GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1999

S	1 

SENATE BILL 1112

Short Title:  No Sales Tax Fee/Other Changes.	(Public)

─────────────────────────────────────── 
Sponsors: Senator Kerr.

─────────────────────────────────────── 
Referred to:  Finance.

─────────────────────────────────────── 

April 15, 1999

A BILL TO BE ENTITLED
AN ACT TO PROMOTE ELECTRONIC COMMERCE BY REPEALING THE SALES TAX REGISTRATION FEE AND TO MAKE OTHER CHANGES TO THE TAX LAWS AND RELATED STATUTES.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 105-164.4(c) reads as rewritten:
"(c)	Certificate of Registration. – Before a person may engage in business as a retailer or a wholesale merchant, the person must obtain a certificate of registration from the Department.  To obtain a certificate of registration, a person must register with the Department.
A certificate of registration is valid unless it is revoked for failure to comply with the provisions of this Article or becomes void.  A certificate issued to a retailer becomes void if, for a period of 18 months, the retailer files no returns or files returns showing no sales."
Section 2.  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 3.  G.S. 105-164.3(25) reads as rewritten:
"(25)	'Utility' means any of the following:
a.	A business entity that provides local, toll, or private telecommunications service as defined by G.S. 105-120(e).
b.	A business entity or a municipality that sells electric power."
Section 4.  G.S. 105-164.13 is amended by adding a new subdivision to read:
"(46)	Sales of electricity by a municipality whose only wholesale supplier of electric power is a federal agency and who is required by a contract with that federal agency to make payments in lieu of taxes."
Section 5.  G.S. 105-164.13(13b) reads as rewritten:
"(13b)	Prescription drugs, including the constituent elements and ingredients used to produce the drugs, the packaging materials, and any instructions or information about the product included in the package with the drugs."
Section 6.  G.S. 20-50(a) reads as rewritten:
"(a)	A vehicle intended to be operated upon any highway of this State must be registered with the Division in accordance with G.S. 20-52 and the owner of the vehicle must comply with G.S. 20-52 before operating the vehicle.  A vehicle that is leased to an individual who is a resident of this State is a vehicle intended to be operated upon a highway of this State. 
The Commissioner of Motor Vehicles or the Commissioner's duly authorized agent is empowered to grant a special one-way trip permit to move a vehicle without license upon good cause being shown.  When the owner of a vehicle leases the vehicle to a carrier of passengers or property and the vehicle is actually used by the carrier in the operation of its business, the license plates may be obtained by the lessee, upon written consent of the owner, after the certificate of title has been obtained by the owner.  When the owner of a vehicle leases the vehicle to a farmer and the vehicle is actually used by the farmer in the operation of a farm, the license plates may be obtained by the farmer at the applicable farmer rate, upon written consent of the owner, after the certificate of title has been obtained by the owner.  The lessee shall make application on an appropriate form furnished by the Division and file such evidence of the lease as the Division may require."
Section 7.  G.S. 105-449.87(a)(1) reads as rewritten:
"(a)	Tax. – An excise tax at the motor fuel rate is imposed on the following:
(1)	Dyed diesel fuel that is used to operate a highway vehicle for a use that is not a nontaxable use under § 4082(b) of the Code.  The tax does not apply, however, to dyed diesel fuel that is used to operate special mobile equipment."
Section 8.  G.S. 105-449.106 reads as rewritten:
"§ 105-449.106.  Quarterly refunds for certain local governmental entities, nonprofit organizations, taxicabs, and special mobile equipment.
(a)	Government and Nonprofits. – A local governmental entity or a nonprofit organization listed below that purchases and uses motor fuel may receive a quarterly refund, for the excise tax paid during the preceding quarter, at a rate equal to the amount of the flat cents-per-gallon rate plus the variable cents-per-gallon rate in effect during the quarter for which the refund is claimed, less one cent (1¢) per gallon. 
					An application for a refund allowed under this subsection must be made in accordance with this Part and must be signed by the chief executive officer of the entity. The chief executive officer of a nonprofit organization is the president of the organization or another officer of the organization designated in the charter or bylaws of the organization.
Any of the following entities may receive a refund under this subsection:
(1)	A county or a municipal corporation.
(2)	A private, nonprofit organization that transports passengers under contract with or at the express designation of a unit of local government.
(3)	A volunteer fire department.
(4)	A volunteer rescue squad.
(5)	A sheltered workshop recognized by the Department of Health and Human Services.
(b)	Taxi. – A person who purchases and uses motor fuel in a taxicab, as defined in G.S. 20-87(1), while the taxicab is engaged in transporting passengers for hire, or in a bus operated as part of a city transit system that is exempt from regulation by the North Carolina Utilities Commission under G.S. 62-260(a)(8), may receive a quarterly refund, for the excise tax paid during the preceding quarter, at a rate equal to the flat cents-per-gallon rate plus the variable cents-per-gallon rate in effect during the quarter for which the refund is claimed, less one cent (1¢) per gallon. An application for a refund must be made in accordance with this Part.
