GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2013
H 1
HOUSE BILL 14*
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Short Title: Rev Laws Technical, Clarifying, & Admin. Chg. |
(Public) |
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Sponsors: |
Representative Howard (Primary Sponsor). For a complete list of Sponsors, refer to the North Carolina General Assembly Web Site. |
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Referred to: |
Finance. |
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January 31, 2013
A BILL TO BE ENTITLED
AN ACT to make technical, clarifying, and administrative changes to the revenue laws and related statutes, as recommended by the revenue laws study committee.
The General Assembly of North Carolina enacts:
SECTION 1.(a) G.S. 105‑116(b) reads as rewritten:
"(b) Report Return and Payment. – The
tax imposed by this section is payable quarterly or monthly as specified in
this subsection. A return is due quarterly.
A water company or public sewerage company must pay tax quarterly when filing a return. An electric power company must pay tax in accordance with the schedule and requirements that apply to payments of sales and use tax under G.S. 105‑164.16 and must file a return quarterly.
A quarterly return covers a calendar quarter and is due by the last day of the month that follows the quarter covered by the return. A taxpayer must submit a return on a form provided by the Secretary. The return must include the taxpayer's gross receipts from all property it owned or operated during the reporting period in connection with its business taxed under this section. A taxpayer must report its gross receipts on an accrual basis. A return must contain the following information:
(1) The taxpayer's gross receipts for the reporting period from business inside and outside this State, stated separately.
(2) The taxpayer's gross receipts from commodities or services described in subsection (a) that are sold to a vendee subject to the tax levied by this section or to a joint agency established under Chapter 159B of the General Statutes or a city having an ownership share in a project established under that Chapter.
(3) The amount of and price paid by the taxpayer for commodities or services described in subsection (a) that are purchased from others engaged in business in this State and the name of each vendor.
(4) For an electric power company the entity's gross receipts from the sale within each city of the commodities and services described in subsection (a)."
SECTION 1.(b) G.S. 105‑120.2 reads as rewritten:
"§ 105‑120.2. Franchise or privilege tax on holding companies.
(a) Every corporation, domestic and foreign,
incorporated or, by an act, domesticated under the laws of this State or doing
business in this State which, that, at the close of its taxable year
year, is a holding company as defined in subsection (c) of this
section, shall, pursuant to the provisions of G.S. 105‑122:105‑122,
do all of the following:
(1) Make a report and statement, andFile a
return.
(2) Determine the total amount of its issued and
outstanding capital stock, surplus and undivided profits, andprofits.
(3) Apportion such outstanding capital stock, surplus and undivided profits to this State.
(b) (1) Every
corporation taxed under this section shall annually pay to the Secretary of Revenue,
at the time the report and statement are return is due, a
franchise or privilege tax, which is hereby levied, tax at the
rate of one dollar and fifty cents ($1.50) per one thousand dollars ($1,000) of
the amount determined under subsection (a) of this section, but in no case
shall the tax be more than seventy‑five thousand dollars ($75,000) nor
less than thirty‑five dollars ($35.00).
(2) Notwithstanding the provisions of subdivision (1)
of this subsection, if the tax produced pursuant to application of this
paragraph (2) exceeds the tax produced pursuant to application of subdivision
(1), then the tax shall be is levied at the rate of one dollar
and fifty cents ($1.50) per one thousand dollars ($1,000) on the greater of the
amounts offollowing:
a. Fifty‑five percent (55%) of the appraised
value as determined for ad valorem taxation of all the real and tangible
personal property in this State of each such corporation plus the total
appraised value of intangible property returned for taxation of intangible
personal property as computed under G.S. 105‑122(d); or105‑122(d).
b. The total actual investment in tangible property in this State of such corporation as computed under G.S. 105‑122(d).
…."
SECTION 1.(c) G.S. 105‑122 reads as rewritten:
"§ 105‑122. Franchise or privilege tax on domestic and foreign corporations.
…
(d) After determining the proportion of its total
capital stock, surplus and undivided profits as set out in subsection (c) of
this section, which amount shall not be less than fifty‑five percent
(55%) of the appraised value as determined for ad valorem taxation of all the
real and tangible personal property in this State of each corporation nor less
than its total actual investment in tangible property in this State, every
corporation taxed under this section shall annually pay to the Secretary of
Revenue, at the time the report and statement are return is due,
a franchise or privilege tax at the rate of one dollar and fifty cents ($1.50)
per one thousand dollars ($1,000) of the total amount of capital stock, surplus
and undivided profits as provided in this section. The tax imposed in this
section shall not be less than thirty‑five dollars ($35.00) and shall
be is for the privilege of carrying on, doing business, and/or the
continuance of articles of incorporation or domestication of each corporation
in this State. Appraised value of tangible property including real estate is
the ad valorem valuation for the calendar year next preceding the due date of
the franchise tax return. The term "total actual investment in tangible
property" as used in this section means the total original purchase price
or consideration to the reporting taxpayer of its tangible properties,
including real estate, in this State plus additions and improvements thereto less
reserve for depreciation as permitted for income tax purposes, and also less
any indebtedness incurred and existing by virtue of the purchase of any real
estate and any permanent improvements made thereon. In computing "total
actual investment in tangible personal property" there shall also be
deducted a corporation may deduct reserves for the entire cost of
any air‑cleaning device or sewage or waste treatment plant, including
waste lagoons, and pollution abatement equipment purchased or constructed and installed
which reduces the amount of air or water pollution resulting from the emission
of air contaminants or the discharge of sewage and industrial wastes or other
polluting materials or substances into the outdoor atmosphere or into streams,
lakes, or rivers, upon condition that the corporation claiming this deduction
shall furnish to the Secretary a certificate from the Department of Environment
and Natural Resources or from a local air pollution control program for air‑cleaning
devices located in an area where the Environmental Management Commission has
certified a local air pollution control program pursuant to G.S. 143‑215.112
certifying that said Department or local air pollution control program has
found as a fact that the air‑cleaning device, waste treatment plant or
pollution abatement equipment purchased or constructed and installed as above
described has actually been constructed and installed and that the device,
plant or equipment complies with the requirements of the Environmental
Management Commission or local air pollution control program with respect to
the devices, plants or equipment, that the device, plant or equipment is being
effectively operated in accordance with the terms and conditions set forth in
the permit, certificate of approval, or other document of approval issued by
the Environmental Management Commission or local air pollution control program
and that the primary purpose is to reduce air or water pollution resulting from
the emission of air contaminants or the discharge of sewage and waste and not
merely incidental to other purposes and functions. The cost of constructing
facilities of any private or public utility built for the purpose of providing
sewer service to residential and outlying areas is treated as deductible for
the purposes of this section; the deductible liability allowed by this section shall
apply applies only with respect to pollution abatement plants or
equipment constructed or installed on or after January 1, 1955.
…
(f) The report, statement return and tax
required by this section shall be is in addition to all other
reports required or taxes levied and assessed in this State.
…."
SECTION 1.(d) G.S. 105‑127(a) reads as rewritten:
"(a) Every corporation, domestic or foreign, that
is required to file a return with the Secretary from which a report is
required by law to be made to the Secretary of Revenue, shall, unless
otherwise provided, pay annually to said Secretary annually the
franchise tax as required by G.S. 105‑122."
