GENERAL ASSEMBLY OF NORTH CAROLINA
1987 SESSION
CHAPTER 1044
AN ACT TO MAKE TECHNICAL AMENDMENTS TO THE REVENUE LAWS.
The General Assembly of North Carolina enacts:
Section 1. G.S. 105-258 reads as rewritten:
"§ 105-258. Powers of Secretary of Revenue; who may sign and verify pleadings, legal documents, etc. - The Secretary of Revenue, for the purpose of ascertaining the correctness of any return, making a return where none has been made, or determining the liability of any person for any tax imposed by this Subchapter, or collecting any such tax, shall have the power to examine, personally, or by an agent designated by him, any books, papers, records, or other data which may be relevant or material to such inquiry, and the Secretary may summon the person liable for the tax or required to perform the act, or any officer or employee of such person, or any person having possession, custody, care or control of books of account containing entries relevant or material to the income and expenditures of the person liable for the tax or required to perform the act, or any other person having knowledge in the premises, to appear before the Secretary, or his agent, at a time and place named in the summons, and to produce such books, papers, records or other data, and to give such testimony under oath as may be relevant or material to such inquiry, and the Secretary or his agent may administer oaths to such person or persons. If any person so summoned refuses to obey such summons or to give testimony when summoned, the Secretary may apply to the Superior Court of Wake County for an order requiring such person or persons to comply with the summons of the Secretary, and the failure to comply with such court order shall be punished as for contempt.
In any action, proceeding, or matter of any kind, to which
the Secretary of Revenue is a party or in which he may have an interest, all
pleadings, legal notices, proofs of claim, warrants for collection,
certificates of tax liability, executions, and other legal documents may be
signed and verified on behalf of the Secretary by the assistant commissioner
a Deputy or Assistant Secretary or by any director or assistant
director of any division of the Department of Revenue or by any other agent or
employee of the Department so authorized by the Secretary of Revenue."
Sec. 2. G.S. 105-102.4(b) reads as rewritten:
"(b) A retail variety
store privilege license replaces the licenses imposed in the following sections
and relieves the licensee of liability for the taxes imposed in these sections:
G.S. 105-49, 105-51, 105-65.2, 105-80(b), 105-82 105-82, and
105-89(a)."
Sec. 3. G.S. 105-164.3(20)b. reads as rewritten:
"b. 'Computer
program' means the complete plan for the solution of a problem, such as the
complete sequence of automatic data-processing equipment instructions necessary
to solve a problem, and includes both systems and application programs and
subdivisions, such as assemblers, compliers compilers, routines,
generators, and utility programs."
Sec. 4. G.S. 105-164.4(1)d. reads as rewritten:
"d. Sales of fuel, other than electricity or piped natural gas, to manufacturing industries and manufacturing plants for use in connection with the operation of such industries and plants other than sales of fuels to be used for residential heating purposes. The quantity of fuel purchased or used at any one time shall not in any manner be a determinative factor as to whether any sale or use of fuel is or is not subject to the one percent (1%) rate of tax imposed herein."
Sec. 5. G.S. 105-164.14(b) reads as rewritten:
"(b) The Secretary of
Revenue shall make refunds semiannually to hospitals not operated for profit
(including hospitals and medical accommodations operated by an authority
created under the Hospital Authorities Law, Article 12 of Chapter 131), Article
2 of Chapter 131E), educational institutions not operated for profit,
churches, orphanages and other charitable or religious institutions and
organizations not operated for profit of sales and use taxes paid under this
Article, except under G.S. 105-164.4(4a), by such institutions and
organizations on direct purchases of tangible personal property for use in
carrying on the work of such institutions or organizations. Sales
and use tax liability indirectly incurred by such institutions and
organizations on building materials, supplies, fixtures and equipment which
shall become a part of or annexed to any building or structure being erected,
altered or repaired for such institutions and organizations for carrying on
their nonprofit activities shall be construed as sales or use tax liability
incurred on direct purchases by such institutions and organizations, and such
institutions and organizations may obtain refunds of such taxes indirectly
paid. The Secretary of Revenue shall also make refunds semiannually to
all other hospitals (not specifically excluded herein) of sales and use tax
paid by them on medicines and drugs purchased for use in carrying out the work
of such hospitals. This subsection does not apply to organizations,
corporations, and institutions that are owned and controlled by the United
States, the State, or a unit of local government, except hospital facilities
created under Article 12 of Chapter 131 Article 2 of Chapter 131E of
the General Statutes and nonprofit hospitals owned and controlled by a unit of
local government that elect to receive semiannual refunds under this subsection
instead of annual refunds under subsection (c). In order to receive the
refunds herein provided for, such institutions and organizations shall file a
written request for refund covering the first six months of the calendar year
on or before the fifteenth day of October next following the close of said
period, and shall file a written request for refund covering the second six
months of the calendar year on or before the fifteenth day of April next
following the close of that period. Such requests for refund shall be
substantiated by such proof as the Secretary of Revenue may require, and no
refund shall be made on applications not filed within the time allowed by this
section and in such manner as the Secretary may require."