(c)	Special Mobile Equipment. – A person who purchases and uses motor fuel to operate special mobile equipment off-highway may receive a quarterly refund, for the excise tax paid during the preceding quarter, at a rate equal to the flat cents-per-gallon rate plus the variable cents-per-gallon rate in effect during the quarter for which the refund is claimed, less the amount of sales and use tax due on the fuel under this chapter as determined in accordance with G.S. 105-449.107(c).  An application for a refund must be made in accordance with this Part."
Section 9.  G.S. 20-140.5 reads as rewritten:
"§ 20-140.5.  Special mobile equipment may tow certain vehicles.
	Special mobile equipment may not tow any vehicle other than the following:
(1)	A single passenger vehicle that can carry no more than nine passengers, is carrying no passengers, and is carrying no more than its registered weight in property.
(2)	A single property-hauling vehicle that has a registered weight of 5,000 pounds or less, is carrying no passengers, and is carrying no more than its registered weight in property.
."
Section 10.  G.S. 20-116(a) reads as rewritten:
"(a)	The total outside width of any vehicle or the load thereon shall not exceed 96 inches, except as otherwise provided in this section.  When hogsheads of tobacco are being transported, a tolerance of six inches is allowed.  When sheet or bale tobacco is being transported the load must not exceed a width of 114 inches at the top of the load and the bottom of the load at the truck bed must not exceed the width of 102 inches inclusive of allowance for load shifting or settling.  Vehicles (other than passenger buses) that do not exceed the overall width of 102 inches and otherwise provided in this section may be operated in accordance with G.S. 20-115.1(c), (f), and (g).  Special mobile equipment is allowed a total outside width of 102 inches."
Section 11.  G.S. 105-449.116 reads as rewritten:
"§ 
		."
Section 12.  G.S. 105-122(d) reads as rewritten:
"(d)	After determining the proportion of its total capital stock, surplus and undivided profits as set out in subsection (c) of this section, which amount so determined shall in no case be less than its total actual investment in tangible property in this State, every corporation taxed under this section shall annually pay to the Secretary of Revenue, at the time the report and statement are due, a franchise or privilege tax, which is hereby levied at the rate of one dollar and fifty cents ($1.50) per one thousand dollars ($1,000) of the total amount of capital stock, surplus and undivided profits as herein provided. The tax imposed in this section shall in no case be less than thirty-five dollars ($35.00) and shall be for the privilege of carrying on, doing business, and/or the continuance of articles of incorporation or domestication of each such corporation in this State. The term 'total actual investment in tangible property' as used in this section shall be construed to mean the total original purchase price or consideration to the reporting taxpayer of its tangible properties, including real estate, in this State plus additions and improvements thereto less reserve for depreciation as permitted for income tax purposes. In computing 'total actual investment in tangible personal property' there shall also be deducted reserves for the entire cost of any air-cleaning device or sewage or waste treatment plant, including waste lagoons, and pollution abatement equipment purchased or constructed and installed which reduces the amount of air or water pollution resulting from the emission of air contaminants or the discharge of sewage and industrial wastes or other polluting materials or substances into the outdoor atmosphere or into streams, lakes, or rivers, upon condition that the corporation claiming such deduction shall furnish to the Secretary a certificate from the Department of Environment and Natural Resources or from a local air pollution control program for air-cleaning devices located in an area where the Environmental Management Commission has certified a local air pollution control program pursuant to G.S. 143-215.112 certifying that said Department or local air pollution control program has found as a fact that the air-cleaning device, waste treatment plant or pollution abatement equipment purchased or constructed and installed as above described has actually been constructed and installed and that such device, plant or equipment complies with the requirements of the Environmental Management Commission or local air pollution control program with respect to such devices, plants or equipment, that such device, plant or equipment is being effectively operated in accordance with the terms and conditions set forth in the permit, certificate of approval, or other document of approval issued by the Environmental Management Commission or local air pollution control program and that the primary purpose thereof is to reduce air or water pollution resulting from the emission of air contaminants or the discharge of sewage and waste and not merely incidental to other purposes and functions. The cost of constructing facilities of any private or public utility built for the purpose of providing sewer service to residential and outlying areas shall be treated as deductible for the purposes of this section; the deductible liability allowed by this section shall apply only with respect to such pollution abatement plants or equipment constructed or installed on or after January 1, 1955."
Section 13.  Section 1 of this act becomes effective January 1, 2000.  Sections 2 through 4, 7, and 9 through 11 of this act become effective July 1, 1999.  Section 5 of this act becomes effective October 1, 1999.  Section 8 of this act is effective when it becomes law and applies to taxes paid on or after January 1, 1999.  Section 12 of this act becomes effective for taxable years beginning on or after January 1, 2000.  The remainder of this act is effective when it becomes law.