SECTION 1.(e) G.S. 105‑134.2(b) reads as rewritten:
"(b) In lieu of the tax imposed by subsection (a)
of this section, there is imposed for each taxable year upon the North Carolina
taxable income of every individual a tax determined under tables, applicable to
the taxable year, which may be prescribed by the Secretary. The amounts of the
tax determined under the tables shall be computed on the basis of the rates
prescribed by subsection (a) of this section. This subsection does not apply to
an individual making filing a return under section 443(a)(1) of
the Code for a period of less than 12 months on account of a change in the
individual's annual accounting period, or to an estate or trust. The tax
imposed by this subsection shall be treated as the tax imposed by subsection
(a) of this section."
SECTION 1.(f) G.S. 105‑164.19 reads as rewritten:
"§ 105‑164.19. Extension of time for making returns and payment.
The Secretary for good cause may extend the time for making
filing any return under the provisions of this Article and may grant
such additional time within which to make such file the return
as he may deem proper proper, but the time for filing any such
return shall not be extended for more than 30 days after the regular due
date of such the return. If the time for filing a return be is
extended, interest accrues at the rate established pursuant to G.S. 105‑241.21
from the time the return was due to be filed to the date of payment.payment
shall be added and paid."
SECTION 1.(g) G.S. 105‑164.30 reads as rewritten:
"§ 105‑164.30. Secretary or agent may examine books, etc.
For the purpose of enforcing the collection of the tax levied
by this Article, the Secretary or his duly authorized agent is hereby
specifically authorized and empowered to examine at all reasonable
hours during the day the books, papers, records, documents or other data of all
retailers or wholesale merchants bearing upon the correctness of any return or
for the purpose of making filing a return where none has been
made as required by this Article, and may require the attendance of any person
and take his testimony with respect to any such matter, with power to
administer oaths to such person or persons. If any person summoned as a witness
shall fail fails to obey any summons to appear before the
Secretary or his authorized agent, or shall refuse refuses to
testify or answer any material question or to produce any book, record, paper,
or other data when required to do so, such the Secretary or his
authorized agent shall report the failure or refusal shall be reported to
the Attorney General or the district solicitor, who shall thereupon institute
proceedings in the superior court of the county where such the witness
resides to compel obedience to any summons of the Secretary or his authorized
agent. Officers who serve summonses or subpoenas, and witnesses attending,
shall receive like compensation as officers and witnesses in the superior
courts, to be paid from the proper appropriation for the administration of this
Article.
In the event any retailer or wholesale merchant shall fail
or refuse fails or refuses to permit examination of the
Secretary or his authorized agent to examine his books, papers, accounts,
records, documents or other data by the Secretary or his authorized agents
as aforesaid, data, the Secretary shall have the power to proceed
by citing said may require the retailer or wholesale merchant to
show cause before the superior court of the county in which said taxpayer
resides or has its principal place of business as to why such the books,
records, papers, or documents should not be examined and said the superior
court shall have jurisdiction to enter an order requiring the production of all
necessary books, records, papers, or documents and to punish for contempt any
person who violates the order. of such order any person violating the
same."
SECTION 1.(h) G.S. 105‑236(a)(9) reads as rewritten:
"(9) Willful Failure to File Return, Supply
Information, or Pay Tax. – Any person required to pay any tax, to make a
return, to keep any records, or to supply any information, who willfully fails
to pay the tax, make file the return, keep the records, or supply
the information, at the time or times required by law, or rules issued pursuant
thereto, shall, is, in addition to other penalties provided by
law, be guilty of a Class 1 misdemeanor. Notwithstanding any other
provision of law, no prosecution for a violation brought under this subdivision
shall be is barred before the expiration of six years after the
date of the violation."
SECTION 1.(i) G.S. 105‑258(a) reads as rewritten:
"(a) Secretary May Examine Data and Summon
Persons. – The Secretary of Revenue,Revenue is authorized to do any
of the following for the purpose of ascertaining the correctness of any
return, making filing a return where none has been made, or
determining the liability of any person for a tax, or collecting any tax:such
tax, shall have the power
(1) to examine, Examine, personally,
or by an agent designated by him, any books, papers, records, or other data which
that may be relevant or material to such inquiry, and the
Secretary may the inquiry.
(2) summon Summon any of the following
persons to appear at a time and place named in the summons, to produce such
books, papers, records or other data, and to give such testimony under oath as
may be relevant or material to the inquiry:
a. the Any person liable for the
tax or required to perform the act, or any officer or employee of such person,
or any person.
b. Any person having possession,
custody, care or control of books of account containing entries relevant or
material to the income and expenditures of the person liable for the tax or
required to perform the act, or any other person having knowledge in the premises.premises,
to appear before the Secretary, or his agent, at a time and place named in the
summons, and to produce such books, papers, records or other data, and to give
such testimony under oath as may be relevant or material to such inquiry, and
the Secretary or his agent may
(3) administer Administer oaths to
such person or persons. the persons listed in this subsection.
(4) If any person so summoned refuses to obey
such summons or to give testimony when summoned, the Secretary may apply Apply
to the Superior Court of Wake County for an order requiring such person
or persons to comply with the summons of the Secretary, and the failureany
person who refuses to obey the summons or to give testimony when summoned. Failure
to comply with such the court order shall be punished as for
contempt."
SECTION 2.(a) G.S. 105‑122(c1) reads as rewritten:
"(c1) Apportionment. – A corporation that is doing business in this State and in one or more other states must apportion its capital stock, surplus, and undivided profits to this State. A corporation must use the apportionment method set out in subdivision (1) of this subsection unless the Department has authorized it to use a different method under subdivision (2) of this subsection. The portion of a corporation's capital stock, surplus, and undivided profits determined by applying the appropriate apportionment method is considered the amount of capital stock, surplus, and undivided profits the corporation uses in its business in this State.
…
(2) Alternative. – A corporation that believes the statutory apportionment method set out in subdivision (1) of this subsection subjects a greater portion of its capital stock, surplus, and undivided profits to tax under this section than is attributable to its business in this State may make a written request to the Secretary for permission to use an alternative method. The request must set out the reasons for the corporation's belief and propose an alternative method. The corporation has the burden of establishing by clear, cogent, and convincing proof that the statutory apportionment method subjects a greater portion of the corporation's capital stock, surplus, and undivided profits to tax under this section than is attributable to its business in this State and that the proposed alternative method is a better method of determining the amount of the corporation's capital stock, surplus, and undivided profits attributable to the corporation's business in this State.
The Secretary must issue a written decision
on a corporation's request for an alternative apportionment method. If the
decision grants the request, it must describe the alternative method the
corporation is authorized to use and state the tax years to which the
alternative method applies. A decision may apply to no more than three tax years,
unless the provisions of subdivision (3) of this subsection applies. years.
A corporation may renew a request to use an alternative apportionment
method by following the procedure in this subdivision. A decision of the
Secretary on a request for an alternative apportionment method is final and is
not subject to administrative or judicial review. A corporation authorized to
use an alternative method may apportion its capital stock, surplus, and
undivided profits in accordance with the alternative method or the statutory
method."
SECTION 2.(b) G.S. 105‑130.4(t1) reads as rewritten:
"(t1) Alternative Apportionment Method. – A corporation that believes the statutory apportionment method that otherwise applies to it under this section subjects a greater portion of its income to tax than is attributable to its business in this State may make a written request to the Secretary for permission to use an alternative method. The request must set out the reasons for the corporation's belief and propose an alternative method.
