2021 Excise Tax Law Changes

This subsection was amended to clarify the persons exempt from the tax on installment paper. This subsection previously provided that corporations were exempt from the installment paper tax if the corporation was liable for the privilege tax levied on certain banks and banking associations under G.S. 105-102.3. Session Law 2015-141 repealed the tax levied under G.S. 105-102.3 but did not make a conforming change to this statute. The law clarifies that these entities are not liable for the tax under this section. Specifically, banks as defined under G.S. 105-130.7B(b), and savings and loan associations are exempt from the installment paper tax.

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

“Cost price” under subsection (2) was amended to clarify that the cost price of a tobacco product is calculated from a tobacco product’s unique code or identifier. Further, to clarify the cost price for persons remitting tax on the sales of tobacco products, “if the cost price is unavailable for an item, the cost price is the average of the actual price paid for the item over the 12 calendar months before January 1 of the year in which the sale occurs.”

(Effective July 1, 2022; SB 105, s. 42.9.(a), S.L. 2021-180)

Session Law 2021-180 amended or enacted seven subsections extracting certain tobacco products into a new category of sales: remote sales. Prior to the amendment, the definition of delivery sales applied to all tobacco products. Effective July 1, 2022, delivery sales apply to cigarettes, smokeless tobacco, and vapor products. Remote sales apply to all other tobacco products.

“Delivery sale” under subsection (2d) was amended limiting the applicability of remote sales to cigarettes, smokeless tobacco, and vapor products.

“Delivery seller” under subsection (2e) was amended clarifying that a delivery seller can be located within or outside this state.

“Distributor” under subsection (3) was amended clarifying that a distributor includes a delivery seller of cigarettes.

“Remote sale” was added as a new term under subsection (8a), and is similar to the definition of delivery sales. A remote sale is a sale of tobacco products other than cigarettes, smokeless tobacco, and vapor products to consumers in this State in which either of the following applies:

1. The consumer submits the order for the sale by telephone, mail, the internet, or other online service or application, or when the seller is otherwise not in the physical presence of the consumer when the consumer submits the order. 
2. The tobacco products other than cigarettes, smokeless tobacco, or vapor products are delivered via mail or a delivery service.

“Remote seller” was added as a new term under subsection (8b). A remote seller is a person located within or outside this State who makes a remote sale.

“Retail dealer” under subsection (9) was amended to clarify the term retail dealer includes a remote seller and a delivery seller.

“Smokeless tobacco” was added as a new term under subsection (10b). Smokeless tobacco is “[a]ny finely cut, ground, powdered, or leaf tobacco, or other product containing tobacco, that is intended to be placed in the oral or nasal cavity or otherwise consumed without being combusted.”

(Effective July 1, 2022; SB 105, s. 42.9.(a), S.L. 2021-180)

This section was re-written to streamline the license revocation and hearing processes providing consistency for all license revocations initiated by the Department. This includes license revocations under Article 2A (Tobacco Products), Article 2C (Alcoholic Beverages), Article 36B (Motor Carrier), Article 36C (Motor Fuel), Article 36D (Alternative Fuel), and Chapter 119 (Gasoline and Oil Inspection).

Previously, the Department was required to hold a hearing to determine whether a tobacco licensee committed an act that would authorize the Department to permanently revoke the license.

As amended, for a summary revocation, the Secretary must notify the licensee of the revocation and hold a hearing within 10 days. The licensee may request to continue the hearing if the licensee notifies the Department before the day of the hearing. A hearing will be conducted as prescribed by the Secretary, and the Secretary must issue a final decision within 10 days of the hearing. When the Secretary summarily revokes the license, the revocation remains in effect pending the hearing decision.

As amended, for a non-summary revocation, the Department must send the licensee a notice of proposed revocation and provide the licensee an opportunity to request a hearing to contest the revocation. The licensee must file a written hearing request within 45 days of the date the notice of proposed revocation. If the licensee does not file a timely hearing request, the license will be revoked as provided in the proposed revocation and the revocation is not subject to further review. If the licensee files a timely hearing request, the licensee will be provided 20 days’ written notice of the hearing, and the hearing will be conducted as prescribed by the Secretary.

