IRC UPDATE/MOTOR FUEL CHANGES. (NEW)

View NCGA Bill Details2015-2016 Session
Senate Bill 20 (Public) Filed Tuesday, February 3, 2015
AN ACT TO UPDATE THE REFERENCE TO THE INTERNAL REVENUE CODE, TO DECOUPLE FROM CERTAIN PROVISIONS OF THE FEDERAL TAX INCREASE PREVENTION ACT OF 2014, TO MODIFY THE MOTOR FUELS TAX RATE, AND TO MAKE CERTAIN REDUCTIONS WITHIN THE DEPARTMENT OF TRANSPORTATION FOR THE 2014-2015 FISCAL YEAR.
Intro. by Rabon, Rucho, Tillman.

Status: Ch. SL 2015-2 (Senate Action) (Mar 31 2015)

SOG comments (2):

Identical Bill

Identical to H40, filed 2/3/15.

Title Change.

Committee substitute changes the short and long titles. The previous titles are found below:

IRC UPDATE.

AN ACT TO UPDATE THE REFERENCE TO THE INTERNAL REVENUE CODE AND TO DECOUPLE FROM CERTAIN PROVISIONS OF THE FEDERAL TAX INCREASE PREVENTION ACT OF 2014.

Bill History:

S 20/S.L. 2015-2

Bill Summaries:

  • Summary date: Apr 1 2015 - More information

    AN ACT TO UPDATE THE REFERENCE TO THE INTERNAL REVENUE CODE, TO DECOUPLE FROM CERTAIN PROVISIONS OF THE FEDERAL TAX INCREASE PREVENTION ACT OF 2014, TO MODIFY THE MOTOR FUELS TAX RATE, AND TO MAKE CERTAIN REDUCTIONS WITHIN THE DEPARTMENT OF TRANSPORTATION FOR THE 2014-2015 FISCAL YEAR. Enacted March 31, 2015. Effective March 31, 2015, except as otherwise provided.


  • Summary date: Mar 26 2015 - More information

    Conference report makes the following changes to the 5th edition.

    Part I

    Amends GS 105-153.5(a)(2)a., concerning calculating itemized deduction amounts to provide that a taxpayer electing to take the income exclusion under section 408(d)(8) of the Internal Revenue Code (Code) for taxable year 2014, for a qualified charitable distribution from an individual retirement plan of a person who has reached the age of 70 and 1/2, may deduct the amount that would have been allowed as a charitable deduction under section 170 of the Code if the taxpayer had not elected to to take the income exclusion.

    Provides that the following items that are not included in the taxpayer's adjusted gross income must be added to the taxpayer's adjusted gross income in calculating North Carolina taxable income, for taxable year 2014: (1) the amount excluded from the taxpayer's gross income for the discharge of qualified principal residence indebtedness under section 108 of the Code; (2) the amount of the taxpayer's deduction for qualified tuition and related expenses under section 222 of the Code; and (3) the amount excluded from the taxpayer's gross income for a qualified charitable distribution from an individual retirement plan by a person who is 70 and 1/2 years old under section 408(d)(8) of the Code.

    Part II

    Deletes all the provisions of subsections (a) and (b) of GS 105-449.80 and replaces them as follows. Amends GS 105-449.80 to set the motor fuel excise tax rate at a flat rate of thirty-five cents per gallon for the period beginning in January 1, 2016 and ending on June 30, 2016. Makes the flat rate thirty-four cents for the period from July 1, 2016and ending on December 31, 2016. Sets the flat rate at thirty-four cents per gallon, multiplied by a percentage, for the calendar year that begins on January 1, 2017. Provides that for calendar years beginning on or after January 1, 2018, the motor fuel excise tax rate is the amount for the preceding year, multiplied by a percentage. Provides that the percentage is 100% plus or minus the sum of the following: (1) the percentage change in population for the applicable calendar year as estimated under GS 143C-2-2, multiplied by 75%; (2) the annual percentage change in the Consumer Price Index for All Urban Consumers (CPI), multiplied by 25%. Defines CPI as it is used in this context. Requires the Secretary to notify affected taxpayers of the tax rate to be in effect for each calendar year (was, for each six-month period) beginning January 1.

    Makes conforming changes to GS 105-449.107(c) to reflect the changes to GS 105-449.80.

    Amends GS 150B-2(8a)j. to delete reference to the interest rate that applies to tax assessments under the variable component of the excise tax on motor fuel under GS 105-449.80, as not included as a "rule" as defined GS 150B-2(8a). Effective January 1, 2016.


  • Summary date: Mar 5 2015 - More information

    House amendment #3 makes the following changes to the fourth edition:

    Deletes proposed language in GS 105-153.5(d), which provides that North Carolina tax law does not conform to the extension of the federal qualified tuition and expenses deduction for tax year 2014.