Sec. 6. G.S. 105-164.12 reads as rewritten:
"§ 105-164.12. Freight or delivery
transportation charges.-Freight Freight, delivery,
or other like transportation charges connected with the sale of tangible
personal property are subject to the sales and use tax if title to the tangible
personal property being transported passes to the purchaser at the destination
point. Where title to the tangible personal property being transported
passes to the purchaser at the point of origin, the freight or other
transportation charges are not subject to the sales tax. For the purposes
of this section it is immaterial whether the retailer or purchaser actually
pays for any charges made for transportation, whether the charges were actually
paid by one for the other, or whether a credit or allowance is made or given
for such charges. Nothing in this section shall operate to exclude from
the use tax any freight freight, delivery or other like
transportation charges. Such charges shall be included as a portion of
the cost price and subject to the use tax."
Sec. 7. G.S. 105-141(a)(20) reads as rewritten:
"(20) Subject to the provisions of G.S. 105-141(b)(4), amounts received or made available from:
a. Individual retirement accounts described in section 408(a) of the Code; and
b. Individual
retirement annuities described in section 408(b) of the Code; and Code.
c. Retirement
bonds described in section 409 of the Code to the extent such amounts are
includible in the recipient's gross income under the internal revenue laws of
the United States."
Sec. 8. G.S. 105-142(d) reads as rewritten:
"(d) The amount actually distributed to any employee or the beneficiary of an employee by an employees' trust, which qualifies under subsection (f)(1)a of G.S. 105-161 as an exempt organization, or qualified plan which meets the requirements of section 401(a) of the Code shall be taxable to the employee or his beneficiary in the year in which distributed except to the extent such distribution is a rollover amount which is not includable in federal gross income under section 402(a) of the Code; provided, that if such employee has made contributions to such trust or such qualified plan, and the benefits are received as periodic payments, the amounts annually received shall be taxed as an annuity as provided in G.S. 105-141.1. The amount actually received by the employee or his beneficiary which consists of corporate shares or other securities shall be taken into account in determining the amount distributed at their fair market value, except that the net unrealized appreciation in the corporation shares or other securities of the employer corporation shall not be included in determining such amount distributed for purposes of this subsection.
The amount paid or distributed out of an individual retirement account described in section 408(a) of the Code, or individual retirement annuity described in section 408(b) of the Code, shall be includable in the gross income of the payee or distributee to the extent such amounts are includable in the payee's or distributee's gross income for federal income tax purposes.
Subject to the provisions of G.S. 105-141(b)(4) the amount
received from a retirement bond described in section 409 of the Code, shall be
included in the gross income of the payee or distributee to the extent such
amounts are includable in the payee's or distributee's gross income for federal
income tax purposes.
In the case of a pension, profit-sharing, or stock bonus plan or trust established by an employer for the benefit of his employees which does not meet the requirements of G.S. 105-161(f)(1)a or section 401(a) of the Code, any contributions to such plan or trust made by an employer during a taxable year shall be reportable as income in such taxable year by employees in whose names such contributions are credited only to the extent that such employees shall have acquired a nonforfeitable right to such contributions in such taxable year."
Sec. 9. G.S. 105-147(20) reads as rewritten:
"(20) Reasonable amounts paid by employers
to trusts which qualify for exemption under subsection (f)(1)a of G.S. 105-161
and plans established by employers for the benefit of their employees which
meet the requirements of section 401(a) of the Code; deductible employee
contributions as described in subsection 72(o)(5) of the Code; reasonable
amounts paid by a self-employed individual or owner-employee to a retirement
program pursuant to a plan adopted by such individual and approved by the
Internal Revenue Service, to the extent allowed under the Code; reasonable
amounts paid by or on behalf of an individual for his benefit or for the
benefit of himself and his spouse to an individual retirement account described
in section 408(a) of the Code, for an individual retirement annuity described
in section 408(b) of the Code; Code, or for a retirement bond
described in section 409 of the Code (but only if the bond is not redeemed
within 12 months of the date of its issuance); and reasonable amounts paid
by employers to nonqualified plans or trusts established by employers for the
benefit of their employees, but only to the extent that such amounts
contributed by such employers shall be required under the provisions of this
Division to be included in the gross income of such employees. The
deductions allowed by this subsection shall be allowed to the extent allowable
under the Code unless contrary to the context and intent of this Division."
