent showing
the number of gallons of motor fuel so purchased and used. Reimbursement shall
be at a rate equal to fourteen cents (14¢) per gallon plus the wholesale
cents-per-gallon rate of tax in effect during the quarter for which the refund
is claimed, less one cent (1¢) per gallon. An application for a refund allowed
under this section shall be made in accordance with G.S. 105-440.
(b) For the purposes of this section the term
"city transit system”means a system of mass public transportation
authorized to operate within any municipality or within contiguous
municipalities and within a zone adjacent to and commercially a part of such
municipality or contiguous municipalities as defined by the North Carolina
Utilities Commission under the provisions of G.S. 62-260. Any person,
association, firm or corporation, who, in addition to the operation of a city
transit system as herein defined, holds a certificate from the North Carolina
Utilities Commission for operations outside of the municipal limits and
adjacent commercial zones or who conducts exempt operations outside of the
municipal limits or adjacent commercial zones shall be entitled to the refund
provided by this section only on taxes levied upon motor fuels actually used in
the operation of the city transit system. For the purposes of this section the
term "taxicab”shall mean a taxicab as defined in G.S. 20-87(1);
provided, however, that a city transit system as defined herein shall not
include limousine operations.
"
Sec. 5.32. G.S. 105-446.5 reads as rewritten:
"§
105-446.5. Refund of taxes paid on motor fuel used by concrete mixing
vehicles, solid waste compacting vehicles, and certain agricultural vehicles.
(a) Refund.
A person who purchases and uses motor fuel in one of the
vehicles listed below may receive a refund for the amount of fuel consumed by
the vehicle:
(1) A
concrete mixing vehicle;
(2) A
solid waste compacting vehicle;
(3) A
bulk feed vehicle that delivers feed to poultry or livestock and uses a power
take-off to unload the feed; and
(4) A
vehicle that delivers lime or fertilizer in bulk to farms and uses a power
take-off to unload the lime or fertilizer.
The refund rate shall be computed by subtracting one cent
(1¢) from fourteen cents (14¢) per gallon plus the average of the two
wholesale cents-per-gallon rates of tax in effect during the year for which
the refund is claimed, and multiplying the difference by thirty-three and
one-third percent (33 1/3%). An application for a refund allowed under this
section shall be made in accordance with G.S. 105-440. This refund is allowed
for the amount of fuel consumed by the vehicle in its mixing, compacting, or
unloading operations, as distinguished from propelling the vehicle, which
amount is considered to be onethird of the amount of fuel consumed by the
vehicle."
Sec. 5.33. G.S. 105-446.6 reads as rewritten:
"§
105-446.6. Refund on taxpaid motor fuel transported to another state.
Upon application to the Secretary, any person, association
or corporation who purchases motor fuel upon which the tax imposed by this
Article has been paid, and who transports the fuel to another state for sale or
use in that statemay be reimbursed at a rate equal to fourteen cents (14¢) per
gallon plus the wholesale cents-per-gallon rate of tax paid on the fuel, less
one cent (1¢) per gallon. The refund application shall require the claimant to
furnish evidence satisfactory to the Secretary that the motor fuel for which
the refund is claimed has been reported for taxation in the state to which it
was transported. As used in this section, to ‘transport' means to carry motor
fuel in a cargo tank, tank car, barge or barrel and does not include carrying
fuel in a tank connected with or attached to the engine of a motor vehicle."
Sec. 5.34. G.S. 105-449.39 reads as rewritten:
"§
105-449.39. Credit for payment of motor fuel tax.
Every motor carrier subject to the tax levied by this
Article is entitled to a credit for tax paid on fuel purchased in the State.
The credit shall be allowed at a rate equal to fourteen cents (14¢) per gallon
plus the wholesale cents-per-gallon rate of tax in effect during the quarter
for which the credit is claimed. Evidence of the payment of such tax in such
form as may be required by, or is satisfactory to, the Secretary shall be
furnished by each such carrier claiming the credit herein allowed. When the
amount of the credit herein provided to which any motor carrier is entitled for
any quarter exceeds the amount of the tax for which such carrier is liable for
the same quarter, such excess may under regulations of the Secretary be allowed
as a credit on the tax for which such carrier would be otherwise liable for
another quarter or quarters; or upon application duly verified and presented in
accordance with regulations promulgated by the Secretary and supported by such
evidence as may be satisfactory to the Secretary, such excess may be refunded
to said motor carrier.
