Bill Summary for S 498 (2019-2020)

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Summary date: 

Jul 9 2019

Bill Information:

View NCGA Bill Details2019-2020 Session
Senate Bill 498 (Public) Filed Tuesday, April 2, 2019
Intro. by B. Jackson, Blue, Newton.

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Bill summary

Senate committee substitute to the 1st edition makes the following changes.

Makes the following changes to proposed GS 166A-19.70A. Makes a technical change to the lead-in language. Retitles the statute as Facilitate critical infrastructure disaster relief. Amends the statute's purpose to modify the legislative finding by listing the state tax laws and regulatory requirements that nonresident businesses and nonresident employees are exempt from when providing temporary disaster-related work in the state during a disaster response period at the request of a critical infrastructure company. Exemptions include corporate and individual income tax, franchise tax, unemployment tax, workers' compensation, and certificates of authority from the Secretary of State (previously set forth separate subsections for nonresident businesses and employees, and included exemptions from S-corporation income tax and information return requirements). Modifies and adds to the definitions provided. Amends disaster response period, now defined to expire on the earlier of 60 days following the expiration of the disaster declaration or 180 days following the disaster declaration's issuance (previously, extended 60 days following the declaration's expiration only). Replaces the term out-of-state business with the term nonresident business, defining the term to mean an entity that has not been required to file an income or franchise tax return with the State for three years prior to the disaster response period, other than those arising from the performance of disaster-related work during a tax year prior to the statute's enactment, that is a nonresident entity and/or a nonresident individual who owns an unincorporated business as a sole proprietor. Similarly, replaces the term out-of-state employee with nonresident employee. Adds the terms corporation, employee, nonresident entity, and nonresident individual. Modifies the terms registered public communications provider and registered public utility to refer to corporations doing business in the state rather than a person registered to conduct business in the state. Further amends registered public utility to include corporations subject to the control of the NC Rural Electrification Authority. Now requires a critical infrastructure company to provide notification to the Department of Revenue (Department) within 90 days of the expiration of the disaster response period (previously required notification of the State Emergency Response Team within 30 days of the business's entry into the state). Adds a requirement for a nonresident business to provide notification to the Department within 90 days of the date the nonresident business concludes its disaster-related work. Requires the notifications to be in the form and manner required by the Department Secretary, and details each notification's required content. Establishes that failure to submit a timely notification forfeits the relief provided by the statute for the nonresident business. Makes clarifications to the statute's limitations, specifying that the statute only provides exemptions for nonresident businesses and nonresident employees who would not be subject to state tax and regulatory requirements but for their performance of disaster-related work and only during a disaster response period.

Amends the following statutes to implement the intended exceptions for nonresident businesses and nonresident employees performing requested disaster related work: GS 57D-1-24, GS 96-1, GS 105-114, GS 105-130.1, GS 105-130.5, GS 105-131.7, GS 105-154, GS 105-153.2, GS 105-153.8, GS 105-163.1, GS 105-163.3, and GS 105-163.7. Eliminates the proposed conforming changes to GS 96-9.2, GS 97-13, GS 105-125, GS 105-130.11, GS 105-153.4, and GS 105-163.2.

Deletes proposed GS 55-1-51, which provided exemptions from certificate of authority requirements for certain disaster relief activities (critical infrastructure work and motor fuel transport) and instead enacts GS 55-15-01(e), providing for substantively identical exemptions. 

Makes conforming modifications to the proposed changes to GS 105-130.5, now adding to the required additions to federal taxable income in determining state net income payments made to an affiliate or subsidiary not subject to tax in accordance with the policy in new GS 166A-19.70A, to the extent the payments are deducted in determining federal taxable income.

Adds to GS 105-163.3, establishing that businesses are exempt from state withholding requirements for wages paid to nonresident employees or compensation paid to a nonresident ITIN contractor when derived from disaster-related work performed during a disaster response period at the request of a critical infrastructure company. 

Further amends GS 105-131.7, GS 105-154, and GS 105-163.7 to require nonresident entities and employers exempt under the policy in new GS 166A-19.70A to provide information to their shareholders, partners, and employees, as applicable, even though they are not required to file a return with the Department, so that the shareholders, partners, and employees may properly file a state income tax return. 

Maintains proposed GS 105-449.69A, allowing the issuance of a temporary license to import, export, distribute, or transport motor fuel in the state in response to a disaster declaration. Makes a technical change.

Changes the effective date of the act, now applicable to disaster declarations on or after the date the act becomes law (was, for taxable years beginning on or after January 1, 2019).