A BILL TO BE ENTITLED AN ACT TO MAKE TECHNICAL AND CLARIFYING CHANGES TO VARIOUS REVENUE LAWS; TO MODIFY THE RENEWABLE ENERGY TAX CREDIT; AND TO MODIFY AND EXTEND THE HISTORIC REHABILITATION TAX CREDIT.
Senate committee substitute makes the following changes to the 1st edition:
Amends Section 7.2(a) and 7.3 of SL 2014-3, concerning retailer-contractors, providing clarification that the act does not affect any interpretation of a statute which is the subject of a State tax audit for taxable years beginning before January 1, 2015, as well as clarifying that the changes that are effective January 1, 2015, apply to withdrawals of items from inventory for contracts entered into on or after that date.
Amends Section 8.1(c) of SL 2014-3, effective June 1, 2014, clarifying that a retailer of a rental of a private residence, cottage, or similar accommodation, which is rented for fewer than 15 days in a calendar year and listed with a real estate broker or agent, is liable for any over-collection of sales tax or occupancy tax for any such rental that is occupied or available to be occupied for nights beginning June 14, 2012, and ending June 30, 2013, and must remit the tax collected. Also provides that a retailer is not liable for an undercollection of sales tax or occupancy tax for such rental which is occupied or available to be occupied between June 1, 2014, and June 30, 2014, if a good-faith effort to comply with the law was made. Deletes language which states the section applied during June 14, 2012 and July 1, 2014.
Repeals Section 14.26 of SL 2014-3, concerning the definition of an income year.
Amends GS 105-113.35(d), effective June 1, 2015, to provide that a manufacturer who ships vapor products to either a wholesale dealer or retail dealer can apply to the Secretary of Revenue to be relieved of paying the tax imposed by this section on those vapor products.
Amends GS 105-129.16A, concerning tax credits for investing in renewable energy property, providing that a taxpayer that has constructed, purchased, or leased renewable energy property is allowed a credit equal to 35 percent of the cost of the property if the property is placed in service in North Carolina during the taxable year.
Amends Section 1.1(a) of SL 2014-3, concerning federal taxable income deductions, making a clarifying change.
Amends GS 105-134.6A, concerning definitions for provisions concerning the decoupling from federal accelerated depreciation, making organizational changes and setting out and defining the term owner in a transferor. Effective for taxable years beginning on or after January 1, 2013.
Amends GS 105-153.6, concerning definitions for provisions concerning the decoupling from federal accelerated depreciation, making organizational changes and setting out and defining the term owner in a transferor. Effective for taxable years beginning on or after January 1, 2014.
Amends GS 105-153.4, concerning NC taxable income, making technical corrections to statutory references. Clarifies apportioning of partnership income to multiple states. Effective on or after January 1, 2014.
Amends GS 105-153.5, adding a provision that requires S Corporations subject to Part 1A, partnerships, and estates and trusts subject to Part 3 to add back state income tax deducted from federal income for state income tax purposes.
Provides that the Secretary of Revenue cannot impose interest with respect to an underpayment of income tax to the extent the underpayment was created or increased by the changes in Section 2.2 of SL 2014-3. Provides that a withholding agent is not liable for the amount of tax the agent fails to withhold to the extent the amount of tax not withheld was created or increased by the the changes made in Section 2.2 of SL 2014-3. Effective when the section becomes law and applies to taxable years beginning on or after January 1, 2014, and before January 1, 2015, and to payroll periods beginning on or after January 1, 2014, and before January 1, 2015.
Amends GS 105-164.3(35), making technical changes and adding new language that provides that a person, other than a facilitator, required to collect the tax levied under GS 105-164.4(a) is defined as a retailer for the purposes of GS Chapter 105, Article 5.
Amends GS 105-164.4G, clarifying that the sale at retail and the use, storage, or consumption in North Carolina of specified gross receipts from an entertainment activity admission charge are exempt from the tax imposed by GS Chapter 105, Article 5 (previously, did not include the sale at retail and the use, storage, or consumption language). Clarifies that an admission charge (was, admission) to an entertainment activity is sourced to the location where admission to the activity may be gained by person.
Amends GS 105-164.13, Retail sales and use tax, adding piped natural gas to exemptions detailed in GS 105-164.13 (8a), (10), and (57). Effective July 1, 2014.
Deletes language in GS 105-164.13(62) that excluded the tax exemption from applying to an item used to maintain or repair tangible personal property pursuant to a service contract exempt from tax under GS 105-164.4I(b). Effective October 1, 2014.
Amends GS 105-187.52(c), exemptions, clarifying that the tax exemption in GS 105-164.13(62) does apply to an item used to maintain tangible personal property under a service contract exempt from tax under GS 105-164.4I(b)(4). However, adds clarifying language that states that the exemption does apply to an item used pursuant to a service contract that meets the definition of a service contract as defined in GS 105-164.3(38b) that was sold before January 1, 2014, but effective on or after January 1, 2014.