Unless the Secretary of Revenue exercises his discretion
as hereinafter provided, or as provided in G.S. 105-449.40, he shall allow such
refund only after an audit of the applicant's records. However, he may, in his
sole discretion, make refunds without prior audit or without having been
furnished a bond pursuant to G.S. 105-449.40 if the motor carrier has complied
with the provisions of this Subchapter and rules and regulations promulgated
thereunder for a period of one full prior registration year.
"
Sec. 5.35. August 1, 1989, Inventory of Motor Fuel.
Every distributor of motor fuel, both at wholesale and at retail, must
inventory all motor fuel on hand or in his possession as of 12:01 a.m., August
1, 1989, and, on or before September 1, 1989, must report to the Secretary of
Revenue the amount of the motor fuel. When filing the report, the distributor
must remit to the Secretary of Revenue an additional tax on the motor fuel of
three cents (3¢) per gallon plus an amount equal to the increase in the tax
based on the increase in the variable cents-per-gallon tax effective August 1,
1989. The report required must be in a form prescribed by the Secretary.
Sec. 5.36. August 1, 1989, Inventory of Special
Fuel. Every supplier or reseller of special fuel must inventory all special
fuel on hand or in his possession as of 12:01 a.m., August 1, 1989, and, on or
before September 1, 1989, must report to the Secretary of Revenue the amount of
the special fuel. When filing the report, the supplier or reseller must remit
to the Secretary of Revenue an additional tax on the special fuel of three
cents (3¢) per gallon plus an amount equal to the increase in the tax based on
the increase in the variable cents-per-gallon tax effective August 1, 1989.
The report required must be in a form prescribed by the Secretary.
Sec. 5.37. Motor Carrier Refund and Report.
Notwithstanding G.S. 105-449.39 to the contrary, a motor carrier that as of
12:01 a.m. on August 1, 1989, has on hand or in its possession motor fuel or
special fuel upon which it has paid the tax in effect on July 31, 1989, is
allowed a credit of only the amount of tax paid on the fuel when filing the
report required by G.S. 105-449.45. Notwithstanding G.S. 105-449.45, a motor
carrier must file a report in accordance with that section for the period July
1, 1989, through July 31, 1989, and for the period August 1, 1989, through
September 30, 1989.
Sec. 5.38. Annual Refund Rate. Notwithstanding G.S.
105-446, 105-446.5, and 105-449.24 to the contrary, the annual refund rate for
tax paid on motor fuel or special fuel for calendar year 1989 is at a rate
equal to the weighted average of the two flat cents-per-gallon rates plus the
weighted average of the two variable cents-per-gallon rates in effect during
that year, less one cent (1¢) per gallon.
Sec. 5.39. Quarterly Refund Rate. Notwithstanding
G.S. 105-446.1, 105-446.3, and 105-449.24 to the contrary, the entities
eligible under those statutes for a refund of tax paid on motor fuel or special
fuel are entitled to a refund at the rate of fourteen and seven-tenths cents
(14.7¢) per gallon for tax paid or accrued on fuel purchased before August 1,
1989, but used on or after August 1, 1989.
PART VI.
ESTIMATED INCOME
TAX AMENDMENTS.
Sec. 6.1. G.S. 105-163.15 reads as rewritten:
"§
105-163.15. Failure by individual to pay estimated income tax; penalty.
(a) In the case of any underpayment of the
estimated tax by an individual, there shall be added to the tax imposed under
Article 4 for the taxable year an amount determined by applying the applicable
annual rate established under G.S. 105-241.1(i) to the amount of the
underpayment for the period of the underpayment.
(b) For purposes of subsection (a), the
amount of the underpayment shall be the excess of the required installment,
over the amount, if any, of the installment paid on or before the due date for
the installment. The period of the underpayment shall run from the due date
for the installment to whichever of the following dates is the earlier: (i) the
fifteenth day of the fourth month following the close of the taxable year, or
(ii) with respect to any portion of the underpayment, the date on which such
portion is paid. A payment of estimated tax shall be credited against unpaid
required installments in the order in which such installments are required to
be paid.
(c) For purposes of this section there shall
be four required installments for each taxable year with the time for payment
of the installments as follows:
(1) First
installment – April 15 of taxable year;
(2) Second
installment – June 15 of taxable year;
(3) Third
installment – September 15 of taxable year; and
(4) Fourth
installment – January 15 of following taxable year.
(d) Except as provided in subsection (e) the
amount of any required installment shall be twenty-five percent (25%) of the
required annual payment. The term ‘required annual payment' means the lesser
of:
(1) Eighty
percent (80%) of the tax shown on the return for the taxable year, or, if no
return is filed, eighty percent (80%) of the tax for that year; or
(2) One
hundred percent (100%) of the tax shown on the return of the individual for the
preceding taxable year, if the preceding taxable year was a taxable year of 12
months and the individual filed a return for that year.