The statutory apportionment method that otherwise applies to a corporation under this section is presumed to be the best method of determining the portion of the corporation's income that is attributable to its business in this State. A corporation has the burden of establishing by clear, cogent, and convincing proof that the proposed alternative method is a better method of determining the amount of the corporation's income attributable to the corporation's business in this State.
The Secretary must issue a written decision on a corporation's
request for an alternative apportionment method. If the decision grants the
request, it must describe the alternative method the corporation is authorized
to use and state the tax years to which the alternative method applies. A
decision may apply to no more than three tax years, unless the provisions of
subsection (t2) of this section apply. years. A corporation may
renew a request to use an alternative apportionment method by following the
procedure in this subsection. A decision of the Secretary on a request for an
alternative apportionment method is final and is not subject to administrative
or judicial review. A corporation authorized to use an alternative method may
apportion its income in accordance with the alternative method or the statutory
method. A corporation may not use an alternative apportionment method except
upon written order of the Secretary, and any return in which any alternative
apportionment method, other than the method prescribed by statute, is used
without permission of the Secretary is not a lawful return."
SECTION 3. G.S. 105‑163.41(c) reads as rewritten:
"(c) The period of the underpayment shall runruns
from the date the installment was required to be paid to the earlier of:
(1) The 15th day of the 3rd 4th month
following the close of the taxable year, or
(2) With respect to any portion of the underpayment,
the date on which the portion is paid. An installment payment of estimated tax shall
be is considered a payment of any previous underpayment only to the
extent the payment exceeds the amount of the installment determined under
subdivision (1) of subsection (b) for that installment date."
SECTION 4. G.S. 105‑129.84(c) reads as rewritten:
"(c) Carryforward. – Unless a longer carryforward
period applies, any unused portion of a credit allowed under G.S. 105‑129.87
or G.S. 105‑129.88 may be carried forward for the succeeding five
years, and any unused portion of a credit allowed under G.S. 105‑129.89
may be carried forward for the succeeding 15 years. If the Secretary of
Commerce makes a written determination that the taxpayer is expected to
purchase or lease, and place in service in connection with an eligible business
within a two‑year period, at least one hundred fifty million dollars
($150,000,000) worth of business and real property, any unused portion of a
credit under this Article with respect to the establishment that satisfies that
condition may be carried forward for the succeeding 20 years. If the taxpayer
does not make the required level of investment, the taxpayer shall apply the five‑year
standard carryforward period rather than the 20‑year
carryforward period."
SECTION 5.(a) G.S. 105‑134.6 reads as rewritten:
"§ 105‑134.6. Modifications to adjusted gross income.
…
(b) Other Deductions. – In calculating North Carolina taxable income, a taxpayer may deduct any of the following items to the extent those items are included in the taxpayer's adjusted gross income.
…
(17b) An amount equal to twenty percent (20%) of the amount
added to federal taxable income as accelerated depreciation under subdivision
(c)(8b) of this section. For the amount added to taxable income in the 2010
taxable year, the deduction allowed by this subdivision applies to the first
five taxable years beginning on or after January 1, 2011. For the amount added
to taxable income in the 2011 taxable year, the deduction allowed by this
subdivision applies to the first five taxable years beginning on or after
January 1, 2012. For the amount added to taxable adjusted gross income
in the 2012 taxable year, the deduction allowed by this subdivision applies to
the first five taxable years beginning on or after January 1, 2013.
…
(d) Other Adjustments. – In calculating North Carolina taxable income, a taxpayer must make the following adjustments to adjusted gross income.
(1) The amount of inheritance or estate tax
attributable to an item of income in respect of a decedent required to be
included in gross income under the Code, adjusted as provided in G.S. 105‑134.5,
105‑134.5 and 105‑134.6, and 105‑134.7, may
be deducted in the year the item of income is included. The amount of
inheritance or estate tax attributable to an item of income in respect of a
decedent is (i) the amount by which the inheritance or estate tax paid under
Article 1 or 1A of this Chapter on property transferred to a beneficiary by a
decedent exceeds the amount of the tax that would have been payable by the
beneficiary if the item of income in respect of a decedent had not been
included in the property transferred to the beneficiary by the decedent, (ii)
multiplied by a fraction, the numerator of which is the amount required to be
included in gross income for the taxable year under the Code, adjusted as
provided in G.S. 105‑134.5, 105‑134.5 and 105‑134.6,
and 105‑134.7, and the denominator of which is the total amount of
income in respect of a decedent transferred to the beneficiary by the decedent.
For an estate or trust, the deduction allowed by this subdivision shall be
computed by excluding from the gross income of the estate or trust the portion,
if any, of the items of income in respect of a decedent that are properly paid,
credited, or to be distributed to the beneficiaries during the taxable year.
The Secretary may provide to a beneficiary of an item of income in respect of a decedent any information contained on an inheritance or estate tax return that the beneficiary needs to compute the deduction allowed by this subdivision.
…
(3) The taxpayer shall add to taxable adjusted
gross income the amount of any recovery during the taxable year not
included in taxable adjusted gross income, to the extent the
taxpayer's deduction of the recovered amount in a prior taxable year reduced
the taxpayer's tax imposed by this Part but, due to differences between the
Code and this Part, did not reduce the amount of the taxpayer's tax imposed by
the Code. The taxpayer may deduct from taxable adjusted gross income
the amount of any recovery during the taxable year included in taxable adjusted
gross income under section 111 of the Code, to the extent the taxpayer's
deduction of the recovered amount in a prior taxable year reduced the taxpayer's
tax imposed by the Code but, due to differences between the Code and this Part,
did not reduce the amount of the taxpayer's tax imposed by this Part.
(4) A taxpayer may deduct from taxable adjusted
gross income the amount, not to exceed two thousand five hundred dollars
($2,500), contributed to an account in the Parental Savings Trust Fund of the
State Education Assistance Authority established pursuant to G.S. 116‑209.25.
In the case of a married couple filing a joint return, the maximum dollar
amount of the deduction is five thousand dollars ($5,000).
(5) The taxpayer shall add to taxable adjusted
gross income the amount deducted from taxable income in a prior
taxable year under subdivision (4) of this subsection to the extent this amount
was withdrawn from the Parental Savings Trust Fund of the State Education
Assistance Authority established pursuant to G.S. 116‑209.25 and not
used to pay for the qualified higher education expenses of the designated
beneficiary, unless the withdrawal was made without penalty under section 529
of the Code due to the death or permanent disability of the designated
beneficiary.
(6) A taxpayer who is an eligible firefighter or an
eligible rescue squad worker may deduct from taxable adjusted gross income
the sum of two hundred fifty dollars ($250.00). In the case of a married couple
filing a joint return, each spouse may qualify separately for the deduction
allowed under this subdivision. In order to claim the deduction allowed under
this subdivision, the taxpayer must submit with the tax return any
documentation required by the Secretary. An individual may not claim a
deduction as both an eligible firefighter and as an eligible rescue squad
worker in a single taxable year. The following definitions apply in this
subdivision:
a. Eligible firefighter. – An unpaid member of a volunteer fire department who attended at least 36 hours of fire department drills and meetings during the taxable year.
b. Eligible rescue squad worker. – An unpaid member of a volunteer rescue or emergency medical services squad who attended at least 36 hours of rescue squad training and meetings during the taxable year.
…."
