GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1999

S	1 

SENATE BILL 440

Short Title:  No Food Tax/Funds for Local Govts.	(Public)

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Sponsors: Senators Ballantine; Allran, Carpenter, Carrington, Cochrane, East, Forrester, Foxx, Garwood, Hartsell, Horton, Moore, Rucho, and Shaw of Guilford.

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Referred to:  Finance.

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March 22, 1999

A BILL TO BE ENTITLED
AN ACT TO REPEAL THE LOCAL SALES TAX ON FOOD AND TO DISTRIBUTE ONE CENT OF THE STATE SALES TAX TO LOCAL GOVERNMENTS EACH YEAR.
The General Assembly of North Carolina enacts:
Section 1.(a)	G.S. 105-164.13(38) reads as rewritten:
"(38)	Any of the following:
a.	Food and other items that may be lawfully purchased under the Food Stamp Program, 7 U.S.C. § 51, whether or not actually purchased under that Program.
b.	Supplemental foods lawfully purchased with a food instrument issued under the Special Supplemental Food Program, 42 U.S.C. § 1786.
c.	Supplemental foods purchased for direct distribution by the Special Supplemental Food Program."
Section 1.(b) G.S. 105-164.13B is repealed.
Section 2.  Article 5 of Chapter 105 of the General Statutes is amended by adding a new section to read:
"§ 105-164.44E. Tax sharing with local governments.
The Secretary shall distribute to local governments each year as provided in this section approximately one-fourth of the State's tax levied under this Article at the general rate of tax.  Each quarter, the Secretary shall remit to each local government entitled to a distribution of local tax proceeds under Articles 39, 40, and 42 of this Chapter a distribution of State funds in an amount equal to fifty percent (50%) of the amount of local taxes to be distributed to the local government under those Articles for that quarter.  The Secretary shall draw the State funds to be distributed from collections under this Article."
Section 3.  G.S. 105-472(a) reads as rewritten:
"(a)	County Allocation. – The Secretary shall, on a quarterly basis, allocate to each taxing county for which the Secretary collects the tax the net proceeds of the tax collected in that county under this Article.  For the purpose of this section, 'net proceeds' means the gross proceeds of the tax collected in each county under this Article less taxes refunded, the cost to the State of collecting and administering the tax in the county as determined by the Secretary, the cost to the State of administering the distribution under G.S. 105-164.44E, and other deductions that may be charged to the county.  If the Secretary collects local sales or use taxes in a month and the taxes cannot be identified as being attributable to a particular taxing county, the Secretary shall allocate the taxes among the taxing counties in proportion to the amount of taxes collected in each county under this Article during that month and shall include them in the quarterly distribution."
Section 4.  G.S. 105-164.44C is repealed.
Section 5.  G.S. 105-465 reads as rewritten:
"§ 105-465.  County election as to adoption of local sales and use tax.
The board of elections of any county, upon the written request of the board of county commissioners, or upon receipt of a petition signed by qualified voters of the county equal in number to at least fifteen percent (15%) of the total number of votes cast in the county, at the last preceding election for the office of Governor, shall call a special election for the purpose of submitting to the voters of the county the question of whether a one percent (1%) sales and use tax will be levied.
The special election shall be held under the same rules applicable to the election of members of the General Assembly. No new registration of voters shall be required. All qualified voters in the county who are properly registered not later than 21 days (excluding Saturdays and Sundays) prior to the election shall be entitled to vote at the election. The county board of elections shall give at least 20 days' public notice prior to the closing of the registration books for the special election.
The county board of elections shall prepare ballots for the special election. The question presented on the ballot shall be 'FOR one percent (1%) local sales and use tax on items subject to State sales and use tax at the general State "rate.' or 'AGAINST one percent (1%) local sales and use tax on items subject to State sales and use tax at the general State rate'.
The county board of elections shall fix the date of the special election, except that the special election shall not be held on the date or within 60 days of any biennial election for county officers, nor within one year from the date of the last preceding special election under this section."
Section 6.  G.S. 105-467 reads as rewritten:
"§ 105-467.   Scope of sales tax.
(a)	Scope – The sales tax that may be imposed under this Article is limited to a tax at the rate of one percent (1%) of the items listed in this subsection.  The sales tax authorized by this Article does not apply to sales that are taxable by the State under G.S. 105-164.4 but are not specifically included in this subsection.
(1)	The sales price of tangible personal property subject to the general rate of sales tax imposed by the State under G.S. 105-164.4(a)(1) and (a)(4b).
(2)	The gross receipts derived from the lease or rental of tangible personal property when the lease or rental of the property is subject to the general rate of sales tax imposed by the State under G.S. 105-164.4(a)(2).
(3)	The gross receipts derived from the rental of any room or other accommodations subject to the general rate of sales tax imposed by the State under G.S. 105-164.4(a)(3).
(4)	The gross receipts derived from services rendered by laundries, dry cleaners, and other businesses subject to the general rate of sales tax imposed by the State under G.S. 105-164.4(a)(4).
	(b)	Exemptions, Exclusions, and Refunds. –  The State exemptions and exclusions contained in G.S. 105-164.13 and the State refund provisions contained in G.S. 105-164.14 apply to the local sales and use tax authorized to be levied and imposed under this Article. A taxing county may not allow an exemption, exclusion, or refund that is not allowed under the State sales and use tax.
(c)	Situs. – The local sales tax authorized to be imposed and levied under this Article applies to taxable transactions by retailers whose place of business is located within the taxing county. For the purpose of this Article, the situs of a transaction is the location of the retailer's place of business."
Section 7.  Section 4(5) of Chapter 1096 of the 1967 Session Laws is repealed.
Section 8.  Section 4 of this act becomes effective July 1, 1999.  Sections 1 and 5 through 7 of this act become effective October 1, 1999, and apply to sales made on or after that date.  Sections 2 and 3 of this act become effective January 1, 2000, and apply to distributions made on or after that date.  The remainder of this act is effective when it becomes law.