If the Department revokes the license, the former licensee must return all licenses issued to the licensee within 10 days of the issuance of the Department’s final decision. If a license is unable to be returned, the former licensee must include a written statement of the reasons, satisfactory to the Secretary, why the license cannot be returned.

This section has also been amended to change the means of communications regarding revocations and hearings. All notices may now be delivered in accordance with G.S. 105-241.20(b) (i.e., United States mail). The licensee may also consent to receive notices via electronic means such as electronic mail.

(Effective January 1, 2022; SB 105, s. 42.13D.(a), S.L. 2021-180)

This section was amended limiting the scope of delivery sales and providing other clarifying and stylistic changes.

Subsection (a) and subsection (b) were amended to limit the applicability of delivery sales to sales of cigarettes, smokeless tobacco, and vapor products.

Subsection (e) was repealed to clarify that this section applies to all delivery sales regardless of how the licensee came into possession of the tobacco product.

Subsection (f) was amended to clarify that delivery sellers who meet the definition of retailer under Article 5 of Chapter 105 are subject to all State laws that apply to retailers in this State.

(Effective July 1, 2022; SB 105, s. 42.9.(b), S.L. 2021-180)

This subsection was amended to clarify the points of taxation for cigarettes. The clarification also incorporates the statutory calculus under Article 5 of Chapter 105 to determine whether a substantial nexus exists between a distributor who is a delivery seller and North Carolina. See generally South Dakota v. Wayfair, Inc., et al., 585 U. S. ___ (2018). If the delivery seller would otherwise have to remit sales and use tax to North Carolina under Article 5, the delivery seller must collect and remit the excise tax on cigarettes.

As clarified, a distributor who meets any of the following conditions is liable for the cigarette tax: 

1. The distributor is the first person to possess or acquire cigarettes in this State. 
2. The distributor is the first person to bring into this State cigarettes made outside the State. 
3. The distributor is the original consignee of cigarettes made outside the State that are shipped into the State. 
4. The distributor makes a delivery sale of cigarettes for which the delivery seller is required to collect sales and use tax under Article 5 of this Chapter.

(Effective July 1, 2022; SB 105, s. 42.9.(c), S.L. 2021-180)

This section was recodified as G.S. 105-113.4H. This section is applicable to the entire Article but was misplaced within the structure of Article 2A. As recodified, this section is within “Part 1. General Provisions” of Article 2A.

(Effective November 18, 2021; SB 105, s. 42.13E.(a), S.L. 2021-180)

This section was recodified as G.S. 105-113.4I with stylistic and clarifying changes. Although Article 2A clearly establishes the activity that requires licensure, this statute only explicitly prohibited a person without a license from engaging in activity as a distributor. As amended, this section prohibits a person without a license from engaging in activity as a distributor, wholesale dealer, or retail dealer.

Where the statute now applies to all licenses issued under this Article, it was recodified within “Part 1. General Provisions” of Article 2A.

(Effective November 18, 2021; SB 105, s. 42.13E.(b)-(c), S.L. 2021-180)

Section catchline was amended with stylistic changes. Subsections (a) and (b) were amended clarifying the locations that require a distributor’s license.

Subsection (b) was stricken, re-written, and placed as its own subdivision under subsection (a). Subsection (a) clarifies the locations requiring a distributor’s license. As amended, a distributor must obtain a license for: (1) each location where a distributor receives or stores non-tax-paid cigarettes in this State; and (2) for a distributor that a delivery seller, if the location is different, each location from which the distributor ships delivery sales of cigarettes.

(Effective July 1, 2022; SB 105, s. 42.9.(d), S.L. 2021-180)

This subsection was amended to maintain the distinction between an out-of-state distributor authorized under G.S. 105-113.24 and an out-of-state delivery seller. An out-of-state distributor may obtain a license in accordance with G.S. 105-113.24. An out-of-state delivery seller must become licensed before making a sale as required by G.S. 105-113.4F.

(Effective July 1, 2022; SB 105, s. 42.9.(d), S.L. 2021-180)

This subsection was amended to clarify that a distributor who is a delivery seller must comply with the filing requirements set forth under both this subsection and G.S. 105-113.4F.

(Effective July 1, 2022; SB 105, s. 42.9.(e), S.L. 2021-180)

This subsection was amended to clarify that a person who is not a licensed distributor must submit a use tax report if the person acquired non-tax-paid cigarettes for sale, use, or consumption subject to the excise tax. This tax applies, for example, to persons receiving non-tax-paid cigarettes from a delivery seller who did not remit the tax to the Department.

