Bill Summaries: S 763 REVENUE LAWS TECH. CHANGES AND OTHER CHANGES.

Tracking:
  • Summary date: Aug 1 2014 - More information

    House amendments to the 5th edition, as amended, make the following changes.

    Amendment #3 amends GS 143B-437.012, concerning eligibility for a grant from The Job Maintenance and Capital Development Fund, adding new conditions for eligibility. New conditions include that the business be a major employer, with the project for which funds are requested having to be located in a development tier one area at the time the business applies for the grant. Also new, a business can be eligible for a grant if it is a large manufacturing employer that is converting its manufacturing process to change the product it manufactures or is investing in its process by enhancing pollution controls or transitioning the manufacturing process from using coal to using natural gas for the purpose of becoming more energy efficient or reducing emissions, as well as being certified by the Department of Commerce that it has invested or plans to invest at least $50 million of private funds (was, $65 million) in improvements to real property and additions to tangible personal property within a five-year period (was, three-year).  Deletes a requirement that the large manufacturing business must be located in a tier one development area in order to be eligible for a grant.  However, sets out that to be eligible, certain employment levels must be met and maintained depending on the category of the development area the business is located in.  The business can be located in either a tier one or tier two development area, with different employment requirements depending on the tier. Tier one location would roughly require that 320 full-time employees be employed by the project subject to the grant with tier two location requiring 800 full-time employees if the tier two area has a population of less than 60,000 as of July 1, 2013.

    Establishes that the Department of Commerce cannot enter into more than five agreements/grants, with total aggregate cost not to exceed $79 million (was, $69 million).

    Effective July 1, 2014.

    Amendment #5 repeals GS 143B-131.7, which required the Attorney General to assign legal counsel to the Roanoke Island Commission.

    Amendment #6 amends GS 74F-16 to provide that GS Chapter 74F (Locksmith Licensing Act) does not apply to a merchant, or retail or hardware store if it: (1) is lawfully duplicating keys or installing, servicing, repairing, rebuilding, reprogramming, rekeying, or maintaining locks in the normal course of its business; (2) maintains a physical location in the state; (3) maintains a sales and use tax permit; and (4) does not represent itself as a locksmith.

    Provides that if Senate Bill 734 (Regulatory Reform Act of 2014) becomes law, Section 2.5 (excluding from the Locksmith Licensing Act a merchant, or retail or hardware store, when the merchant or store does not purport to be a locksmith and lawfully (1) rekeys a lock at the time of sale of the lock; (2) duplicates a key, including a transponder type key that requires programming; or (3) installs a lock on a door if both the door and lock were purchased from the same merchant) is repealed.


  • Summary date: Jul 31 2014 - More information

    House amendment makes the following changes to the 4th edition.

    Amends GS 105-129-35 to clarify that the federal income tax credit to a taxpayer for rehabilitating an income-producing historic structure is equal to the sum of the applicable amounts indicated as to the (1) base amount, (2) development tier bonus, and (3) targeted investment bonus.

    Effective for taxable years beginning on or after January 1, 2015, makes identical changes, as follows, to GS 105-130.47 (Corporation Income Tax, Article 4, Part 1, GS Chapter 105) and GS 105-151.29 (Individual Income Tax, Article 4, Part 2, GS Chapter 105) regarding the tax credit for qualifying expenses of a production company. Caps the total amount of all tax credits allowed to taxpayers under GS 105-130.47 or GS 105-151.29 for qualifying expenses in a tax year at a maximum of $40 million. Directs the Secretary of Revenue (Secretary) to calculate the total amount of all tax credits claimed under GS 105-130.47 and GS 105-151.29. Provides that if the total amount of all the tax credits claimed exceeds $40 million, the Secretary must apportion the tax credits claimed by allocating the maximum tax credit amount in proportion to the size of the credit claimed by each taxpayer. Declares that the Secretary's allocations are final.