SECTION 5.(b) G.S. 105‑151(a) reads as rewritten:
"(a) An individual who is a resident of this State is allowed a credit against the taxes imposed by this Part for income taxes imposed by and paid to another state or country on income taxed under this Part, subject to the following conditions:
…
(2) The fraction of the gross income, as calculated
under the Code and adjusted as provided in G.S. 105‑134.6 and G.S. 105‑134.7,
105‑134.6, that is subject to income tax in another state or
country shall be ascertained, and the North Carolina net income tax before
credit under this section shall be multiplied by that fraction. The credit
allowed is either the product thus calculated or the income tax actually paid
the other state or country, whichever is smaller.
…."
SECTION 5.(c) G.S. 105‑151.11(c) reads as rewritten:
"(c) Limitations. – A nonresident or part‑year
resident who claims the credit allowed by this section shall reduce the amount
of the credit by multiplying it by the fraction calculated under G.S. 105‑134.5(b)
or (c), as appropriate. No credit shall be allowed under this section for
amounts deducted from gross income in calculating North Carolina taxable
income under the Code. income. The credit allowed by this section
may not exceed the amount of tax imposed by this Part for the taxable year
reduced by the sum of all credits allowable, except for payments of tax made by
or on behalf of the taxpayer."
SECTION 5.(d) G.S. 105‑151.30(e) reads as rewritten:
"(e) No Double Benefit. – A taxpayer who claims a
credit under this section must add back to taxable adjusted gross income
any amount deducted under G.S. 105‑134.6(a2)the Code
for the donation of the oyster shells."
SECTION 5.(e) G.S. 105‑152 reads as rewritten:
"§ 105‑152. Income tax returns.
…
(c) Information Required With Return. – The income tax
return shall show the taxable adjusted gross income and
adjustments required by this Part and any other information the Secretary
requires. The Secretary may require some or all individuals required to file an
income tax return to attach to the return a copy of their federal income tax
return for the taxable year. The Secretary may require a taxpayer to provide
the Department with copies of any other return the taxpayer has filed with the
Internal Revenue Service and to verify any information in the return.
(d) Secretary May Require Additional Information. –
When the Secretary has reason to believe that any taxpayer conducts a trade or
business in a way that directly or indirectly distorts the taxpayer's taxable
adjusted gross income or North Carolina taxable income, the
Secretary may require any additional information for the proper computation of
the taxpayer's taxable adjusted gross income and North Carolina
taxable income. In computing the taxpayer's taxable adjusted gross income
and North Carolina taxable income, the Secretary shall consider the fair profit
that would normally arise from the conduct of the trade or business.
…."
SECTION 5.(f) G.S. 105‑160.1 reads as rewritten:
"§ 105‑160.1. Definitions.
The definitions provided in Part 2 of this Article shall apply in this Part except where the context clearly indicates a different meaning. In addition, as used in this Part, "taxable income" is defined in section 63 of the Code."
SECTION 5.(g) G.S. 105‑160.2 reads as rewritten:
"§ 105‑160.2. Imposition of tax.
The tax imposed by this Part shall apply applies to
the taxable income of estates and trusts as determined under the provisions of
the Code except as otherwise provided in this Part. The taxable income of an
estate or trust shall be is the same as taxable income for such
an estate or trust under the provisions of the Code, adjusted as provided in G.S. 105‑134.6
and G.S. 105‑134.7, 105‑134.6, except that the
adjustments provided in G.S. 105‑134.6 and G.S. 105‑134.7
shall be are apportioned between the estate or trust and the
beneficiaries based on the distributions made during the taxable year. The tax shall
be is computed on the amount of the taxable income of the estate or
trust that is for the benefit of a resident of this State, or for the benefit
of a nonresident to the extent that the income (i) is derived from North
Carolina sources and is attributable to the ownership of any interest in real
or tangible personal property in this State or (ii) is derived from a business,
trade, profession, or occupation carried on in this State. For purposes of the
preceding sentence, taxable income and gross income shall be is computed
subject to the adjustments provided in G.S. 105‑134.6 and G.S. 105‑134.7.105‑134.6.
The tax on the amount computed above shall be is at the rates
levied in G.S. 105‑134.2(a)(3). The fiduciary responsible for
administering the estate or trust shall pay theThe tax computed
under the provisions of this Part shall be paid by the fiduciary responsible
for administering the estate or trust.Part."
SECTION 6.(a) The first sentence of G.S. 105‑134.7(a)(3) is recodified as G.S. 105‑134.6(c)(17).
SECTION 6.(b) G.S. 105‑134.7(a)(6) is recodified as G.S. 105‑134.6(c)(18) and reads as rewritten:
"(18) A loss or deduction that was incurred or paid
and deducted from State taxable income in a taxable year beginning before
January 1, 1989, and is carried forward and deducted in a taxable year
beginning on or after January 1, 1989, under the Code shall be added to
taxable income.Code."
SECTION 6.(c) The second sentence of G.S. 105‑134.7(a)(3) is recodified as G.S. 105‑134.6(b)(24).
SECTION 6.(d) G.S. 134.7(a)(7) is recodified as G.S. 105‑134.6(d)(9).
SECTION 6.(e) G.S. 134.7(b) is recodified as G.S. 105‑134.6(d)(10).
SECTION 6.(f) The remainder of G.S. 105‑134.7 is repealed.
SECTION 7. G.S. 105‑151.18 reads as rewritten:
"§ 105‑151.18. Credit for the disabled.
(a) Disabled Taxpayer. – A taxpayer who (i) is retired on disability, (ii) at the time of retirement, was permanently and totally disabled, and (iii) claims a federal income tax credit under section 22 of the Code for the taxable year, is allowed as a credit against the tax imposed by this Part an amount equal to one‑third of the amount of the federal income tax credit for which the taxpayer is eligible under section 22 of the Code.
(b) Disabled Dependent. – If a dependent or spouse for
whom a taxpayer is allowed an exemption under the Code is permanently and
totally disabled, the taxpayer is allowed a credit against the tax imposed by
this Part. In order to claim the credit allowed by this subsection, the
taxpayer must attach to the tax return on which the credit is claimed a
statement from a physician or local health department certifying that the
dependent or spouse for whom the credit is claimed is permanently and totally
disabled, as defined in this section. The amount of the credit allowed shall
be is determined as follows: For a taxpayer whose North Carolina adjusted
gross taxable income does not exceed the appropriate income amount
provided in the table below, based on the taxpayer's filing status, the credit
allowed is the appropriate initial credit provided in the table below. For a
taxpayer whose North Carolina adjusted gross taxable income does
exceed the appropriate income amount, the credit allowed is the appropriate
initial credit reduced by four dollars ($4.00) for every one thousand dollars
($1,000) by which the taxpayer's North Carolina adjusted gross taxable
income exceeds the appropriate income amount.
Initial Income
Filing Status Credit Amount
Head of Household $64.00 $16,000
Surviving Spouse or Joint Return $80.00 $20,000
Single $48.00 $12,000
Married Filing Separately $40.00 $10,000
(c) Definitions. – The following definitions apply in this section:
(1) North Carolina Adjusted Gross Income. taxable
income. – Defined in G.S. 105‑134.5.Adjusted gross income, as
determined under the Code, adjusted as provided in G.S. 105‑134.6
and G.S. 105‑134.7.
(2) Permanently and Totally Disabled. totally
disabled. – Unable to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment that can be
expected to result in death or that has lasted or can be expected to last for a
continuous period of not less than 12 months. For the purpose of this section,
a minor is permanently and totally disabled if the impact of the impairment on
the minor's ability to function is equivalent in severity to that which would
make an adult unable to engage in any substantial gainful activity.