(Effective July 1, 2022; SB 105, s. 42.9.(e), S.L. 2021-180)

This subsection was amended to clarify that the Department may require a shipping report from both a person who transports cigarettes or who causes to transport cigarettes upon the public highways, roads, or streets of this State. Other stylistic changes were made to this subsection.

(Effective July 1, 2022; SB 105, s. 42.9.(e), S.L. 2021-180)

This section was recodified as G.S. 105-113.4J with stylistic changes. This section is applicable to the entire Article but was misplaced within the structure of Article 2A. As recodified, this section is within “Part 1. General Provisions” of Article 2A.

(Effective January 1, 2022; SB 105, s. 42.13E.(d)-(e), S.L. 2021-180)

This section was recodified as G.S. 105-113.4K. This section is applicable to the entire Article but was misplaced within the structure of Article 2A. As recodified, this section is within “Part 1. General Provisions” of Article 2A.

(Effective January 1, 2022; SB 105, s. 42.13E.(f), S.L. 2021-180)

As a part of Session Law 2021-180, all statutes within Part 3 of Article 2A were repealed and rewritten. This document will note when the new statute is substantially similar to a statute that was repealed. References made in this document to “other tobacco products” is a reference to all tobacco products except for cigarettes. The following statutes are repealed effective July 1, 2022:

1. G.S. 105-113.35 
2. G.S. 105-113.35A 
3. G.S. 105-113.36 
4. G.S. 105-113.37 
5. G.S. 105-113.38 
6. G.S. 105-113.39 
7. G.S. 105-113.40A.

(Effective July 1, 2022; SB 105, s. 42.9.(f), S.L. 2021-180)

The table below identifies the sections or subsections repealed and the sections or subsections with substantially similar language.

(Effective July 1, 2022; SB 105, s. 42.9(f)-(g), S.L. 2021-180)

This new section was added to streamline the reference to the applicable tobacco products throughout Part 3. The term “tobacco product” when used in Part 3 means tobacco products other than cigarettes.

(Effective July 1, 2022; SB 105, s. 42.9.(g), S.L. 2021-180)

This new subsection imposes the excise tax on other tobacco products. It is substantially similar to G.S. 105-113.35(a)-(a1). However, subdivision (2) of subsection (a) places a cap on the excise tax of thirty cents (30¢) per cigar.

(Effective July 1, 2022; SB 105, s. 42.9.(g), S.L. 2021-180)

This new subsection clarifies the points of taxation for other tobacco products. It is substantially similar to G.S. 105-113.35(b). The clarification also incorporates the statutory calculus under Article 5 of Chapter 105 to determine whether a substantial nexus exists between a retailer dealer who make a delivery sale or remote sale and North Carolina. See generally South Dakota v. Wayfair, Inc., et al., 585 U. S. ___ (2018). If the delivery seller or remote seller would otherwise have to remit sales and use tax to North Carolina under Article 5, the delivery seller or remote seller must collect and remit the excise tax on cigarettes.

As clarified, a wholesale dealer or retail dealer who meets any of the following conditions is liable for the excise tax:

1. The dealer is the first person to possess or acquire other tobacco products in this State. 
2. The dealer is the first person to bring into this State other tobacco products made outside the State. 
3. The dealer is the original consignee of other tobacco products made outside the State that are shipped into the State. 
4. The dealer makes a delivery sale or remote sale of other tobacco products for which the dealer is required to collect sales and use tax under Article 5 of Chapter 105.

(Effective July 1, 2022; SB 105, s. 42.9.(g), S.L. 2021-180)

This new subsection imposes liability for the excise tax on a retail dealer who acquires non-excise- tax-paid other tobacco products from a wholesale dealer. It is substantially similar to G.S. 105-113.35(c).

(Effective July 1, 2022; SB 105, s. 42.9.(g), S.L. 2021-180)

This new subsection establishes exemptions for the excise tax. It is substantially similar to G.S. 105- 113.35(a2).