(e) In the case of any required installment,
if the individual establishes that the annualized income installment is less
than the amount determined under subsection (d), the amount of the required
installment shall be the annualized income installment, and any reduction in a
required installment resulting from the application of this subsection shall be
recaptured by increasing the amount of the next required installment determined
under subsection (d) by the amount of the reduction and by increasing
subsequent required installments to the extent that the reduction has not
previously been recaptured.
In the case of any required installment, the annualized
income installment is the excess, if any, of (i) an amount equal to
the applicable percentage of the tax for the taxable year computed by placing
on an annualized basis the taxable income for months in the taxable year ending
before the due date for the installment, over (ii) the aggregate amount of any
prior required installments for the taxable year. The taxable income shall be
placed on an annualized basis under rules prescribed by the Secretary. The
applicable percentages for the required installments are as follows:
(1) First
installment – twenty percent (20%);
(2) Second
installment – forty percent (40%);
(3) Third
installment – sixty percent (60%); and
(4) Fourth
installment – eighty percent (80%).
(f) No addition to the tax shall be imposed
under subsection (a) if the tax shown on the return for the taxable year
reduced by the tax withheld under Article 4A is less than forty dollars
($40.00) or if the individual did not have any liability for tax under Division
II of Article 4 for the preceding taxable year.
(g) For purposes of this section, the term
‘tax' means the tax imposed by Division II of Article 4 minus the credits
against the tax allowed by Article 4. The amount of the credit allowed under
Article 4A for withheld income tax for the taxable year is considered a payment
of estimated tax, and an equal part of that amount is considered to have been
paid on each due date of the taxable year, unless the taxpayer establishes the
dates on which all amounts were actually withheld, in which case the amounts so
withheld are considered payments of estimated tax on the dates on which such
amounts were actually withheld.
(h) If, on or before January 31 of the
following taxable year, the taxpayer files a return for the taxable year and
pays in full the amount computed on the return as payable, no addition to tax
shall be imposed under subsection (a) with respect to any underpayment of the
fourth required installment for the taxable year.
(i) Notwithstanding the other provisions of
this section, an individual who is a farmer or fisherman for a taxable year is
required to make only one installment payment of tax for that year. This
installment is due on or before January 15 of the following taxable year but
may be paid without penalty or interest on or before March 1 of that year. The
amount of the installment payment shall be the lesser of:
(1) Sixty-six
and two-thirds percent (66 2/3%) of the tax shown on the return for the taxable
year, or, if no return is filed, sixty-six and two-thirds percent (66 2/3%) of
the tax for that year; or
(2) One
hundred percent (100%) of the tax shown on the return of the individual for the
preceding taxable year, if the preceding taxable year was a taxable year of 12
months and the individual filed a return for that year.
An individual is a farmer or fisherman for any taxable
year if the individual's gross income from farming or fishing, including oyster
farming, for the taxable year is at least sixty-six and two-thirds percent (66
2/3%) of the total gross income from all sources for the taxable year, or the
individual's gross income from farming or fishing, including oyster farming,
shown on the return of the individual for the preceding taxable year is at
least sixty-six and two-thirds percent (66 2/3%) of the total gross income from
all sources shown on the return.
(j) In applying this section to a taxable
year beginning on any date other than January 1, there shall be substituted,
for the months specified in this section, the months that correspond thereto.
This section shall be applied to taxable years of less than 12 months in
accordance with rules prescribed by the Secretary.
(k) This section shall not apply to any
estate or trust."
PART VII.
EFFECTIVE DATES.
Sec. 7.1. The prohibition imposed by G.S. 136-44.7(b)
on changing the order of unpaved roads set out in a published list of the top
ten roads to be paved in a county applies to lists adopted for fiscal years
beginning with the 1988-89 fiscal year.
Sec. 7.2. This act does not affect the rights or
liabilities of the State, a taxpayer, or another person arising under a statute
amended or repealed by this act before its amendment or repeal; nor does it
affect the right to any refund or credit of a tax that would otherwise have
been available under the amended or repealed statute before its amendment or
repeal.
Sec. 7.3. Part VI of this act is effective for
taxable years beginning on and after January 1, 1990. Except as otherwise
provided in this act, the remainder of this act shall become effective August
1, 1989. Part IV of this act shall not apply to a sale of a motor vehicle made
on or after that date pursuant to a written contract of sale entered into
before that date.
Sec. 7.4. On the date that contracts for all the
projects in Article 14 of Chapter 136 have been let, G.S. 20-85(b) is repealed,
G.S. 105-171 is repealed, and Part I and Part V of this act shall expire.