(d) Limitations. – A nonresident or part‑year resident who claims the credit allowed by this section shall reduce the amount of the credit by multiplying it by the fraction calculated under G.S. 105‑134.5(b) or (c), as appropriate. The credit allowed under this section may not exceed the amount of tax imposed by this Part for the taxable year reduced by the sum of all credits allowable, except payments of tax made by or on behalf of the taxpayer."
SECTION 8. G.S. 105‑164.3 reads as rewritten:
"§ 105‑164.3. Definitions.
The following definitions apply in this Article:
…
(37b) School instructional material. – Written material commonly used by a student in a course of study as a reference and to learn the subject being taught. The following is an all‑inclusive list:
a. Reference books.
b. Reference maps and globes.
c. Textbooks.
d. Workbooks.Defined in the
Streamlined Agreement.
…
(44) Storage. – The keeping or retention in this State for any purpose, except sale in the regular course of business, of tangible personal property or digital property purchased from a retailer. The term does not include a purchaser's storage of tangible personal property or digital property in any of the following circumstances:
a. When the purchaser is able to document that at the time the purchaser acquires the property the property is designated for the purchaser's use outside the State and the purchaser subsequently takes it outside the State and uses it solely outside the State.
b. When the purchaser acquires the property to process, fabricate, manufacture, or otherwise incorporate it into or attach it to other property for the purchaser's use outside the State and, after incorporating or attaching the purchased property, the purchaser subsequently takes the other property outside the State and uses it solely outside the State.
…
(45a) Streamlined Agreement. – The Streamlined Sales and
Use Tax Agreement as amended as of December 19, 2011.May 24, 2012.
…."
SECTION 9. G.S. 105‑164.4(a)(3) reads as rewritten:
"(3) A tax at the general rate applies to the gross receipts derived from the rental of an accommodation. The tax does not apply to (i) a private residence or cottage that is rented for fewer than 15 days in a calendar year; (ii) an accommodation rented to the same person for a period of 90 or more continuous days; or (iii) an accommodation arranged or provided to a person by a school, camp, or similar entity where a tuition or fee is charged to the person for enrollment in the school, camp, or similar entity.
Gross receipts derived from the rental of an accommodation include the sales price of the rental of the accommodation. The sales price of the rental of an accommodation is determined as if the rental were a rental of tangible personal property. The sales price of the rental of an accommodation marketed by a facilitator includes charges designated as facilitation fees and any other charges necessary to complete the rental.
A person who provides an
accommodation that is offered for rent is considered a retailer under this
Article. A facilitator must report to the retailer with whom it has a contract
the sales price a consumer pays to the facilitator for an accommodation rental
marketed by the facilitator. A retailer must notify a facilitator when an
accommodation rental marketed by the facilitator is completed and, within
three business days of receiving the notice, and the facilitator
must send the retailer the portion of the sales price the facilitator owes the
retailer and the tax due on the sales price. price no later than 10
days after the end of each calendar month. A facilitator that does not send
the retailer the tax due on the sales price is liable for the amount of tax the
facilitator fails to send. A facilitator is not liable for tax sent to a
retailer but not remitted by the retailer to the Secretary. Tax payments
received by a retailer from a facilitator are held in trust by the retailer for
remittance to the Secretary. A retailer that receives a tax payment from a
facilitator must remit the amount received to the Secretary. A retailer is not
liable for tax due but not received from a facilitator. The requirements
imposed by this subdivision on a retailer and a facilitator are considered
terms of the contract between the retailer and the facilitator.
A person who, by written contract, agrees to be the rental agent for the provider of an accommodation is considered a retailer under this Article and is liable for the tax imposed by this subdivision. The liability of a rental agent for the tax imposed by this subdivision relieves the provider of the accommodation from liability. A rental agent includes a real estate broker, as defined in G.S. 93A‑2.
The following definitions apply in this subdivision:
a. Accommodation. – A hotel room, a motel room, a residence, a cottage, or a similar lodging facility for occupancy by an individual.
b. Facilitator. – A person who is not a rental agent and who contracts with a provider of an accommodation to market the accommodation and to accept payment from the consumer for the accommodation."
SECTION 10. G.S. 105‑164.6(c) reads as rewritten:
"(c) Credit. – A credit is allowed against the tax imposed by this section for the following:
(1) The amount of sales or use tax paid on the item to
this State. State, provided the tax is stated and charged separately
on the invoices or other documents of the retailer given to the purchaser at
the time of the sale, except as otherwise provided in G.S. 105‑164.7,
or provided the retailer remitted the tax subsequent to the sale and the
purchaser obtains such documentation. Payment of sales or use tax to this
State on an item by a retailer extinguishes the liability of a purchaser for
the tax imposed under this section.
(2) The amount of sales or use tax due and paid on the item to another state. If the amount of tax paid to the other state is less than the amount of tax imposed by this section, the difference is payable to this State. The credit allowed by this subdivision does not apply to tax paid to a state that does not grant a similar credit for sales or use taxes paid in North Carolina."
SECTION 11. G.S. 105‑164.13 reads as rewritten:
"§ 105‑164.13. Retail sales and use tax.
The sale at retail and the use, storage, or consumption in this State of the following tangible personal property, digital property, and services are specifically exempted from the tax imposed by this Article:
…
(33a) Tangible personal property sold by a retailer to a
purchaser within or withoutinside or outside this State, when the
property is delivered by the retailer in this State to a common carrier or to
the United States Postal Service for delivery to the purchaser or the purchaser's
designees outside this State and the purchaser does not subsequently use the
property in this State. This exemption includes printed material sold by a
retailer to a purchaser inside or outside this State when the printed material
is delivered directly to a mailing house, or to a common carrier, or to the
United States Postal Service for delivery to a mailing house in this State that
will preaddress and presort the material and deliver it to a common carrier or
to the United States Postal Service for delivery to recipients outside this
State designated by the purchaser.
…
(43a) Computer software that meets any of the following descriptions:
a. It is designed purchased to run on an
enterprise server operating system. The exemption includes a purchase or
license of computer software for high‑volume, simultaneous use on
multiple computers, that is housed or maintained on an enterprise server or end
users' computers. The exemption includes software designed to run a computer
system, an operating program, or application software.
b. It is sold to a person who operates a datacenter and is used within the datacenter.
c. It is sold to a person who provides cable service, telecommunications service, or video programming and is used to provide ancillary service, cable service, Internet access service, telecommunications service, or video programming.
...."
SECTION 12. G.S. 105‑164.14(b) reads as rewritten:
"(b) Nonprofit Entities and Hospital Drugs. – A nonprofit entity is allowed a semiannual refund of sales and use taxes paid by it under this Article on direct purchases of tangible personal property and services, other than electricity, telecommunications service, and ancillary service, for use in carrying on the work of the nonprofit entity. Sales and use tax liability indirectly incurred by a nonprofit entity on building materials, supplies, fixtures, and equipment that become a part of or annexed to any building or structure that is owned or leased by the nonprofit entity and is being erected, altered, or repaired for use by the nonprofit entity for carrying on its nonprofit activities is considered a sales or use tax liability incurred on direct purchases by the nonprofit entity. A request for a refund must be in writing and must include any information and documentation required by the Secretary. A request for a refund for the first six months of a calendar year is due the following October 15; a request for a refund for the second six months of a calendar year is due the following April 15.