(Effective July 1, 2022; SB 105, s. 42.9.(g), S.L. 2021-180)

This new subsection imposes a use tax on non-excise-tax-paid other tobacco products. The use tax is levied on: (1) the sale or possession for sale of other tobacco products by a person other than a licensed wholesale dealer or a licensed retail dealer; and (2) upon the use, consumption, or possession for use or consumption of other tobacco products within this State. It is substantially similar to G.S. 105-113.35A.

(Effective July 1, 2022; SB 105, s. 42.9.(g), S.L. 2021-180)

This subsection was created to grant the Secretary the ability to determine the cost price of other tobacco products when the taxpayer cannot provide satisfactory documentation. The Secretary may determine a value based on the cost price of comparable items. 

(Effective July 1, 2022; SB 105, s. 42.9.(g), S.L. 2021-180)

This section establishes the manufacturer’s option to be relieved of paying the excise tax upon application to the Secretary and compliance with requirements prescribed by the Secretary. A manufacturer relieved from paying tax is not relieved from filing reports as required by this Article. This section is substantially similar to G.S. 105-113.35(d).

(Effective July 1, 2022; SB 105, s. 42.9.(g), S.L. 2021-180)

This section limits the ability to transfer non-excise-tax-paid other tobacco products between wholesale dealers. It also limits the ability to transfer non-tax-paid other tobacco products between integrated wholesale dealers. This section is substantially similar to G.S. 105-113.35(d1).

(Effective July 1, 2022; SB 105, s. 42.9.(g), S.L. 2021-180)

This subsection establishes the discount to wholesale dealers and retail dealers who file a timely report and send timely payment to the Department. The discount does not apply to vapor products. This subsection is substantially similar to G.S. 105-113.39(a).

(Effective July 1, 2022; SB 105, s. 42.9.(g), S.L. 2021-180)

This subsection establishes the required criteria for a wholesale dealer or retail dealer to be refunded excise tax remitted on other tobacco products that have become stale or otherwise unsalable. This subsection is substantially similar to G.S. 105-113.39(b).

(Effective July 1, 2022; SB 105, s. 42.9.(g), S.L. 2021-180)

This section establishes the requirements for remote sellers. These requirements are similar to requirements established for delivery sellers. Specifically, remote sellers must:

1. Obtain a license from the Secretary as required by Part 3 of Article 2A of Chapter 105 before accepting an order; and 
2. Report, collect, and remit to the Secretary all applicable taxes imposed under Part 3 of Article 2A and Article 5 of Chapter 105.

Also, similar to G.S. 105-113.4F(f), remote sellers who meet the definition of retailer under Article 5 of Chapter 105 are subject to the same State laws. 

(Effective July 1, 2022; SB 105, s. 42.9.(g), S.L. 2021-180)

This section establishes the record keeping requirements for remote sellers. Remote sellers, in addition to maintaining records in accordance with G.S. 105-113.4G, must maintain:

1. A list, updated annually, showing the cost price paid by the remote seller for each stock keeping unit of other tobacco products. 
2. Invoices documenting remote or delivery sales to consumers in this State. 
3. Records necessary to document the cost price of purchases of all other tobacco products sold to consumers in this State.

(Effective July 1, 2022; SB 105, s. 42.9.(g), S.L. 2021-180)

This section establishes the penalties for failure to comply with remote seller requirements under G.S. 105-113.38A. A remote seller who fails to comply with G.S. 105-113.38A is subject to the following penalties:

1. For the first violation, a penalty of one thousand dollars ($1,000). 
2. For a subsequent violation, a penalty not to exceed five thousand dollars ($5,000), as determined by the Secretary.

(Effective July 1, 2022; SB 105, s. 42.9.(g), S.L. 2021-180)

This section establishes the renewable license requirements for wholesale dealers and retail dealers and the effective dates of a license. It also establishes the ability for an out-of-state wholesale dealer who is not a delivery seller or remote seller to obtain a license upon compliance with subsection (c) of this section.

This statute also clarifies the locations requiring a license. G.S. 105-113.36 did not provide clear guidance on the locations required to be licensed for retail dealers who make a delivery sale. As amended a wholesale dealer and retail dealer must obtain a license for:

1. Each location where a wholesale dealer makes tobacco products; 
2. Each location where a wholesale dealer or a retail dealer receives or stores non-excise-tax-paid tobacco products; and 
3. Each location from where a retail dealer that is a delivery seller or remote seller ships delivery sales or remote sales if the location is a location other than the location described above.

