AN ACT TO FACILITATE RAPID RESPONSE TO STATE DECLARED DISASTERS BY EXEMPTING CERTAIN BUSINESSES AND EMPLOYEES FROM REGISTRATION AND TAX LAWS DURING THE DISASTER RESPONSE PERIOD. SL 2019-187. Enacted August 1, 2019. Effective August 1, 2019.
Summary date: Aug 5 2019 - View summary
Summary date: Jul 9 2019 - View summary
Senate committee substitute to the 1st edition makes the following changes.
Makes the following changes to proposed GS 166A-19.70A. Makes a technical change to the lead-in language. Retitles the statute as Facilitate critical infrastructure disaster relief. Amends the statute's purpose to modify the legislative finding by listing the state tax laws and regulatory requirements that nonresident businesses and nonresident employees are exempt from when providing temporary disaster-related work in the state during a disaster response period at the request of a critical infrastructure company. Exemptions include corporate and individual income tax, franchise tax, unemployment tax, workers' compensation, and certificates of authority from the Secretary of State (previously set forth separate subsections for nonresident businesses and employees, and included exemptions from S-corporation income tax and information return requirements). Modifies and adds to the definitions provided. Amends disaster response period, now defined to expire on the earlier of 60 days following the expiration of the disaster declaration or 180 days following the disaster declaration's issuance (previously, extended 60 days following the declaration's expiration only). Replaces the term out-of-state business with the term nonresident business, defining the term to mean an entity that has not been required to file an income or franchise tax return with the State for three years prior to the disaster response period, other than those arising from the performance of disaster-related work during a tax year prior to the statute's enactment, that is a nonresident entity and/or a nonresident individual who owns an unincorporated business as a sole proprietor. Similarly, replaces the term out-of-state employee with nonresident employee. Adds the terms corporation, employee, nonresident entity, and nonresident individual. Modifies the terms registered public communications provider and registered public utility to refer to corporations doing business in the state rather than a person registered to conduct business in the state. Further amends registered public utility to include corporations subject to the control of the NC Rural Electrification Authority. Now requires a critical infrastructure company to provide notification to the Department of Revenue (Department) within 90 days of the expiration of the disaster response period (previously required notification of the State Emergency Response Team within 30 days of the business's entry into the state). Adds a requirement for a nonresident business to provide notification to the Department within 90 days of the date the nonresident business concludes its disaster-related work. Requires the notifications to be in the form and manner required by the Department Secretary, and details each notification's required content. Establishes that failure to submit a timely notification forfeits the relief provided by the statute for the nonresident business. Makes clarifications to the statute's limitations, specifying that the statute only provides exemptions for nonresident businesses and nonresident employees who would not be subject to state tax and regulatory requirements but for their performance of disaster-related work and only during a disaster response period.
Amends the following statutes to implement the intended exceptions for nonresident businesses and nonresident employees performing requested disaster related work: GS 57D-1-24, GS 96-1, GS 105-114, GS 105-130.1, GS 105-130.5, GS 105-131.7, GS 105-154, GS 105-153.2, GS 105-153.8, GS 105-163.1, GS 105-163.3, and GS 105-163.7. Eliminates the proposed conforming changes to GS 96-9.2, GS 97-13, GS 105-125, GS 105-130.11, GS 105-153.4, and GS 105-163.2.
Deletes proposed GS 55-1-51, which provided exemptions from certificate of authority requirements for certain disaster relief activities (critical infrastructure work and motor fuel transport) and instead enacts GS 55-15-01(e), providing for substantively identical exemptions.
Makes conforming modifications to the proposed changes to GS 105-130.5, now adding to the required additions to federal taxable income in determining state net income payments made to an affiliate or subsidiary not subject to tax in accordance with the policy in new GS 166A-19.70A, to the extent the payments are deducted in determining federal taxable income.
Adds to GS 105-163.3, establishing that businesses are exempt from state withholding requirements for wages paid to nonresident employees or compensation paid to a nonresident ITIN contractor when derived from disaster-related work performed during a disaster response period at the request of a critical infrastructure company.
Further amends GS 105-131.7, GS 105-154, and GS 105-163.7 to require nonresident entities and employers exempt under the policy in new GS 166A-19.70A to provide information to their shareholders, partners, and employees, as applicable, even though they are not required to file a return with the Department, so that the shareholders, partners, and employees may properly file a state income tax return.
Maintains proposed GS 105-449.69A, allowing the issuance of a temporary license to import, export, distribute, or transport motor fuel in the state in response to a disaster declaration. Makes a technical change.
Changes the effective date of the act, now applicable to disaster declarations on or after the date the act becomes law (was, for taxable years beginning on or after January 1, 2019).
Summary date: Apr 2 2019 - View summary
Identical to H 538, filed 4/2/19.
Enacts new GS 166A-19.70A as follows. Defines terms that are used in the statute and sets out the statute's purpose. Provides that an out-of-state business performing disaster-related work in the state during a disaster response period at the request of a critical infrastructure company (a registered public communications provider or a registered public utility, as defined in the statute) is not considered to be conducting business in the state and is therefore exempt from franchise tax, income tax, S-corporation income tax, information returns, unemployment tax, workers' compensation, and registration with the Secretary of State to transact business in the state. These exemptions cease to apply when the disaster response period expires. Disaster-related work is defined as repairing, renovating, installing, building, or performing services on critical infrastructure that has been damaged, impaired, or destroyed as a result of a disaster or emergency in an area covered by the disaster declaration. Provides that an out-of-state employee (meaning a nonresident who is an employee of an out-of-state business entitled to the relief described above or a nonresident employee of a critical infrastructure company temporarily in the state to perform disaster-related work during the disaster response period) is not required to pay state income tax, or file an income tax return, on earnings received for disaster-related work performed during a disaster response period. Provides that the employer of an out-of-state employee is not required to withhold income tax from the wages of the employee. Requires a critical infrastructure company that requests an out-of-state business to perform disaster-related work during the disaster response period to notify the State Emergency Response Team (Team) within 30 business days of the out-of-state business's entry into the state. Sets out information that must be included in the notice. Requires the Team to disseminate the information to the appropriate state agencies. Makes conforming changes to GS 96-9.2, GS 97-13, GS 105-125, GS 105-130.11, GS 105-131.7, GS 105-153.4, GS 105-153.8, GS 105-154, and GS 105-163.2.
Enacts new GS 55-1-51 by providing that an out-of-state business performing disaster-related work in this state during a disaster response period at the request of a critical infrastructure company is not required to obtain a certificate of authority from the Secretary of State. Provides that a person issued a temporary license by the Department of Revenue to import, export, distribute, or transport motor fuel in this state in response to a disaster declaration is not required to obtain a certificate of authority from the Secretary of State to transact business in the state for the duration of the temporary license.
Amends GS 105-130.5 by adding to the required additions to federal taxable income in determining state net income payments made to a related party not subject to tax in accordance with the policy in new GS 166A-19.70A, to the extent the payments are deducted in determining federal taxable income.
Enacts new GS 105-449.69A allowing the issuance of a temporary license to import, export, distribute, or transport motor fuel in the state in response to a disaster declaration, which expires upon the expiration of the disaster declaration. Requires filing an application for a temporary license within seven calendar days from the date of the disaster declaration. Requires the application include specified information. Allows issuance of a temporary licence without requiring the applicant to file a bond or irrevocable letter of credit and without requiring the applicant to be authorized to transact business in the state with the Secretary of State.
Applies to taxable years beginning on or after January 1, 2019.