The refunds allowed under this subsection do not apply to an
entity that is owned and controlled by the United States or to an entity that
is owned or controlled by the State and is not listed in this subsection. A
hospital that is not listed in this subsection is allowed a semiannual refund
of sales and use taxes paid by it on medicines and over‑the‑counter
drugs purchased for use in carrying out its work. The following nonprofit
entities are allowed a refund under this subsection:
(1) Hospitals not operated for profit, including hospitals and medical accommodations operated by an authority or other public hospital described in Article 2 of Chapter 131E of the General Statutes.
(2) An organization that is exempt from income tax under section 501(c)(3) of the Code, other than an organization that is properly classified in any of the following major group areas of the National Taxonomy of Exempt Entities:
a. Community Improvement and Capacity Building.
b. Public and Societal Benefit.
c. Mutual and Membership Benefit.
(2a) An organization that is exempt from income tax under the Code and is one of the following:
a. A volunteer fire department.
b. A volunteer emergency medical services squad.
(2b) An organization that is a single member LLC that is disregarded for income tax purposes and satisfies all of the following conditions:
a. The owner of the LLC is an organization that is exempt from income tax under section 501(c)(3) of the Code.
b. The LLC is a nonprofit entity that would be eligible for an exemption under 501(c)(3) of the Code if it were not disregarded for income tax purposes.
c. The LLC is not an organization that would be properly classified in any of the major group areas of the National Taxonomy of Exempt Entities listed in subdivision (2) of this subsection."
SECTION 13. G.S. 105‑164.27A(a) reads as rewritten:
"(a) General. – A general direct pay permit
authorizes its holder to purchase any tangible personal property, digital
property, or service without paying tax to the seller and authorizes the seller
to not collect any tax on a sale to the permit holder. A person who purchases
an item under a direct pay permit issued under this subsection is liable for
use tax due on the purchase. The tax is payable when the property is placed in
use or the service is received. A direct pay permit issued under this
subsection does not apply to taxes imposed under G.S. 105‑164.4 on electricity.sales
of electricity or the gross receipts derived from rentals of accommodations.
A person who purchases an item for storage, use, or consumption in this State whose tax status cannot be determined at the time of the purchase because of one of the reasons listed below may apply to the Secretary for a general direct pay permit:
(1) The place of business where the item will be stored, used, or consumed is not known at the time of the purchase and a different tax consequence applies depending on where the item is used.
(2) The manner in which the item will be stored, used, or consumed is not known at the time of the purchase and one or more of the potential uses is taxable but others are not taxable."
SECTION 14. G.S. 105‑164.35 is repealed.
SECTION 15. G.S. 105‑164.42L reads as rewritten:
"§ 105‑164.42L.
Databases on taxing jurisdictions.Liability relief for erroneous
information or insufficient notice by Department.
(a) The Secretary may develop databases that provide information on the boundaries of taxing jurisdictions and the tax rates applicable to those taxing jurisdictions. A person who relies on the information provided in these databases is not liable for underpayments of tax attributable to erroneous information provided by the Secretary in those databases.
(b) The Secretary may develop a taxability matrix that provides information on the taxability of certain items. A person who relies on the information provided in the taxability matrix is not liable for underpayments of tax attributable to erroneous information provided by the Secretary in the taxability matrix.
(c) A retailer is not liable for an underpayment of tax attributable to a rate change when the State fails to provide for at least 30 days between the enactment of the rate change and the effective date of the rate change if the conditions of this subsection are satisfied. However, if the State establishes the retailer fraudulently failed to collect at the new rate or solicited customers based on the immediately preceding effective rate this liability relief does not apply. Both of the following conditions must be satisfied for liability relief:
(1) The retailer collected tax at the immediately preceding rate.
(2) The retailer's failure to collect at the newly effective rate does not extend beyond 30 days after the date of enactment of the new rate."
SECTION 16. G.S. 105‑187.51(a) reads as rewritten:
"(a) Scope. – A privilege tax is imposed on the following persons:
(1) A manufacturing industry or plant that
purchases mill machinery or mill machinery parts or accessories for storage,
use, or consumption in this State.State to produce a product for
sale. A manufacturing industry or plant does not include the
following:
a. A delicatessen, cafe, cafeteria, restaurant, or another similar retailer that is principally engaged in the retail sale of foods prepared by it for consumption on or off its premises.
b. A production company.
(2) A contractor or subcontractor that purchases mill
machinery or mill machinery parts or accessories for use in the performance of
a contract with a manufacturing industry or plant.
(3) A subcontractor that purchases mill machinery or
mill machinery parts or accessories for use in the performance of a contract
with a general contractor that has a contract with a manufacturing industry
or plant."
SECTION 17. G.S. 105‑187.52(b) reads as rewritten:
"(b) Credit. – A credit is allowed against the tax
imposed by this Article for the amount of a sales or use tax, privilege or
excise tax, or substantially equivalent tax due and paid to another state. state
or for the amount of sales and use tax paid to this State. The credit
allowed by this subsection does not apply to tax paid to another state that
does not grant a similar credit for the privilege tax paid in North Carolina."
SECTION 18. G.S. 105‑236.1(a) reads as rewritten:
"(a) General. – The Secretary may appoint employees of the Unauthorized Substances Tax Section of the Tax Enforcement Division to serve as revenue law enforcement officers having the responsibility and subject‑matter jurisdiction to enforce the excise tax on unauthorized substances imposed by Article 2D of this Chapter.
The Secretary may appoint up to 11 employees of the Motor
Fuels Tax Investigations Section of the Tax Enforcement Division
to serve as revenue law enforcement officers having the responsibility and
subject‑matter jurisdiction to enforce the taxes on motor fuels imposed
by Articles 36B, 36C, and 36D of this Chapter and by Chapter 119 of the General
Statutes.
The Secretary may appoint employees of the Criminal Investigations Section of the Tax Enforcement Division to serve as revenue law enforcement officers having the responsibility and subject‑matter jurisdiction to enforce the following tax violations and criminal offenses:
(1) The felony and misdemeanor tax violations in G.S. 105‑236.
(2) The misdemeanor tax violations in G.S. 105‑449.117 and G.S. 105‑449.120.
(3) The following criminal offenses when they involve a tax imposed under Chapter 105 of the General Statutes:
a. G.S. 14‑91 (Embezzlement of State Property).
b. G.S. 14‑92 (Embezzlement of Funds).
c. G.S. 14‑100 (Obtaining Property By False Pretenses).
c1. G.S. 14‑113.20 (Identity Theft).
c2. G.S. 14‑133.20A (Trafficking in Stolen Identities).
d. G.S. 14‑119 (Forgery).
e. G.S. 14‑120 (Uttering Forged Paper).
f. G.S. 14‑401.18 (Sale of Certain Packages of Cigarettes)."
SECTION 19. G.S. 105‑242.2(b) reads as rewritten:
"(b) Responsible Person. – Each responsible person in a business entity is personally and individually liable for all of the taxes listed in this subsection. In each case, the term 'taxes' specifically includes any interest and penalties included in the assessment against the business entity that remain unpaid. If a business entity does not pay a tax it owes after the tax becomes collectible under G.S. 105‑241.22, the Secretary may enforce the responsible person's liability for the tax by sending the responsible person a notice of proposed assessment in accordance with G.S. 105‑241.9. The taxes for which a responsible person may be held personally and individually liable are:
(1) All sales and use taxes collected by the business entity upon its taxable transactions.