    Provides that subject to the tax credit cap, a taxpayer that meets the specified requirements to qualify for the tax credit is allowed a credit equal to 22.5% (was, 25%) of the taxpayer's qualifying expenses. Specifies that the applicable requirements are that the taxpayer: (1) files a timely return and does not apply for an extension of time to file a return; (2) is a production company; (3) has qualifying expenses of at least $250,000 with respect to a production; and (4) the taxpayer's taxable year is a calendar year.

    Requires that a taxpayer claiming a credit underGS 105-130.47 or GS 105-151.29 for productions that have a production credit must acknowledge all of the following in the production credits, in addition to acknowledging the NC Film Office and the regional film office responsible for the geographic area where the filming occurred (current law): (1) the identity of each location in the state in which the filming of the production occurred; and (2) the phrase "Filmed in North Carolina" and a logo provided by the NC Film Office.

    Includes sunset provisions, which repealGS 105-130.47 and GS 105-151.29 for qualifying expenses occurring on or after January 1, 2016 (was, January 1, 2015).

    Calls for the 2014-15 Work Plan for the Program Evaluation Division (Division) of the General Assembly to include a study to evaluate the income tax credits for qualifying expenses of a production company provided in GS Chapter 105. Directs the Division toconsiderthefollowingin its study: (1) the return on investment of the credit to the state, (2) methods to increase the benefit to the state resulting from the credit, and (3) programs in other states, best practices in other states, and methods used by other stated to compete for film investment in the state. Requires the Division to submit its findings and recommendations to the the Joint Legislative Program Evaluation Oversight Committee and revenue Laws Study Committee on or before February 1, 2016. Effective when the act becomes law.


  • Summary date: Jul 31 2014 - More information

    House committee substitute makes the following changes to the 3rd edition:

    Changes the long title. 

    Deletes proposed changes to GS 105-130.3C, concerning the triggering of the corporate income tax rate reduction.

    Deletes proposed GS 105-164.13(64), which provided for a tax exemption for 50 percent of the sales price of a modular home or a manufactured home, including all accessories attached when delivered to the purchaser. 

     


  • Summary date: Jul 30 2014 - More information

    House committee substitute makes the following changes to the 2nd edition:

    Changes the long title.

    Amends GS 105-164.13(10) to clarify that the exemption for retail sales and use tax for fuel and piped natural gas used in laundering or pressing and cleaning does not apply to electricity.

    Amends GS 105-130.3C to clarify the term "Net General Fund tax collected for a fiscal year" for the purpose of triggering the corporate income tax rate reduction. Provides that the term refers to the amount of net revenue reported by the Department of Revenue's June Statement of Collection as "Total General Fund Revenue" for the 12-month period that ended the previous June 30, less any large one-time, nonrecurring revenue as reported to the Fiscal Research Division and adjusted by any changes in net collections resulting from the suspension or termination of transfers out of General Fund tax collections. Makes technical and clarifying changes. 

    Amends GS 105-153.3 and 105-153.5(a)(1), to add and define the term surviving spouse for the purposes of the Individual Income Tax Act and to add that term to the standard deduction amount table in GS 105-153.5(a)(1).  Effective for taxable years beginning on or after January 1, 2014. 

    Amends GS 105-134.1 and 105-134.6(a2) to add and define surviving spouse and add it to the standard deduction table found in GS 105-134.6(a2). Effective retroactively for taxable years beginning on or after January 1, 2012, and before January 1, 2014. 

    Amends GS 105-164.13, concerning retail sales and use tax, to provide that 50 percent of the sales price of a modular home or a manufactured home, including all accessories attached when delivered to the purchaser, is exempted from the retail sales and use tax. Effective September 1, 2014, applying to sales made on or after that date. 

    Amends GS 105-164.13B(a)(4) to delete a reference to a previously repealed statute. Adds language defining, for the purpose of the subdivision, a related person, meaning a person described in one of the relationships set out in section 267(b) or 707(b) of the Tax Code. 