This section is substantially similar to G.S. 105-113.36.

(Effective July 1, 2022; SB 105, s. 42.9.(g), S.L. 2021-180)

This section establishes the filing and payment requirements for wholesale dealers and retail dealers, imposes a new due date for persons subject to the use tax, and provides other clarifications to the previous law.

Subsection (b) establishes the use tax for other tobacco products. The use tax applies to a person without a wholesale dealer license or retail dealer license who acquire non-excise-tax-paid other tobacco products for sale, use, or consumption. Previously, persons subject to the use were required to file a report and remit tax within 20 days after the end of the month covered by the report. However, to mirror requirements for the use tax on cigarettes, the person must pay and remit tax within 96 hours after receipt of the other tobacco products. This tax applies, for example, to persons receiving non-excise-tax-paid other tobacco products from a remote seller or delivery seller who did not remit the tax to the Department.

Subsection (c) clarifies the previous language in G.S. 105-113.37(d). Specifically, the Department may require a shipping report from both a person who transports other tobacco products or who causes to transport other tobacco products upon the public highways, roads, or streets of this State.

This section is substantially similar to G.S. 105-113.37(a) and G.S. 105-113.37(d).

(Effective July 1, 2022; SB 105, s. 42.9.(g), S.L. 2021-180)

This section requires wholesaler dealers and retail dealers to obtain a bond or an irrevocable letter of credit. This section is substantially similar to G.S. 105-113.38.

(Effective July 1, 2022; SB 105, s. 42.9.(g), S.L. 2021-180)

This section provides for the allocation of other tobacco tax receipts. G.S. 105-113.39 previously served this function and provided for the following allocation: (1) 3% of the cost price of other tobacco products to the General Fund; (2) an equivalent amount of revenue generated from the tax on vapor products to the General Fund; and (3) the remaining receipts to the University Cancer Research Fund.

This new section modifies the allocation previously provided in G.S. 105-113.39 to the following for tax receipts of other tobacco products: (1) Six and four-tenths percent (6.4%) to the University Cancer Research Fund; and (2) all remaining funds to the General Fund.

According to the Legislative Fiscal Note (Senate Bill 105 (Fourth Edition)), the new allocation was designed “to hold [the University Cancer Research] Fund’s revenue stable” due to the expansion of tax receipts from remote sales of cigars from out of state remote sellers.

(Effective July 1, 2022; SB 105, s. 42.9.(g), S.L. 2021-180)

This section previously required ABC permittees to obtain a local license from the city and county in which the permittee is located for activity authorized by the ABC permit. It further prohibited a county from issuing a county license until the ABC permittee had obtained the permittee’s local license from the city. These requirements were modified by amending subsection (a) to reference the new authority granted in G.S. 105-113.71(c). G.S. 105-113.71(c) created an exception by allowing enumerated municipalities the discretion to not require a local license.

(Effective October 1, 2021; HB 890, s. 4.1, S.L. 2021-150)

Subsection (b)’s catchline was amended to clarify that the exceptions under this subsection are limited to unfortified wine.

Subsection (c) was added allowing enumerated municipalities the discretion to decline to require a city or county license for activity authorized by an ABC permit. At the time subsection (c) was added, the Town of Cary is the only municipality granted this discretion. The section’s catchline “Local government may refuse to issue” was amended to “Nonissuance of license” to capture the broadening of the statutory provisions regarding the ability for a municipality to choose not to issue a local license.

(Effective October 1, 2021; HB 890, s. 4.2, S.L. 2021-150)

This subsection was amended to clarify that a person holding an ABC permit listed under this subsection is not required to obtain a license from a city or remit tax due to a city who has elected to decline to require a license pursuant to G.S. 105-113.71(c).

(Effective October 1, 2021; HB 890, s. 4.3, S.L. 2021-150)

This subdivision was created to add nonresident spirituous liquor vendors as a permittee who must register with the Secretary.

(Effective October 1, 2021; HB 890, s. 6.2, S.L. 2021-150)

This section was amended to improve readability and allow a wholesaler to remit the excise tax that would have otherwise been due by the brewery or winery.

