GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 1999
SESSION LAW 2000-2
The General Assembly of North Carolina enacts:
Section 1. G.S. 105-275 is amended by adding a new subdivision to read:
"(41) A vehicle that is offered at retail for short-term lease or rental and is owned or leased by an entity engaged in the business of leasing or renting vehicles to the general public for short-term lease or rental. For the purposes of this subdivision, the term 'short-term lease or rental' shall have the same meaning as in G.S. 105-187.1. A gross receipts tax as set forth by G.S. 153A-156 and G.S. 160A-215.1 is substituted for and replaces the ad valorem tax previously levied on these vehicles."
Section 2. Chapter 153A of the General Statutes is amended by adding a new section to read:
"§ 153A-156. Gross receipts tax on short-term leases or rentals.
(a) As a substitute for and in replacement of the ad valorem tax, which is excluded by G.S. 105-275(41), a county may levy a gross receipts tax on the gross receipts from the short-term lease or rental of vehicles at retail to the general public. The tax rate shall not exceed one and one-half percent (1.5%) of the gross receipts from such short-term leases or rentals.
(b) If a county enacts the substitute and replacement gross receipts tax pursuant to this section, any entity required to collect the tax shall include a provision in each retail short-term lease or rental agreement noting that the percentage amount enacted by the county of the total lease or rental price, excluding sales tax, is being charged as a tax on gross receipts. For purposes of this section, the transaction giving rise to the tax shall be deemed to have occurred at the location of the entity from which the customer takes delivery of the vehicle. The tax shall be collected at the time of lease or rental and placed in a segregated account until remitted to the county.
(c) The collection and use of taxes under this section are not subject to sales tax and are not included in the gross receipts of the entity. The proceeds collected under this section belong to the county and are not subject to creditor liens against the entity.
(d) A tax levied under this section shall be collected by the county but otherwise administered in the same manner as the tax levied under G.S. 105-164.4(a)(2).
(e) The following definitions apply in this section:
(1) Vehicle. - Any of the following:
a. A motor vehicle of the private passenger type, including a passenger van, minivan, or sport utility vehicle.
b. A motor vehicle of the cargo type, including cargo van, pickup truck, or truck with a gross vehicle weight of 26,000 pounds or less used predominantly in the transportation of property for other than commercial freight and that does not require the operator to possess a commercial drivers license.
c. A trailer or semitrailer with a gross vehicle weight of 6,000 pounds or less.
(2) Short-term lease or rental. - Defined in G.S. 105-187.1(4).
(f) The penalties and remedies that apply to local sales and use taxes levied under Subchapter VIII of this Chapter apply to a tax levied under this section. The county board of commissioners may exercise any power the Secretary of Revenue may exercise in collecting local sales and use taxes."
Section 3. Chapter 160A of the General Statutes is amended by adding a new section to read:
"§ 160A-215.1. Gross receipts tax on short-term leases or rentals.
(a) As a substitute for and in replacement of the ad valorem tax, which is excluded by G.S. 105-275(41), a city may levy a gross receipts tax on the gross receipts from the short-term lease or rental of vehicles at retail to the general public. The tax rate shall not exceed one and one-half percent (1.5%) of the gross receipts from such short-term leases or rentals. This tax on gross receipts is in addition to the privilege taxes authorized by G.S. 160A-211.
(b) If a city enacts the substitute and replacement gross receipts tax pursuant to this section, any entity required to collect the tax shall include a provision in each retail short-term lease or rental agreement noting that the percentage amount enacted by the city of the total lease or rental price, excluding sales tax, is being charged as a tax on gross receipts. For purposes of this section, the transaction giving rise to the tax shall be deemed to have occurred at the location of the entity from which the customer takes delivery of the vehicle. The tax shall be collected at the time of lease or rental and placed in a segregated account until remitted to the city.
(c) The collection and use of taxes under this section are not subject to sales tax and are not included in the gross receipts of the entity. The proceeds collected under this section belong to the city and are not subject to creditor liens against the entity.
(d) A tax levied under this section shall be collected by the city but otherwise administered in the same manner as the tax levied under G.S. 105-164.4(a)(2).
(e) The following definitions apply in this section:
(1) Vehicle. - Any of the following:
a. A motor vehicle of the private passenger type, including a passenger van, minivan, or sport utility vehicle.
b. A motor vehicle of the cargo type, including cargo van, pickup truck, or truck with a gross vehicle weight of 26,000 pounds or less used predominantly in the transportation of property for other than commercial freight and that does not require the operator to possess a commercial drivers license.
c. A trailer or semitrailer with a gross vehicle weight of 6,000 pounds or less.
(2) Short-term lease or rental. - Defined in G.S. 105-187.1.
(f) The penalties and remedies that apply to local sales and use taxes levied under Subchapter VIII of this Chapter apply to a tax levied under this section. The governing body of the city may exercise any power the Secretary of Revenue may exercise in collecting local sales and use taxes."
Section 4. The Fiscal Research Division of the North Carolina General Assembly shall compare the revenue generated statewide by the substitute and replacement gross receipts tax authorized by this act with the revenue that would have been generated by an ad valorem tax. The Fiscal Research Division shall report its findings to the 2003 Session of the 2003-2004 General Assembly.
Section 5. Section 1 of this act becomes effective for taxes imposed for taxable years beginning on or after July 1, 2000. The remainder of this act becomes effective July 1, 2000.
In the General Assembly read three times and ratified this the 11th day of May, 2000.
s/ Dennis A. Wicker
President of the Senate
s/ James B. Black
Speaker of the House of Representatives
s/ James B. Hunt, Jr.
Governor
Approved 8:30 a.m. this 17th day of May, 2000