(2) All sales and use taxes due upon taxable transactions of the business entity but upon which it failed to collect the tax, but only if the person knew, or in the exercise of reasonable care should have known, that the tax was not being collected.
(3) All taxes due from the business entity pursuant to the provisions of Articles 36C and 36D of Subchapter V of this Chapter and all taxes payable under those Articles by it to a supplier for remittance to this State or another state.
(4) All income taxes required to be withheld from the wages of employees of the business entity."
SECTION 20. G.S. 105‑256(a)(9) is repealed.
SECTION 21. G.S. 105‑259(b) reads as rewritten:
"(b) Disclosure Prohibited. – An officer, an employee, or an agent of the State who has access to tax information in the course of service to or employment by the State may not disclose the information to any other person except as provided in this subsection. Standards used or to be used for the selection of returns for examination and data used or to be used for determining the standards may not be disclosed for any purpose. All other tax information may be disclosed only if the disclosure is made for one of the following purposes:
…
(15a) To furnish to the head of the appropriate State
or local, state, or federal law enforcement agency agency,
including a prosecutorial agency, information concerning the commission of
an offense under the jurisdiction of that agency discovered by when the
Department during has initiated a criminal investigation of the
taxpayer.
…
(29) To provide to the Economic Investment Committee
established pursuant to G.S. 143B‑437.48 143B‑437.54
information necessary to implement Part 2F of Article 10 of Chapter 143B
of the General Statutes.economic development programs under the
responsibility of the Committee."
SECTION 22. Section 6A.3(d) of S.L. 2012‑142 reads as rewritten:
"SECTION 6A.3.(d) Funding. – Of funds generated
from increased revenues or cost savings as compared to the baselines
established by subdivision (1) of subsection (c) of this section, in the
General Fund, the Highway Fund, and that State portion of the
Unauthorized Substance Tax collections of the Special Revenue Fund, the sum of
up to a total of sixteen million dollars ($16,000,000) may be used authorized
by the Office of State Budget and Management to make purchases related to
the implementation of the additional public‑private arrangement
authorized by this section, including payment for services from non‑State
entities."
SECTION 23. G.S. 105‑113.112 reads as rewritten:
"§ 105‑113.112. Confidentiality of information.
(a) Information obtained by the Department in
the course of administering the tax imposed by this Article, including information
on whether the Department has issued a revenue stamp to a person, is
confidential tax information and is subject to the following restrictions on
disclosure:
(1) G.S. 105‑259 prohibits the
disclosure of the information, except in the limited circumstances provided in
that statute.
(2) The information provisions of G.S. 105‑259.
(b) Information obtained by the Department
from the taxpayer in the course of administering the tax imposed by this
Article, including information on whether the Department has issued a revenue
stamp to a person, may not be used as evidence, as defined in G.S. 15A‑971,
by a prosecutor in a criminal prosecution of the taxpayer for an
offense other than an offense under this Article or under Article 9 of this
Chapter. related to the manufacturing, possession, transportation,
distribution, or sale of the unauthorized substance. Under this
prohibition, no officer, employee, or agent of the Department may testify about
thethis information in a criminal prosecution of the taxpayer for
an offense related to the manufacturing, possession, transportation,
distribution, or sale of the unauthorized substance.other than an
offense under this Article or under Article 9 of this Chapter. This subdivision
subsection implements the protections against double jeopardy and
self‑incrimination set out in Amendment V of the United States
Constitution and the restrictions in it apply regardless of whether information
may be disclosed under G.S. 105‑259. This subdivision does not
apply to information obtained from a source other than an employee, officer, or
agent of the Department. This subdivision does not prohibit testimony by an
officer, employee, or agent of the Department concerning an offense committed
against that individual in the course of administering this Article. An
officer, employee, or agent of the Department who provides evidence or
testifies in violation of this subdivision is guilty of a Class 1 misdemeanor."
SECTION 24.(a) G.S. 105‑113.4A reads as rewritten:
"§ 105‑113.4A. Licenses.
(a) General. – To obtain a license required by this
Article, an applicant must apply to file an application with the
Secretary on a form provided by the Secretary and pay the tax due for
the license. An application must include the applicant's name, address,
federal employer identification number, and any other information required by
the Secretary. A license is not transferable or assignable and must be
displayed at the place of business for which it is issued.
(b) Requirements. – An applicant for a license must meet the following requirements:
(1) If the applicant is a corporation, the applicant must either be incorporated in this State or be authorized to transact business in this State.
(2) If the applicant for a license is a limited liability company, the applicant must either be organized in this State or be authorized to transact business in this State.
(3) If the applicant for a license is a limited partnership, the applicant must either be formed in this State or be authorized to transact business in this State.
(4) If the applicant for a license is an individual or a general partnership, the applicant must designate an agent for service of process and give the agent's name and address.
(c) Denial. – The Secretary may investigate an applicant for a license required under this Article to determine if the information the applicant submits with the application is accurate and if the applicant is eligible to be licensed under this Article. The Secretary may refuse to issue a license to an applicant that has done any of the following:
(1) Submitted false or misleading information on its application.
(2) Had a license issued under this Article cancelled by the Secretary for cause.
(3) Had a tobacco products license or registration issued by another state cancelled for cause.
(4) Been convicted of fraud or misrepresentation.
(5) Been convicted of any other offense that indicates the applicant may not comply with this Article if issued a license.
(6) Failed to remit payment for a tax debt under this Chapter. The term 'tax debt' has the same meaning as defined in G.S. 105‑243.1.
(7) Failed to file a return due under this Chapter.
(b)(d) Refund. – A refund of a license tax is
allowed only when the tax was collected or paid in error. No refund is allowed
when a license holder surrenders a license or the Secretary revokes a license.
(c)(e) Duplicate or Amended License. – Upon
application to the Secretary, a license holder may obtain without charge one
of the following:a duplicate or amended license as provided in this
subsection. A duplicate or amended license must state that it is a duplicate or
amended license, as appropriate.
(1) A duplicate license, if the license holder establishes that the original license has been lost, destroyed, or defaced.
(2) An amended license, if the license holder establishes that the location of the place of business for which the license was issued has changed.
A duplicate or amended license shall state that it is a
duplicate or amended license, as appropriate.
(f) Information on License. – The Secretary must include the following information on each license required by this Article:
(1) The legal name of the license holder.
(2) The name under which the license holder conducts business.
(3) The physical address of the place of business of the license holder.
(4) The account number assigned to the license by the Department.
(g) Records. – The Secretary must keep a record of the following:
(1) Applicants for a license under this Article.
(2) Persons to whom a license has been issued under this Article.
(3) Persons that hold a current license issued under this Article, by license category.
(h) Lists. – The Secretary must provide the list required under subsection (g) of this section upon request of a manufacturer that is a license holder under this Article. The list must state the name, account number, and business address of each license holder on the list."
SECTION 24.(b) G.S. 105‑113.4B reads as rewritten:
"§ 105‑113.4B. Reasons why the Secretary can cancel a license.
(a) Reasons. – The Secretary may cancel a license issued under this Article upon the written request of the license holder. The Secretary may summarily cancel the license of a license holder when the Secretary finds that the license holder is incurring liability for the tax imposed under this Article after failing to pay a tax when due under this Article. In addition, the Secretary may cancel the license of a license holder that commits one or more of the following acts after holding a hearing on whether the license should be cancelled:
(1) A violation of this Article.Fails to
obtain a license required by this Article.