Under subsection (b) of this section, the language applicable to wine shipper permittees was in two distinct places within the subsection. To improve readability, the language was re-written and placed into its own subsection, subsection (b3).

Subsection (b1) was added to reflect practices within the industry. A brewery or a winery may be relieved of remitting the excise tax if all of the following apply:

1. The brewery or winery holds a permit issued under G.S. 18B-1101, 18B-1102, or 18B-1104. 
2. The brewery or winery transfers malt beverages or wine to a wholesaler permitted under G.S. 18B-1107 or G.S. 18B-1109. 
3. The wholesaler agrees in writing to be responsible for the tax due on the transferred malt beverages or wine. 
4. The brewery or winery files a report when the tax would otherwise be due reporting the transfer of malt beverages or wine to the wholesaler.

Subsection (b2) was added to impose excise tax liability on a wholesaler when a brewery or winery was relieved of remitting tax under subsection (b1) of this section.

(Effective November 18, 2021; SB 105, s. 42.13E.(g), S.L. 2021-180)

This section was amended expanding the authority for the Secretary to require a distillery to obtain bond or an irrevocable letter of credit. This statute also contains clarifying and stylistic changes.

Subsection (a) was subdivided to improve readability. All language originally under subsection (a) regarding periodically review of bonds was moved to a new subsection: (a2). “Periodic Review” was added as the catchline. Consistent with 17 NCAC 04E .0601 in calculating the amount of the bond based on previous tax due, subsection (a) was also amended to remove reference to anticipated tax liability.

Subsection (a1) was added allowing the Secretary to require a distillery to obtain a bond in an amount not to be less than two thousand dollars ($2,000).

Subsection (c) was amended to allow a distillery to substitute an irrevocable letter of credit for a bond.

(Effective November 18, 2021; SB 105, s. 42.13E.(h), S.L. 2021-180)

This section was amended to clarify penalties under Article 36B for failure to pay tax when due and to clarify the authority for the Secretary to reduce or waive a penalty.

This section was amended to clarify penalties under Article 36B for failure to pay tax when due and to clarify the authority for the Secretary to reduce or waive a penalty.

To more closely align with G.S. 105-449.57, subsection (d1) was added to clarify the authority for the Secretary to assess failure to pay tax due penalty consistent with R1220 of the Articles of Agreement promulgated by International Fuel Tax Association, Inc. It further makes clear that the penalty imposed under this subsection is distinct from the failure to pay tax penalty under G.S. 105-236(a)(4).

Subsection (d2) was added to clarify the authority for the Secretary to reduce or waive the penalty imposed under this subsection. It provides parity with other statutes in Article 36B and Article 36C that cite to this authority.

(Effective November 18, 2021; SB 105, s. 42.13E.(j), S.L. 2021-180)

This section was added to streamline the license revocation and hearing processes providing consistency for all license revocations initiated by the Department. This includes license revocations under Article 2A (Tobacco Products), Article 2C (Alcoholic Beverages), Article 36B (Motor Carrier), Article 36C (Motor Fuel), Article 36D (Alternative Fuel), and Chapter 119 (Gasoline and Oil Inspection).

Previously, consistent with G.S. 105-449.57, the Department administered appeals in accordance with R1400 of the International Fuel Tax Agreement. R1400 provided a licensee an opportunity for a hearing only after the license was revoked. It also only allowed 30 days for the licensee to submit a written hearing request.

As amended, the Department must send the licensee a notice of proposed revocation and provide the licensee an opportunity to request a hearing to contest the revocation. The licensee must file a written hearing request within 45 days of the date the notice of proposed revocation. If the licensee does not file a timely hearing request, the license will be revoked as provided in the proposed revocation and the revocation is not subject to further review. If the licensee files a timely hearing request, the licensee will be provided 20 days’ written notice of the hearing, and the hearing will be conducted as prescribed by the Secretary.

If the Department revokes the license, the former licensee must return all licenses issued to the licensee within 10 days of the issuance of the Department’s final decision. If the licenses or decals are not returned, the credentials are subject to seizure or removal from the motor vehicle or defacement. If a license or decal is unable to be returned, the former licensee must include a written statement of the reasons, satisfactory to the Secretary, why the license or decal cannot be returned. This section has also been amended to change the means of communications regarding revocations and hearings. All notices may now be delivered in accordance with G.S. 105-241.20(b) (e.g., United States mail). The licensee may also consent to receive notices via electronic means such as electronic mail.

