GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2007

S                                                                                                                                                     1

SENATE BILL 1629

 

 

 

 

Short Title:     Limited Sales Tax Exemption for Baked Goods.

(Public)

Sponsors:

Senators Hoyle;  Bingham, Brown, Cowell, Garrou, Hagan, Kerr, Malone, McKissick, Nesbitt, Rand, Snow, and Stevens.

Referred to:

Finance.

May 19, 2008

A BILL TO BE ENTITLED

AN ACT to provide a limited exemption for baked goods from state sales and use taxes.

The General Assembly of North Carolina enacts:

SECTION 1.  G.S. 105‑164.3 reads as rewritten:

"§ 105‑164.3.  Definitions.

The following definitions apply in this Article:

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

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

(1b)     Baked goods. – Bakery items, including bread, rolls, buns, biscuits, bagels, croissants, pastries, donuts, danish, cakes, tortes, pies, tarts, muffins, bars, cookies, and tortillas.

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

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

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

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

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

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

(1d)     Business. – Includes 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.

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

(2)       Candy. – A preparation of sugar, honey, or other natural or artificial sweeteners in combination with chocolate, fruits, nuts, or other ingredients or flavorings in the form of bars, drops, or pieces that do not require refrigeration. The term does not include any preparation that contains flour.

…."

SECTION 2.  G.S. 105‑164.13B reads as rewritten:

"§ 105‑164.13B.  Food exempt from tax.

(a)       State Exemption. – Food is exempt from the taxes imposed by this Article unless the food is included in one of the subdivisions in this subsection. The following food items are subject to tax:

(1)       Repealed by Session Laws 2005‑276, s. 33.10, effective October 1, 2005.

(2)       Dietary supplements.

(3)       Food sold through a vending machine.

(4)       Prepared food. food, other than baked goods sold without eating utensils provided by the seller.

(5)       Soft drinks.

(6)       Repealed by Session Laws 2003‑284, s. 45.6B, effective January 1, 2004.

(7)       Candy.

(b)       Administration of Local Food Tax. – The Secretary must administer local sales and use taxes imposed on food as if they were imposed under this Article. This applies to local taxes on food imposed under Subchapter VIII of this Chapter and under Chapter 1096 of the 1967 Session Laws."

SECTION 3.  This act becomes effective on April 1, 2003, and applies to sales made on or after that date. This act is repealed effective March 1, 2006.