Sec. 10. G.S. 105-251.1(c)(2) reads as rewritten:
"(2) The reporting
requirements set out in subsection (1) above may be fulfilled by providing to
the Department a true and exact copy of all reports of currency transactions in
excess of ten thousand dollars ($10,000) reported to the Commissioner of the
Internal Revenue Service pursuant to 31 U.S.C. § 1081 31 U.S.C.
§ 5313(a) and 31 C.F.R. § 103, 31 C.F.R. § 103.22(a)(1), as
those various statutes and regulations were in effect on January 1, 1983. January
1, 1988."
Sec. 12. G.S. 105-141(b)(5) reads as rewritten:
"(5) Any amounts received
as compensation for personal injuries or sickness (i) through accident or
health insurance, (ii) through health or accident plans financed by
profit-sharing trusts or pension trusts, (iii) under workmen's workers'
compensation acts or similar acts acts, (which have been
judicially declared to provide benefits in the nature of workmen's compensation
benefits, by whatever name called), and (iv) for damages (whether by suit
or agreement); and any amounts received through self-funded reimbursement plans
adopted by an employer for the benefit of his employees, reimbursing them for
expenses incurred for their medical care or for the medical care of their
spouses or their dependents; provided, that any amounts received from sources
mentioned in this subdivision as reimbursement for medical care expenses
incurred and claimed as a deduction in a prior year or in prior years shall be
excluded only to the extent that such amounts exceed the deduction claimed
under subdivision (11) of G.S. 105-147, except that nothing in this subdivision
shall be construed as preventing a taxpayer from filing an amended return for a
taxable year in which a medical deduction was claimed and allowed for the
purpose of reducing the amount of the medical expense deduction claimed in such
year by any reimbursement for such medical expenses received in a later year
when a change in the prior year is not barred by the provisions of this
Division."
Sec. 13. G.S. 105-296 is amended by adding after subsection (h) a new subsection (i) to read:
"(i) Prior to the first meeting of the board of equalization and review, the assessor may, for good cause, change the appraisal of any property subject to assessment for the current year. Written notice of a change in assessment shall be given to the taxpayer at his last known address prior to the first meeting of the board of equalization and review."
Sec. 13.1. G.S. 105-277.3 is amended by adding a new subsection (d) to read:
"(d) Enrollment in the federal Conservation Reserve Program authorized by Title XII of the Food Security Act of 1985 (Pub. L. 99-198), as amended, shall not preclude eligibility of land for present use value treatment solely on the grounds that the land is no longer in actual production, and income derived from participation in the federal Conservation Reserve Program may be used in meeting the minimum income requirements of this section either separately or in combination with income from actual production. Land enrolled in the federal Conservation Reserve Program shall be assessed as agricultural land if it is planted in vegetation other than trees, or as forest land if it is planted in trees."
Sec. 13.2. G.S. 105-277.4 is amended by adding a new subsection (d) to read:
"(d) Notwithstanding the provisions of subsection (c), if a farm unit loses eligibility for present use value treatment solely due to a change in income caused by enrollment of land in the federal Conservation Reserve Program authorized by Title XII of the Food Security Act of 1985 (Pub. L. 99-198), as amended, no deferred taxes shall be owed and all present use value tax liens shall be extinguished.
Sec. 13.3. Notwithstanding any other provision of law, the Committee to Elect Julian Pierce, Superior Court Judge may expend any of its funds for a purpose allowed by Section 527(d)(2) of the Internal Revenue Code of 1986; provided that expenditure must be reported as if it were an expenditure as defined by G.S. 163-278.6(9).
Sec. 14. Sections 7, 8, 9, and 12 of this act are effective for taxable years beginning on or after January 1, 1988; Sections 13.1 and 13.2 are effective for taxable years beginning on or after January 1, 1986; the remainder of this act is effective upon ratification.
In the General Assembly read three times and ratified this the 5th day of July, 1988.