(Effective January 1, 2022; SB 105, s. 42.13D.(b), S.L. 2021-180)

Ethanol meeting the standard for the American Society Testing Materials Specification D 4806, "Standard Specification for Denatured Fuel Ethanol for Blending with Gasolines for Use as Automotive Spark-Ignition Engine Fuel," or ethanol, regardless of how it was produced, denatured in accordance with 27 C.F.R. § 19.746 as of January 1, 2021.

(Effective January 1, 2021; SB 105, s. 42.13E.(k), S.L. 2021-180)

This subsection was amended to clarify the definition of gasohol. Gasohol, as amended, is a “blended fuel composed of gasoline and fuel alcohol or gasoline and ethanol.”

(Effective January 1, 2022; SB 105, s. 42.13E.(k), S.L. 2021-180)

This section was re-written to streamline the license revocation and hearing processes providing consistency for all license revocations initiated by the Department. This includes license revocations under Article 2A (Tobacco Products), Article 2C (Alcoholic Beverages), Article 36B (Motor Carrier), Article 36C (Motor Fuel), Article 36D (Alternative Fuel), and Chapter 119 (Gasoline and Oil Inspection).

Previously, the Department was required to hold a hearing to determine whether a person licensed under Article 36C or Article 36D committed an act that would authorize the Department to permanently revoke the license.

As amended, for a summary revocation, the Secretary must notify the licensee of the revocation and hold a hearing within 10 days. The licensee may request to continue the hearing if the licensee notifies the Department before the day of the hearing. A hearing will be conducted as prescribed by the Secretary, and the Secretary must issue a final decision within 10 days of the hearing. When the Secretary summarily revokes the license, the revocation remains in effect pending the hearing decision.

As amended, for a non-summary revocation, the Department must send the licensee a notice of proposed revocation and provide the licensee an opportunity to request a hearing to contest the revocation. The licensee must file a written hearing request within 45 days of the date the notice of proposed revocation. If the licensee does not file a timely hearing request, the license will be revoked as provided in the proposed revocation and the revocation is not subject to further review. If the licensee files a timely hearing request, the licensee will be provided 20 days’ written notice of the hearing, and the hearing will be conducted as prescribed by the Secretary.

If the Department revokes the license, the former licensee must return all licenses issued to the licensee within 10 days of the issuance of the Department’s final decision. If a license is unable to be returned, the former licensee must include a written statement of the reasons, satisfactory to the Secretary, why the license cannot be returned.

This section has also been amended to change the means of communications regarding revocations and hearings. All notices may now be delivered in accordance with G.S. 105-241.20(b) (United States mail). The licensee may also consent to receive notices via electronic means such as electronic mail.

Note that pursuant to G.S. 105-449.134, persons licensed under Article 36D are subject to the same revocation and hearing procedures as provided in Article 36C.

(Effective January 1, 2022; SB 105, s. 42.13D.(c), S.L. 2021-180)

Subsection (d) and subsection (e) of this section contain clarifying and stylistic changes for diversions of applicable motor fuel by railroad tank car or transport truck.

Subsection (d) sets forth the requirements of persons transporting applicable motor fuel by railroad tank car or transport truck. Subdivision (2a) was added to subsection (d) to clarify that these persons must maintain a copy of the shipping document at a centralized place of business for at least three years from the date of delivery. This matches the record keeping requirements for persons transporting motor fuel by tank wagon.

Subdivision (3) of subsection (d) was amended throughout for clarity. The two most significant clarifications are as follows: (1) the transporter must “[c]ontemporaneously” note on the shipping document the change in destination state and the confirmation number the person received from the Secretary; and (2) the transporter must “[u]pon delivery” provide a copy of the shipping document to the person receiving shipment.

Subsection (e) sets forth the requirements of persons receiving applicable motor fuel delivered by railroad tank car or transport truck. The subsection was amended throughout for clarity. The amended language clarifies that a person receiving motor fuel may only accept the fuel if the destination state is North Carolina or the shipping document has been changed to North Carolina in accordance with subdivision (3) of subsection (d). Specifically, a shipping document where the destination state was changed to North Carolina must contain a diversion number from the Secretary.

