GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1999

H	1 

HOUSE BILL 1196

Short Title:  Uniform Consumer Finance Tax.	(Public)

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Sponsors: Representative Miller.

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Referred to:  Finance.

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April 15, 1999

A BILL TO BE ENTITLED
AN ACT TO PROVIDE FOR UNIFORM TAX TREATMENT OF CONSUMER FINANCE BUSINESSES.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 105-88 reads as rewritten:
"§ 105-88.  Loan agencies or brokers.
(a)	Every person, firm, or corporation engaged in or soliciting any of the following businesses, and maintaining a place of business for conducting the business, must pay for the privilege of engaging in that business an annual tax of seven hundred fifty dollars ($750.00) for each location at which the business is conducted:
(1)	The business of making loans or lending money, accepting liens on, or contracts of assignments of, salaries or wages, or any part thereof, or other security or evidence of debt for repayment of such loans in installment payment or otherwise.
(2)	The business of check cashing regulated under Article 22 of Chapter 53 of the General Statutes.
(3)	The business of pawnbroker regulated under Chapter 91A of the General Statutes.
(b)	This section does not apply to  banks, industrial banks, trust companies, savings and loan associations, cooperative credit unions, the business of negotiating loans on real estate as described in G.S. 105-41, or insurance premium finance companies licensed under Article 35 of Chapter 58 of the General Statutes.  This section applies to those persons or concerns operating what are commonly known as loan companies or finance companies and whose business is as hereinbefore described, and those persons, firms, or corporations pursuing the business of lending money and taking as security for the payment of the loan and interest an assignment of wages or an assignment of wages with power of attorney to collect the amount due, or other order or chattel mortgage or bill of sale upon household or kitchen furniture. No real estate mortgage broker is required to obtain a privilege license under this section merely because the broker advances the broker's own funds and takes a security interest in real estate to secure the advances and when, at the time of the advance, the broker has already made arrangements with others for the sale or discount of the obligation at a later date and does so sell or discount the obligation within the period specified in the arrangement or extensions thereof; or when, at the time of the advance the broker intends to sell the obligation to others at a later date and does, within 12 months from date of initial advance, make arrangements with others for the sale of the obligation and does sell the obligation within the period specified in the arrangement or extensions thereof; or because the broker advances the broker's own funds in temporary financing directly involved in the production of permanent-type loans for sale to others; and no real estate mortgage broker whose mortgage lending operations are essentially as described above is required to obtain a privilege license under this section.
(c)	At the time of making any such loan, the person, or officer of the firm or corporation making the loan, shall give to the borrower in writing in convenient form a statement showing the amount received by the borrower, the amount to be paid back by the borrower, the time in which the amount is to be paid, and the rate of interest and discount agreed upon.
(d)	A loan is not collectible at law in the courts of this State in any case where the person making the loan has failed to pay the tax levied in this section or otherwise failed to comply with the provisions of this section.
(e)	Counties, cities, and towns may levy a license tax on the business taxed under this section not in excess of one hundred dollars ($100.00)."
Section 2.  This act becomes effective July 1, 1999.