A BILL TO BE ENTITLED AN ACT TO AMEND THE REVENUE LAWS, AS RECOMMENDED BY THE REVENUE LAWS STUDY COMMITTEE.
Senate amendment #2 makes the following changes to the 4th edition.
Adds a new subsection (b) to GS 105-164.13E and makes an organizational change labeling the existing content of this section as subsection (a). Makes additional technical corrections, identifying subsection (a) with the title "Exemption" and subsection (b) as "Conditional Exemption." Rewrites the title of GS 105-164.13E as "Exemption for Farmers" (was, "Exemption for Qualifying Farmers").Clarifies the meaning of the term "farming operations" as it is used in this section.
Subsection (b) identifies a conditional exemption which is available to a person who doesn't meet the definition of a qualifying farmer in subsection (a). Provides that a person not meeting the definition of a qualifying farmer may apply to the Department of Agriculture (Department) for a conditional exemption certificate under GS 105-164.28A. Allows a person with a conditional exemption certificate to purchase items that are exempt from the sales and use tax to the same extent as a qualifying farmer under subsection (a) of this statute. Provides that to receive a conditional exemption certificate, the person must certify his or her intent (1) to engage in farming operations as that term is defined in subsection (a) of this section and (2) to file in a timely manner state and federal income tax returns that reflect income and expenses incurred from farming operations during the taxable years that the conditional exemption certificate (certificate) applies.
Designates a certificate issued under this section as valid for the taxable year in which it is issued and the following two taxable years provided that the person to whom the certificate is issued provides copies of applicable state and federal income tax returns to the Department within 90 days following the end of each taxable year covered by the certificate.
Imposes the following restrictions on a certificate issued under this subsection: (1) it may not be renewed or extended beyond the original three-year period and (2) the Department may not issue the certificate to a person who has a conditional exemption certificate issued under this subsection during the previous 15 taxable years.
Requires that a person who purchases items with a conditional exemption certificate has to maintain documentation of the items purchased and copies of state and federal income tax returns for three years following the expiration of the certificate. Permits the Secretary to require a person with a certificate to provide any information requested in a timely manner by the Secretary to be used to verify that the person has met the requirements of this section.Imposes penalties on a person who fails to provide the requested information in a timely manner or fails to meet the requirements of this subsection. Makes technical and conforming changes to GS 105-164.28A.
Makes conforming changes to GS 105-236(a)(5a) regarding civil penalties for the misuse of an exemption certificate.
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