2021 Sales and Use Tax Law Changes

The 2021 General Assembly added an exemption from sales and use tax to G.S. 105-164.13. The change and its effective date are as follows:

Alcoholic Beverage Manufacture Sales Tax Exemption – G.S. 105-164.13(5q). 
This subdivision is added and provides an exemption from sales and use tax for “[s]ales of machinery, equipment, parts, and accessories to the following permittees for use in the manufacture of the following items and supplies and ingredients used or consumed by the permittee in the manufacturing process:

a. The holder of an unfortified winery permit for the manufacture of unfortified wine, as authorized in G.S. 18B-1101. 
b. The holder of a fortified winery permit for the manufacture of fortified wine, as authorized in G.S. 18B-1102. 
c. The holder of a brewer permit for the manufacture of malt beverages, as authorized in G.S. 18B-1104. 
d. The holder of a distillery permit for the manufacture of spirituous liquor, as authorized in G.S. 18B-1105.”

(Effective October 1, 2021, and applies to sales made on or after that date; HB 890, s. 25.1., S.L. 2021-150.)

The 2021 General Assembly amended G.S. 105-164.13E. The change and its effective date are as follows:

Purchases of Fowl - G.S. 105-164.13E(a)(7) – This subdivision is amended and provides an exemption from sales and use tax on the following items that are purchased by a qualifying farmer or conditional farmer and used by the qualifying or conditional farmer primarily in farming operations:

“(7) Any of the following animals: 
a. Fowl. 
b. Livestock.” [Emphasis added.]

(Effective retroactively to July 1, 2020, and applies to purchases made on or after that date; SB 105, s. 42.13C.(a), S.L. 2021-180.)

The 2021 General Assembly amended G.S. 105-472. The change and its effective date are as follows:

Distribution between Counties and Cities of Taxes Collected - G.S. 105-472(b) – This subsection is amended to provide that “[t]he board of county commissioners in each taxing county shall, by resolution adopted during the month of April of each year, determine which of the two foregoing methods of distribution [Per Capita Method or Ad Valorem Method] shall be in effect in the county during the fiscal year following the succeeding fiscal year. In order for the resolution to be effective, a certified copy of it must be delivered to the Secretary in Raleigh within 15 calendar days after its adoption. If the board fails to adopt a resolution choosing a method of distribution not then in effect in the county, or if a certified copy of the resolution is not timely delivered to the Secretary, the method of distribution then in effect in the county shall continue in effect for the following fiscal year. The method of distribution in effect on the first of July of each fiscal year shall apply to every distribution made during that fiscal year.” [Emphasis added.]

(Effective August 30, 2021; SB 314, s. 1., S.L. 2021-124.)