(Effective November 18, 2021; SB 105, s. 42.13E.(l), S.L. 2021-180)

This section was amended to add duties to: (1) tank wagon operators who transport motor fuel; and (2) persons receiving motor fuel from a tank wagon. The duties mirror the requirements under G.S. 105-449.115 (d) and G.S. 105-449.115 (e).

Subsection (b) was amended to require the tank wagon operator to deliver motor fuel to the destination on the shipping document unless the operator does all of the following:

1. Notifies the Secretary before transporting the motor fuel into a state other than the state designated on the shipping document. 
2. Receives from the Secretary a confirmation number authorizing the shipment of motor fuel to a state other than the state designated on the shipping document. 
3. Contemporaneously writes on the shipping document the change in destination state and the diversion number received from the Secretary.

Subsection (b) was also amended requiring the tank wagon operator upon delivery, provide a copy of the shipping document to the person to whom the motor fuel is delivered.

Subsection (b1) was added and imposes additional duties on persons receiving motor fuel from tank wagons. The person receiving shipment may only accept delivery of the motor fuel if: (1) the destination state on the shipping document is North Carolina; or (2) the destination state on the shipping document was changed to North Carolina and the diversion number was recorded on the shipping document. The person receiving shipment must also maintain a copy of the shipping document for at least three years from the date of delivery and must maintain a copy of the shipping document at the place of business where the motor fuel was delivered for 90 days from the date of delivery.

If a person receiving shipment fails to comply with subsection (b1), the person is jointly and severally liable for any tax due on the fuel.

(Effective November 18, 2021; SB 105, s. 42.13E.(m), S.L. 2021-180)

This section was amended to change the civil penalty structure for a retailer’s failure to mark dyed motor fuel storage. A dyed motor fuel retail who stores both dyed and undyed motor fuel must mark the storage facility in accordance with this section. Previously, the civil penalty was calculated on the capacity of the storage tank. As amended, “a person who fails to mark the storage facility as required by subsection (a) of this section is subject to a civil penalty of two hundred fifty dollars ($250.00). Each inspection that results in a finding of noncompliance constitutes a separate and distinct offense.”

(Effective January 1, 2022; SB 105, s. 42.13E.(n), S.L. 2021-180)

This section was re-written to streamline the license revocation and hearing processes providing consistency for all license revocations initiated by the Department. This includes license revocations under Article 2A (Tobacco Products), Article 2C (Alcoholic Beverages), Article 36B (Motor Carrier), Article 36C (Motor Fuel), Article 36D (Alternative Fuel), and Chapter 119 (Gasoline and Oil Inspection).

Previously, the Department was required to hold a hearing to determine whether a person licensed under Article 36C, Article 36D, or Article 3 of Chapter 119 committed an act that would authorize the Department to permanently revoke the license.

As amended, for a summary revocation, the Secretary must notify the licensee of the revocation and hold a hearing within 10 days. The licensee may request to continue the hearing if the licensee notifies the Department before the day of the hearing. A hearing will be conducted as prescribed by the Secretary, and the Secretary must issue a final decision within 10 days of the hearing. When the Secretary summarily revokes the license, the revocation remains in effect pending the hearing decision.

As amended, for a non-summary revocation, the Department must send the licensee a notice of proposed revocation and provide the licensee an opportunity to request a hearing to contest the revocation. The licensee must file a written hearing request within 45 days of the date the notice of proposed revocation. If the licensee does not file a timely hearing request, the license will be revoked as provided in the proposed revocation and the revocation is not subject to further review. If the licensee files a timely hearing request, the licensee will be provided 20 days’ written notice of the hearing, and the hearing will be conducted as prescribed by the Secretary.

If the Department revokes the license, the former licensee must return all licenses issued to the licensee within 10 days of the issuance of the Department’s final decision. If a license is unable to be returned, the former licensee must include a written statement of the reasons, satisfactory to the Secretary, why the license cannot be returned.

This section has also been amended to change the means of communications regarding revocations and hearings. All notices may now be delivered in accordance with G.S. 105-241.20(b) (e.g., United States mail). The licensee may also consent to receive notices via electronic means such as electronic mail.

(Effective January 1, 2022; SB 105, s. 42.13D.(d), S.L. 2021-180)