Bill Summary for S 557 (2019-2020)
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AN ACT TO INCREASE THE STANDARD DEDUCTION, TO EXPAND THE DEFINITION OF HOLDING COMPANY FOR FRANCHISE TAX PURPOSES, TO IMPLEMENT MARKET-BASED SOURCING FOR MULTISTATE INCOME TAX APPORTIONMENT, TO REQUIRE CERTAIN MARKETPLACE FACILITATORS TO COLLECT SALES TAX, TO DIRECT REVENUE LAWS TO STUDY CERTAIN TAX SUNSET PROVISIONS, AND TO MAKE TECHNICAL CORRECTIONS.Intro. by Krawiec, Rabon, Lowe.
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Identical to H 537, filed 4/2/19.
Amends GS 105-187.1 which sets forth defined terms for Article 5A, NC Highway Use Tax. Adds the terms limited possession commitment, vehicle sharing service, and vehicle subscription. Amends long-term lease or rental to specify that the term applies to agreements concerning a single motor vehicle. Amends retailer to include a person engaged in the business of offering vehicle subscriptions for motor vehicles. Amends short-term lease or rental to mean a lease or rental of a motor vehicle or motor vehicles, including a vehicle sharing service, that is not a long-term lease or rental or a vehicle subscription.
Amends GS 105-187.5 to provide for a retailer to elect an alternate tax when applying for a certificate of title for a motor vehicle purchased for a limited possession commitments (was, for lease or rental), defined as long-term lease or rental, short-term lease or rental, and vehicle subscriptions. Defines vehicle subscription to mean a written agreement that grants a person the right to use and exchange motor vehicles owned by the person offering the agreement upon payment of a subscription fee, excluding a vehicle sharing service, which is defined as a service for which a person pays a membership fee for the right to use a motor vehicle(s) upon payment of an additional time-based or mileage-based fee. Makes conforming changes to the statute to refer to limited possession commitments rather than lease or rental. Sets tax rates for the gross receipts of vehicle subscriptions at 5% and maintains the current tax rates for short-term leases or rentals (8%) and long-term leases or rentals (3%).
Amends GS 105-187.9 to require $10 million of the taxes collected at the rate of 5% and 8% under Article 5A (was only those collected at 8%) to be credited annually to the Highway Fund, with the remainder credited to the General Fund. Maintains the provision requiring taxes collected at the rate of 3% to be credited to the Highway Trust Fund.
Amends GS 105-550 (concerning Regional Transit Authority vehicle rental tax) and GS 153A-156 (concerning county gross receipts tax on short-term leases or rentals) to amend the definitions of short-term lease or rental in each statute to now refer to the definition in GS 105-187.1, as amended.
Applies to vehicle subscription agreements entered into on or after October 1, 2019.