  • Summary date: Mar 4 2015 - More information

    House amendment #1 makes the following changes to the 4th edition:

    Deletes proposed language in GS 105-153.5(a)(2)a that provided when calculating the itemized deduction amount for taxable year 2014, when electing to take the income exclusion under section 408(d)(8) of the revenue code for qualified charitable distribution from an individual retirement plan by a person 70 1/2 years old or older, that person can deduct the amount that would have been allowed as a charitable deduction under section 170 of the revenue code had the taxpayer not elected to take the income exclusion. 

    Deletes language in GS 105-153.5(d) that provided that NC revenue law does not conform with the IRC provision authorized in 2006 that allows taxpayers who are age 70 ½ or older to contribute up to $100,000 from their IRA to a charity tax free.


  • Summary date: Mar 3 2015 - More information

    House committee substitute makes the following changes to the 3rd edition:

    Amends GS 105-153.5, Modifications to adjusted gross income, deleting language that required taxpayers to add any amount paid toward qualified principal residence debt to the taxpayer's adjusted gross income.

    Provides that effective April 1, 2015, the motor fuel excise tax rate will be 36 cents a gallon (was, 35 cents).

    Amends GS 105-449.80(a), deleting some of the previous changes made to the subsection, now providing that the variable wholesale component of the fuel excise tax rate is the greater of 3 1/2 cents a gallon or 7 percent of the average wholesale price of motor fuel for the applicable base period (previously, was the greater of 17 1/2 cents a gallon or 9.9 percent of the average wholesale price of motor fuel for the applicable base period). Deletes changes made to the notification requirement for the Secretary to notify affected taxpayers. Effective January 1, 2016 (was, March 1, 2015)

    Makes various adjustments to the funding for and appropriations from the State Highway Trust Fund for the fiscal year ending June 30, 2015, including reductions to specified fund codes within the Highway Fund. 

    Reduces the reductions required to be made by the Director of the Budget and Secretary of Revenue, including adjusting the reduction of funds appropriated pursuant to GS 136-41.1 to $1,045,200 (previously appropriation was to be reduced by $2,575,560), and adjusting reductions to the Wildlife Resources Fund and the Shallow Draft Navigation Channel and Lake Dredging Fund to $16,750 (previously appropriation was to be reduced by $41,275). 

    Deletes provisions from the previous edition that required the Secretary of the Department of Transportation to reduce its workforce by eliminating 500 filled, full-time positions by March 1, 2015. Makes conforming changes. 

    Requires the Secretary of the Department of Transportation to eliminate 40 vacant positions (was, 50 vacant positions).

    Changes the effective date for sections of the bill that previously had an effective date of March 1, 2015, to becoming effective when the bill becomes law. 

     


  • Summary date: Feb 11 2015 - More information

    Senate amendment to the 2nd edition makes a technical change to Part II, Section 2.2, of this act regarding Motor Fuel Tax Changes, deleting an incorrect statutory reference to GS 105-449.108(c) and replacing it with GS 105-449.107(c).


  • Summary date: Feb 10 2015 - More information

    Senate committee substitute makes the following changes to the 1st edition:

    Changes the short and long titles.

    Amends GS 105-130.5B(c) and GS 105-153.6(c) to update and provide that for the purposes of those provisions, the definition of section 179 property has the same meaning as under section 179 of the federal internal revenue code as of January 1, 2015 (was, January 2, 2013).

    Amends GS 105-153.5, modifications to adjusted gross income, adding new language that provides that in calculating the itemize deduction amount for taxable year 2014, when electing to take the income exclusion under section 408(d)(8) of the revenue code for qualified charitable distribution from an individual retirement plan by a person 70 1/2 years older or older can deduct the amount that would have been allowed as a charitable deduction under section 170 of the revenue code had the taxpayer not elected to take the income exclusion. Also adds that in calculating the itemize deduction amount for taxable year 2014, the amount allowed as a deduction for interest paid or accrued during the taxable year under section 163(h) of the Code with respect to any qualified residence must not include the amount for mortgage insurance premiums treated as qualified residence interest. Deletes these same provisions from (d) of the statute, concerning decoupling adjustments. 

    Provides that the previous effective date, effective when bill becomes law, of the entire bill in the 1st edition is now the effective date for only Part 1 of the bill, regarding IRC updates. 

    Provides that effective March 1, 2015, notwithstanding GS 105-449.80, the motor fuel excise tax will be 35 cents a gallon. Expires January 1, 2016. 

