Bill Summary for H 1180 (2011-2012)
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TO IMPOSE A STATE TAX ON THE PRIVILEGE OF OPERATING A VIDEO SWEEPSTAKES ESTABLISHMENT IN THIS STATE AND USE THE PROCEEDS FROM THE STATE TAX FOR LOCAL LAW ENFORCEMENT AND PUBLIC EDUCATION AND TO AUTHORIZE COUNTIES AND CITIES TO IMPOSE A TAX ON THE PRIVILEGE OF OPERATING A VIDEO SWEEPSTAKES ESTABLISHMENT.Intro. by Owens, Spear, Collins.
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Enacts new Article 2E, Video Sweepstakes Entertainment Tax, to GS Chapter 105 to impose a licensing requirement and tax on video sweepstakes establishments, an excise tax on each video sweepstakes machine or device, and a tax on gross receipts. Requires a person operating a video sweepstakes establishment to pay an annual license tax of $2,000 for the privilege of operating the establishment. Sets out the requirements for license applicants and authorizes the Secretary of Revenue (Secretary) to deny issuance of a license for any of the detailed reasons. Authorizes the Secretary to cancel a license under certain circumstances and requires notice and an opportunity for a hearing when a license is summarily cancelled. Requires applicants to file a bond or an irrevocable letter of credit in an amount as specified. Imposes an annual excise tax of $1,000 on each video sweepstakes machine or device before such machine or device is put into operation. Imposes a 4% tax on the taxable gross receipts, as defined, from operating a video sweepstakes machine or device.
Allows the distribution of up to 6% of the tax proceeds from the license tax and the excise tax to be distributed to local law enforcement agencies on the following schedule: (1) 4% to county sheriff’s departments on a per capita basis and (2) 2% collected from video sweepstakes establishments to city police departments on a per capita basis. Requires the remaining tax proceeds to be credited to the General Fund and appropriated for public education. Authorizes a city or county to impose an annual license tax of $1,000 to a video sweepstakes establishment operating in that local government and to impose an annual excise tax of $500 per machine. States that the revenue distributed is local revenue and not a state expenditure. Makes a conforming change to add subsection (b1) to GS 160A-211.
Specifies that Article 9 (General Administration; penalties and remedies) applies to proposed Article 2E. States that the proposed article only authorizes the operation of video sweepstakes machines and devices that associate a prize with the entry of a sweepstakes, and (1) a person is eligible to win a prize without purchasing an item or service or the right to possess, use or obtain value from any item or service or (2) the person is eligible to win a prize due to purchasing (at fair market value) an item or service or the right to possess, use, or obtain value from any item or service.
Makes a conforming change to repeal GS 14-306.4. Applies to video sweepstakes establishments operated on or after January 1, 2013.