    Amends GS 105-129.16A, concerning credit for investing in renewable energy property, creating a delayed sunset for taxpayers that have incurred more than 5 percent of the cost of constructing renewable energy property on or before January 1, 2016, extending the tax credit for such property until July 1, 2017 (previous sunset for tax credit was July 1, 2016). Makes conforming changes. 

    Amends GS Chapter 105, Article 3D, to rename the article the "Historic Rehabilitation Investment Program." Amends GS 105-129.35 to provide for a tax credit equal to the sum of certain specified percentages of qualified rehabilitation expenditures. Sets out three different allowable percentages: (1) tax credit worth 15 percent of qualified rehabilitation expenses up to $10 million and 10 percent for expenses between $10 million and $20 million, (2) a tax credit equal to 5 percent of qualified rehabilitation expenses not to exceed $20 million if the certified historic structure is in a development tier one or tier two area, and (3) a tax credit equal to 5 percent of qualified rehabilitation expenses not to exceed $20 million if the certified historic structure is in an eligible targeted investment site. Deletes language which provided for a 40 percent tax credit for rehabilitation of closed state training schools for juvenile offenders. Provides that a claim for a targeted investment site tax credit must include a copy of the eligibility certification previously submitted to the Secretary of Revenue. Adds definitions for use in the section, including development tier area, eligibility certification, and eligible targeted investment site. Amends the definition of State Historic Preservation Officer. Makes technical and conforming changes.

    Amends GS 105-129.36 to set out two different allowable percentages of tax credits for the rehabilitation of a non-income-producing historic structure: (1) 20 percent of rehabilitation expenses incurred up to $200,000 over any 24-month period per discrete property parcel with an assessed value equal to or less than the statewide median home value and (2) 15 percent of rehabilitation expenses up to $200,00 over any 24-month period per discrete property parcel with an assessed value greater than the statewide median home value but equal to or less than 150 percent of the statewide median home value if the expenses exceed $10,000 within the 24 months and have not been on a single state-certified historic property for more than 5 years. Deletes language which provided for a 40 percent tax credit for rehabilitation of closed state training schools for juvenile offenders.  Adds definitions for use in the section, including assessed value and statewide median home value. Amends the definition of rehabilitation expenses to clarify six expenses that are considered rehabilitation expenses, including expenses incurred for the exterior, structural elements, and heating or ventilation systems. Makes technical and conforming changes.

    Amends GS 105-129.36A, rules and fees for the NC Historical Commission, making a technical change. 

    Amends GS 105-129.37 concerning tax credited and credit limitations, providing that the credits provided for in this Article are allowed against the imposed franchise tax and the gross premiums tax imposed in GS Chapter 105, Article 8B in addition to income taxes levied in GS Chapter 105, Article 4. Specifies limitations requirements on taking the credits. Provides that any unused portion of a credit allowed under these provisions can be carried forward for the next nine years. Deletes language that required a tax credit to be taken over five equal installments over five years. Makes technical and conforming changes. 

    Amends GS 105-129.38, renaming the section "Report; tracking." Adds language that requires the Department of Revenue to track the credits allowed to each taxpayer by use of a project number generated by the State Historic Preservation Office. Also requires the Department of Revenue to develop a method for reporting the project number on NC annual tax returns. 

    Requires the Department of Revenue to include in the economic incentives report (1) the total amount of tax credits awarded and the total amount of tax credits claimed against current taxes, by type of tax, during the relevant tax year and (2) the total amount of tax credits carried forward, by type of tax. 

    Amends GS 105-129.39, the sunset provision for this Article, extending the sunset date to January 1, 2020 (was, January 1, 2015).

    Provides that all of the above provisions concerning historical rehabilitation tax credits become effective January 1, 2015, applying to qualified rehabilitation expenditures and rehabilitation expenses incurred on or after that date. 

     

     


  • Summary date: Jul 22 2014 - More information

    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.

     


  • Summary date: May 14 2014 - More information

    Identical to H 1050, filed 5/14/14.


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