1999 Tax Law Changes - Privilege Tax

II. Privilege Tax

G.S. 105-37.1 - 3% Gross Receipts Tax Statutes Combined: This statute was amended by two legislative acts. The first act rewrote this statute to combine its substantive provisions with those of G.S. 105-38, which was repealed. The purpose of the rewrite was to set out in the same statute all the forms of entertainment that are subject to a 3% gross receipts tax. The rewrite did not change the scope of what is subject to the 3% tax or the status of city and county privilege taxes on these entertainments. The rewrite moves circuses, dog and pony shows, and similar entertainments from G.S. 105-38 to G.S. 105-37.1.
The second act made a technical change to the statute's catchline. It deleted a reference to an effective date of July 1, 1999. That reference is now obsolete.
(Rewrite effective July 22, 1999; SB 55, s. 14(a), S.L. 99-337; catchline change effective August 13, 1999; HB 162, s. 26, S.L. 99-456.)

G.S. 105-38 - Repeal: This statute was repealed because it was incorporated in rewritten G.S. 105-37.1. The statute levied a 3% gross receipts tax on entertainments such as circuses and dog and pony shows.
(Effective July 22, 1999; SB 55, s. 14(b), S.L. 99-337.)

G.S. 105-38.1 - Conforming and Technical Change: The catchline of this statute was changed from "Amusements - Motion picture shows" to "Motion picture shows". Subsection (b), Exemptions, was deleted because the exemption set out in that subsection for movies shown by a center for the performing arts was moved to revised G.S. 105-40(7). A reference to repealed G.S. 105-38 was also deleted. The movement of the exemption to G.S. 105-40(7) continues the effort begun last session to set out all the exemptions to the gross receipts entertainment taxes in the same statute.
(Effective July 22, 1999; SB 55, s. 15(a), S.L. 99-337.)

G.S. 105-40(7) - Conforming Change: This statute was amended to incorporate a gross receipts tax exemption that was moved from G.S. 105-38.1(b) to this subdivision. The exemption is for motion pictures shown by a qualifying corporation that operates a center for the performing and visual arts. The exemptions applies to the 3% tax on live entertainments as well as the 1% tax on motion picture shows.
(Effective July 22, 1999; SB 55, s, 15(b), S.L. 99-337.)

G.S. 105-88 - Loan Agency License Reduced and Expanded: This statute was revised to make pawn brokers and check cashers subject to a $250 annual per location privilege license tax and to reduce the tax on the loan agencies that were already subject to the statute from a $750 annual per location tax to a $250 annual per location tax. The changes are effective for the 1999-00 fiscal year. The penalty provisions of the statute were conformed to the standard G.S. 105-236 penalties; this conforming change was accomplished by removing the reference in subsection (d) to a "Class 1 misdemeanor" and a penalty of "double the tax due." G.S. 105-236(2) sets out the penalty for failure to obtain a license. Finally, the words "or brokers" were deleted from the catchline, leaving simply "Loan agencies."
(Effective July 1, 1999; SB 1112, s. 2, S.L. 99-438.)

G.S. 105-102.6 - Newsprint Tax Revised: This tax was revised in three ways, effective July 1, 1999:

  1. The next scheduled increase in the minimum recycled content percentage was delayed from 2001 to 2005. The minimum content percentage was scheduled to increase from 35% to 40% in 2001. This act delays that increase until 2005.
  2. The credit allowed for a recycling program was changed to include the amount of magazines recycled. Before this change, only newsprint was included in the credit.
  3. The credit allowed for a recycling program was changed from a credit of one-half ton for each ton of newsprint recycled to a credit of one ton for each ton of newsprint and magazines recycled.

Under this tax, publishers of newsprint are required to register with the Secretary of Revenue and pay a privilege tax if the product published does not contain a statutorily set minimum percentage of recycled material. The tax is $15 for every ton in excess of the minimum recycled content. In determining the excess, the publisher is given credit for the amount of newsprint and magazines the publisher has returned for recycling. The credit given reduces the tonnage on which the tax is imposed.
(Effective July 1, 1999; HB 1479, S.L. 99-346.)

G.S. 105-109.1 - Repeal: This statute was repealed so that the general interest accrual provisions in G.S. 105-241.1(i) will apply to all of the privilege license taxes in Article 2 of Chapter 105 of the General Statutes. Under G.S. 105-241.1(i) interest accrues on an assessment from the time the tax was due until paid. Before its repeal, this statute limited the accrual of interest on late payments to the entertainment taxes imposed by G.S. 105-37.1(a) and G.S. 105-38(f), the installment paper dealer tax imposed by G.S. 105-83(b), and the tax on publishers of newsprint imposed by G.S. 105-102.6.
(Effective July 22, 1999; SB 55, s. 16, S.L. 99-337.)

G.S. 105-113 - Repeal: This statute was repealed because it is obsolete. The sheriff and city clerk are no longer required to submit to the Secretary of Revenue a list of businesses requiring State privilege licenses under Article 2 of Chapter 105 of the General Statutes.
(Effective July 22, 1999; SB 55, s. 17, S.L. 99-337.)