AN ACT TO MAKE VARIOUS SALES AND USE TAX CHANGES, AS RECOMMENDED BY THE REVENUE LAWS STUDY COMMITTEE. SL 2020-6. Enacted June 5, 2020. Effective June 5, 2020, except as otherwise provided.
Summary date: Jun 8 2020 - View Summary
Summary date: May 26 2020 - View Summary
Senate amendment to the 2nd edition adds the following.
Enacts GS 105-244.4A to bar the Department of Revenue (Department) from taking any action to assess a person for an sales and use tax due for the filing period beginning October 1, 2019, and ending prior to August 1, 2020, with respect to the retail sale of digital audio work or digital audiovisual that either consists of continuing education instruction approved by an occupational licensing board or consists of professional development instruction for school board members, administrators, or staff. Excludes from the grace period those persons who received specific written advice from the Department Secretary for transactions at issue for the laws in effect for the applicable period or to person who collected tax and failed to remit it to the Department. Effective on the date the act becomes law.
Summary date: May 19 2020 - View Summary
House committee substitute to the 1st edition makes the following changes.
Amends GS 105-164.4J to establish a grace period for filings beginning on or after February 1, 2020, and ending prior to October 1, 2020, to prohibit the Department of Revenue from taking any action to assess any tax due during the grace period for a person who sells: (1) tangible personal property on behalf of the owner of the tangible personal property, or the owner's estate, whether by auction or through the pricing of items, and the sale was conducted at the owner's home or farm; or (2) fixtures and equipment held for use in operating a retail or wholesale business on behalf of a business, whether by auction or through the pricing of items, and the sale is conducted at the business location (was, limited to a person who conducted a sale of tangible personal property on behalf of the property owner, for which the person was compensated, that was conducted at the owner’s home or farm, regardless of how the sale was conducted). Adds retail sales of inventory that was held for resale to those excluded.
Allows a large fulfillment facility a refund of all state and local sales and use tax paid by the large fulfillment facility, or paid by a contractor or subcontractor on the large fulfillment facility's behalf (previously did not include those paid by a contractor or subcontractor), for purchases of items eligible for exemption under amended GS 105-164.13, if the purchase was made on or after April 1, 2020, but before July 1, 2020. No longer specifically bars refunds after this date.
Amends the definition of digital audio work in GS 105-164.3 that applies to Article 5 concerning sales and use tax, by requiring that the work result from the fixation of a series of sounds that is transferred electronically (was, just a series of sounds transferred electronically). Also defines transferred electronically as obtained by the purchaser by means other than tangible storage media including delivered or accessed electronically.
Summary date: May 14 2020 - View Summary
Identical to S 718, filed 5/13/20.
Amends GS 105-164.13E to modify and add to items that may be exempt from sales and use tax by qualified farmers. Exemptions now include (1) baby chicks and poults, without the qualification that the baby chicks and poults be sold for commercial poultry or egg production, and (2) livestock, which previously were not included in the exemptions. Effective July 1, 2020, and applies to sales occurring on or after that date.
Adds livestock to the defined terms set out in GS 105-164.3 as it applies to sales and use tax under Article 5. Defines the term to include cattle, sheep, goats, swine, horses, or mules. Effective July 1, 2020, and applies to sales occurring on or after that date.
Amends GS 105-237.1, which authorizes the Secretary of Revenue (Secretary) to compromise a taxpayer’s liability under the general tax collection law when the Secretary makes one or more of eight specified findings and also determines that the compromise is in the best interest of the State. Adds to the specified findings to extend this authority to include when the Secretary finds that the assessment is for sales tax an auctioneer licensed in the State failed to collect for the sale of livestock at auction. Adds further required predeterminations, including that the taxpayer made a good faith effort to comply with the tax laws, including being registered as a retailer on or before July 1, 2020. Specifies that the new provisions apply to assessments for any tax due for a reporting period ending prior to July 1, 2020. Excludes persons that received specific written advice from the Secretary for the transactions at issue.
Amends GS 105-164.4J to establish a grace period for filings beginning on or after February 1, 2020, and ending prior to October 1, 2020, to prohibit the Department of Revenue from taking any action to assess any tax due during the grace period for a person who conducted a sale of tangible personal property on behalf of the property owner, for which the person was compensated, that was conducted at the owner’s home or farm, regardless of how the sale was conducted. Excludes persons who received specific written advice from the Secretary for the transactions at issue or persons who collected tax and failed to remit it to the Department of Revenue.
Amends GS 105-164.13 concerning identified agricultural sales and use tax exemptions. Amends the exemption set out for sales of equipment, accessories, attachments or repair parts for equipment that are sold to a large fulfillment facility or used in the facility for distribution, so long as the sales do not include electricity. Expands the exemption to also include equipment, accessories, attachments or repair parts for equipment that are sold to a contractor or subcontractor if the purchase is for the use in the performance of a contract with the large fulfillment facility, or the equipment is used at the facility for baling previously used packaging for resale, federally required sanitizing, or material handling. Effective July 1, 2020, and applies to sales occurring on or after that date.
Allows a refund for large fulfillment facilities that are eligible taxpayers of State and local sales and use taxes paid on purchases eligible for exemption under amended GS 105-164.13 if the purchases were made on or after April 1, 2020, but before July 1, 2020. Details refund request procedures and requirements, and requires the requests to be made on or after July 1, 2020, and before October 1, 2020. Bars refunds after this date and deems those taxes that are not refunded not an overpayment and not subject to interest.
Expands the sales and use tax exemptions set out in GS 105-164.13 to exempt from retail sales and use tax (1) sales of a digital audio work or a digital audiovisual work that is a qualifying education expense under specified State law to the operator of a home school, and (2) sales of a digital audio work or digital audiovisual work that consists of nontaxable service content when the electronic transfer of the work occurs contemporaneously with the provision of the nontaxable service in real-time.
Amends and adds to the definitions set out in GS 105-164.3 that apply to Article 5 concerning sales and use tax. Adds the term additional digital goods, defined to mean a magazine, newspaper, newsletter, report or other publication, a photograph, or a greeting card, if transferred electronically. Adds the term digital book, defined to mean a work that is generally recognized in the ordinary and usual sense as a book that is transferred electronically. Adds the term educational service, defined to mean the delivery of instruction or training, whether provided in real-time, on-demand, or at another set time, by or on behalf of a qualifying entity where at least one of four criteria applies, including: the instruction or training is part of an enrolled student’s curriculum or encompassed within the institution’s accreditation or prepares enrolled students for gainful employment in a recognized occupation, or the participant is evaluated by an instructor or connected to the presenter or instructor by the internet or other networks that provide live interaction. Adds the term qualifying educational entity, defined to mean an elementary or secondary school or an institution of higher education, as those terms are defined by specified USC sections as of January 1, 2020. Finally, adds the defined term specified digital products, defined to mean digital audio works, digital audiovisual works, and digital books. Rewrites the definition for certain digital property, now defined to mean specified digital products and additional digital goods, as those terms are defined; excludes an information service or an education service. Modifies terminology to now define digital audio work and digital audiovisual work, rather than audio work and audiovisual work, and adds to the definition of each to specify that the terms are limited to work transferred electronically.
Authorizes the Revisor of Statutes to make organizational, technical and conforming changes.
Applies to sales occurring on or after October 1, 2019.