Makes technical changes.
Amends GS 105-164.13E, as amended by SL 2014-3, to clarify that the exemption certificate for qualifying farmers under this section expires when the qualifying farmer (1) fails to meet the income threshold requirements for three consecutive taxable years or (2) ceases to engage in farming operations, whichever comes first. Adds piped natural gas to the list of tangible personal property, digital property, and services that are exempt from sales and use tax if purchased by the qualifying farmer for use in farming operations. Under subsection (b) of GS 105-164.13E, current law provides that a person who does not meet the definition for a qualifying farmer may apply to the Department of Revenue (Department) for a conditional exemption certificate under GS 105-164.28A. Clarifies that in order to qualify for a conditional exemption certificate, the person must be engaged in farming operations. Defines the term taxable year as having the same meaning as defined in GS 105-153.3.
Amends GS 105-164.16A, as enacted by SL 2014-3, creating a subsection (a) and adding a new subsection (b). Amends subsection (a) to provide a retailer (was, taxpayer) that offers (was, that offers to sell) a prepaid meal plan subject to the tax imposed by GS 105-164.4 an option as to how the sales tax will be remitted to the Secretary of Revenue (Secretary) and a return filed under GS 105-164.16. Provides that when a retailer enters into an agreement with a food service contractor who agrees to provide food under a prepaid meal plan, and the food service contractor is also a retailer under this Article, then the retailer may include in the agreement that the food service contractor is liable for reporting (was, collecting) and remitting the sales tax due on the gross receipts from the prepaid meal plan on the behalf of the retailer. Directs that tax payments received by a food service contractor from a retailer are held in trust by the food service contractor for remittance to the Secretary. Requires a food service contractor to remit the amount of a tax payment received from a retailer to the Secretary. Provides that a food service contractor is not liable for tax due but not received from a retailer. Makes a retailer liable for the tax due on the gross receipts derived from a prepaid meal plan if the retailer fails to send the tax due to the food service contractor. Enacts new subsection (b) of GS 105-164.16A to add provisions regarding the basis of reporting gross receipts derived from a prepaid meal plan.
Amends Section 4.1(g) of SL 2014-3 to provide that this Part applies to gross receipts derived from a prepaid meal plan sold or billed before July 1, 2014, if the plan is not authorized for use or available to the person until on or after August 1, 2014.
Amends GS 105-164.20 to require a retailer of electricity, telecommunications service, piped natural gas, and prepaid meal plans to report its sales on an accrual basis (was, retailers of electricity and telecommunications service must report sales on an accrual basis) for the purposes of this Article. Provides that the tax on the sales price or gross receipts derived from the sale accrues when the retailer bills its customer for the sale or gross receipts (was, for the sale).
Amends GS 105-164.29(a), as amended by Section 14.9(b) of SL 2014-3, to provide that a certificate of registration must be signed by a manager, member, or company official (was, partner), if the owner is a limited liability company (was, if the owner is an association, a partnership, or a limited liability company). Provides that if the owner is a partnership, the certificate of registration must be signed by a manager, member, or partner.
Amends GS 105-241.6(b)(5) to make clarifying and organizational changes regarding exceptions to the general statute of limitations for obtaining a refund of an overpayment in the case of a contingent event.
Amends GS 105-338(c), as amended by Section 11.1(e) of SL 2014-3, regarding the allocation of appraised valuation of public service property among local taxing units. Deletes the appraised valuation of the tangible personal property of a mobile telecommunications company from the tangible personal property that is appraised under the provisions of this subsection. Instead provides for the appraised valuations of the tangible personal property of mobile telecommunications companies pursuant to GS 105-339 as amended by Section 11.1(f) of SL 2014-3. Effective for taxes imposed for taxable years beginning on or after July 1, 2015. Makes a technical change.
Repeals Section 11.1(g) of SL 2014-3 regarding certification of appraised valuations of mobile telecommunications companies.
Enacts new subsection (b) to GS 160A-206. Prohibits a city from imposing a license, franchise, or privilege tax on a person engaged in any of the following businesses: (1) supplying piped natural gas, (2) providing telecommunications service taxed under GS 105-164.4(a)(4c), (3) Providing video programming taxed under GS 105-164.4(a)(6), and (4) providing electricity. Provides that these businesses are either subject to sales tax at the combined general rate for which the city receives a share of the tax revenue or they are subject to the local sales tax. Enacts new subsection (b) to GS 153A-146 to prohibit a county from imposing a license, franchise, or privilege tax on a person engaged in any of the businesses as listed in new subsection (b) of GS 160A-206.
Clarifies that the Department of Revenue can draw the funds needed from sales tax to make distributions of the repealed franchise tax on electricity and excise tax on piped natural gas, specifically the September 15, 2014, distributions, for the calendar quarter that begins April 1, 2014, to cities under GS 105-116.1 and 105-187.44.
Provides that except as otherwise provided, this act is effective when it becomes law.
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