    Amends GS 105-449.80 to provide that the variable wholesale component of the motor fuel excise tax is the greater of 17 1/2 cents a gallon or 9.9 percent of the average wholesale price of motor fuel for the applicable base period (previously, was the greater of 3 1/2 cent a gallon or 7 percent of the average wholesale price of motor fuel for applicable base period). Further provides that the base period for figuring the wholesale component of the motor fuel excise tax is a 12-month period ending September 30 (previously, there were two six-month base periods, one ending on September 30 and another that ended on March 31). Makes a conforming change to GS 105-449.108. Provides that the Secretary of Revenue (Secretary) sets the tax rate once, for the year beginning on January 1 in accordance with the wholesale price of the base period (previously, Secretary set the rate twice based on the two base periods). Makes conforming changes. Requires the Secretary to notify affected taxpayers of the tax rate for the calendar year beginning January 1. Effective March 1, 2015. 

    Makes adjustments to funding for and appropriations from the State Highway Trust Fund for fiscal year ending June 30, 2015, including decreasing funds for the Strategic Prioritization Funding Plan for Transportation Investments to $59,738,140 (was, $67,993,140), and providing that the total appropriations for the Highway Trust Fund will be $1,154,138,140 (was, $1,162,393,140). Further provides that estimated revenues pursuant to the Highway Trust Fund Availability Statement is $1,154,115,000 (was, $1,162,370,000), providing for a Total Highway Trust Fund Availability amount of $1,154,138,140 (was, $1,162,393,140). Makes adjustments to the funding for and appropriations from the Highway Fund, for fiscal year ending June 30, 2015, providing for a $24,765,000 reduction in funds for the operations of the Highway Fund pursuant to this bill, resulting in  a Total Highway Fund Appropriation amount of $1,959,377,286 (was, $1,959,377,286). Further adjusts the Revised Total Highway Fund Availability amount to $1,959,377,286 (was, $1,984,142,286) pursuant to reductions made in this bill.  Effective when the bill becomes law.

    Makes a 2.175 percent reduction in appropriations for the 2014-15 fiscal year to certified fund codes within the Highway Fund, with 36 listed exemptions, resulting in a total reduction of $9,092,616. Reduces appropriations to three specified fund codes by 1 percent, resulting in a total reduction of $4,687,630. Effective when the bill becomes law.

    Directs the Director of the Budget and the Secretary of Revenue to make the following reductions for the 2014-15 fiscal year: (1) a $2,575,560 reduction in funds appropriated pursuant to GS 136-41.1, concerning appropriations to municipalities; (2) a $41,275 reduction in total funds appropriated to the Wildlife Resources Fund; and (3) a $41,275 reduction in total funds appropriated to the Shallow Draft Navigation Channel and Lake Dredging Fund. Effective when the bill becomes law.

    Directs the Secretary of the Department of Transportation (DOT), by March 1, 2015, to eliminate 500 filled, full-time positions in the DOT resulting in a reduction of $6,250,000. Sets out the priority order for eliminating positions. Requires the Secretary of the DOT to provide notice as soon as practicable to any affected employee. Directs the Secretary of the DOT to eliminate a minimum of 50 vacant positions within the DOT in order to reach a total reduction of $2,076,644. Provides that the amount of funds generated by the reductions in this bill must be used to support the maintenance and operation of the DOT as well as purposes enumerated for the DOT in SL 2014-100. Effective when the bill becomes law.


  • Summary date: Feb 3 2015 - More information

    Under current law, North Carolina’s tax law tracks many of the provisions of the federal Internal Revenue Code (IRC) by reference to the IRC. 

    Amends GS 105-228.90(b)(1b) to update the reference to the IRC from December 31, 2013 to January 1, 2015, thereby including any provisions of the IRC enacted as of January 1, 2015 that became effective before or after that date.

    Decouples North Carolina’s tax law from extensions under the federal Tax Increase Prevention Act of 2014 (TIPA) for the 2014 tax year. Amends GS 105-130.5B(c) and GS 105-153.6(c), regarding the adjustments made when the state decouples from federal accelerated depreciation and expensing, to provide that for the 2014 tax year, North Carolina tax law sets the deduction and investment limits of the enhanced section 179 expensing provision at $25,000 and $200,000. 

    Amends GS 105-153.5, enacting new subsection (d) which provides that North Carolina tax law does not conform to the extension of: (1) the income exclusion for the discharge of qualified residence indebtedness as provided under the IRC; (2) the deduction for mortgage insurance premiums as interest for tax year 2014; and (3) the federal qualified tuition and expenses deduction for tax year 2014. Additionally, this act provides that North Carolina’s tax law does not conform with the IRC provision authorized in 2006 that allows taxpayers who are age 70 ½ or older to contribute up to $100,000 from their IRA to a charity tax free. Effective for taxable years beginning on or after January 1, 2014.

    Provides that any amendments to the IRC enacted after December 31, 2013, that increase North Carolina taxable income for the 2014 taxable year, become effective for taxable years beginning on or after January 1, 2015.

     


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