(2) Willfully fails to file a return required by this Article.
(3) Willfully fails to pay a tax when due under this Article.
(4) Makes a false statement in an application or return required under this Article.
(5) Fails to keep records as required by this Article.
(6) Refuses to allow the Secretary or a representative of the Secretary to examine the person's books, accounts, and records concerning tobacco product.
(7) Fails to disclose the correct amount of tobacco product taxable in this State.
(8) Fails to file a replacement bond or an additional bond if required by the Secretary under this Article.
(2)(9) A violation of Violates G.S. 14‑401.18.
(b) Procedure. – The Secretary must send a person whose license is summarily cancelled a notice of the cancellation and must give the person an opportunity to have a hearing on the cancellation within 10 days after the cancellation. The Secretary must give a person whose license may be cancelled after a hearing at least 10 days' written notice of the date, time, and place of the hearing. A notice of a summary license cancellation and a notice of hearing must be sent by registered mail to the last known address of the license holder.
(c) Release of Bond. – When the Secretary cancels a license and the license holder has paid all taxes and penalties due under this Article, the Secretary must take one of the following actions concerning a bond or an irrevocable letter of credit filed by the license holder:
(1) Return an irrevocable letter of credit to the license holder.
(2) Return a bond to the license holder or notify the person liable on the bond and the license holder that the person is released from liability on the bond."
SECTION 24.(c) G.S. 105‑113.13 reads as rewritten:
"§ 105‑113.13.
Secretary may investigate applicant for distributor's license and require
a bond.bond or irrevocable letter of credit.
(a) Investigation. – The Secretary may
investigate an applicant for a distributor's license to determine if the
information the applicant submits with the application is accurate and if the
applicant is eligible to be licensed as a distributor. The Secretary may
decline to issue a distributor's license to an applicant when the Secretary has
reasonable cause to believe any of the following:
(1) That the applicant has willfully withheld
information requested by the Secretary for the purpose of determining the
applicant's eligibility for the license.
(2) That information submitted with the
application is false or misleading.
(3) That the application is not made in good
faith.
(b) Bond. – The Secretary may require a
distributor to furnish a bond in an amount that adequately protects the State
from loss if the distributor fails to pay taxes due under this Part. A bond
shall be conditioned on compliance with this Part, shall be payable to the
State, and shall be in the form required by the Secretary. The Secretary shall
set the bond amount based on the anticipated tax liability of the distributor.
The Secretary shall periodically review the sufficiency of bonds required of
the distributor and shall increase the amount of a required bond if the bond
amount no longer covers the anticipated tax liability of the distributor. The
Secretary shall decrease the amount of a required bond if the Secretary finds
that a lower bond amount will protect the State adequately from loss. For
purposes of this section, a bond may also include an irrevocable letter of
credit."
SECTION 25.(a) G.S. 105‑164.3 reads as rewritten:
"§ 105‑164.3. Definitions.
The following definitions apply in this Article:
(1) Advertising and promotional direct mail. – Printed material that meets the definition of 'direct mail' and the primary purpose of which is to attract public attention to a product, person, business, or organization, or to attempt to sell, popularize, or secure financial support for a product, person, business, or organization. As used in this subdivision, 'product' means tangible personal property, digital property, or a service.
(1)(1a) Analytical services. – Testing
laboratories that are included in national industry 541380 of NAICS or medical
laboratories that are included in national industry 621511 of NAICS.
(1a)(1b) Ancillary service. – A service associated
with or incidental to the provision of a telecommunications service. The term
includes detailed communications billing, directory assistance, vertical
service, and voice mail service. A vertical service is a service, such as call
forwarding, caller ID, three‑way calling, and conference bridging, that
allows a customer to identify a caller or manage multiple calls and call
connections.
(1b)(1c) through (1d)(1e)
Reserved for future codification purposes.
(1e)(1f) Audio work. – A series of musical,
spoken, or other sounds, including a ringtone.
(1f)(1g) Reserved for future codification
purposes.
(1g)(1h) Audiovisual work. – A series of
related images and any sounds accompanying the images that impart an impression
of motion when shown in succession.
(1h)(1i) Reserved for future codification
purposes.
(1i)(1j) Bundled transaction. – A retail sale of
two or more distinct and identifiable products, at least one of which is
taxable and one of which is exempt, for one nonitemized price. Products are not
sold for one nonitemized price if an invoice or another sales document made
available to the purchaser separately identifies the price of each product. A
bundled transaction does not include the retail sale of any of the following:
a. A product and any packaging item that accompanies the product and is exempt under G.S. 105‑164.13(23).
b. A sale of two or more products whose combined price varies, or is negotiable, depending on the products the purchaser selects.
c. A sale of a product accompanied by a transfer of another product with no additional consideration.
d. A product and the delivery or installation of the product.
e. A product and any service necessary to complete the sale.
(1j)(1k) Reserved for future codification
purposes.
(1k)(1l) Business. – An activity a person
engages in or causes another to engage in with the object of gain, profit,
benefit, or advantage, either direct or indirect. The term does not include an
occasional and isolated sale or transaction by a person who does not claim to
be engaged in business.
(1l)(1m) Reserved for future codification
purposes.
(1m)(1n) Cable service. – The one‑way
transmission to subscribers of video programming or other programming service
and any subscriber interaction required to select or use the service.
...."
SECTION 25.(b) G.S. 105‑164.4B(d) reads as rewritten:
"(d) Exceptions. – This section does not apply to the following:
(1) Telecommunications services. – Telecommunications services are sourced in accordance with G.S. 105‑164.4C.
(2) Direct mail. – Direct mail that meets one of the
following descriptions is sourced to the location where the property is
delivered, and direct mail that does not meet one of these descriptions is
sourced to the location from which the direct mail was shipped:is
sourced as follows:
a. Direct mail To the location where the
direct mail is delivered if it (i) is purchased pursuant to a direct pay permit.permit;
or (ii) when
b. When the purchaser provides the
seller with information to show the jurisdictions to which the direct mail is
to be delivered.
b. To the location from which the direct mail was shipped if (i) it is advertising and promotional direct mail; and (ii) sub‑subdivision a. of this subdivision does not apply.
c. To the location indicated by an address for the purchaser that is available from the business records of the seller that are maintained in the ordinary course of the seller's business when use of this address does not constitute bad faith if neither sub‑subdivision a. nor b. of this subdivision applies.
(3) Florist wire sale. – A florist wire sale is sourced to the business location of the florist that takes an order for the sale. A "florist wire sale" is a sale in which a retail florist takes a customer's order and transmits the order to another retail florist to be filled and delivered."
SECTION 26.(a) Section 7 of S.L. 2011‑296 reads as rewritten:
"SECTION 7. This act becomes effective October
1, 2011, and applies to instruments registered on or after that date. Sections
1 through 3 of this act expire July 1, 2013."
SECTION 26.(b) The lead‑in language for Section 2.16 of S.L. 2012‑79 reads as rewritten:
"SECTION 2.16. Effective when it becomes law,
but expiring at the same time as Section 1 of S.L. 2011‑296 expires
(currently July 1, 2013), law, G.S. 161‑10(a), as
rewritten by S.L. 2011‑296, reads as rewritten:"
SECTION 27. Sections 5, 6, and 7 of this act are effective for taxable years beginning on or after January 1, 2012. Section 24 of this act becomes effective July 1, 2013. The remainder of this act is effective when it becomes law.