2022 General Administration Law Changes

This subdivision was amended by the 2021 General Assembly to include additional licensees subject to the one thousand dollar ($1,000) penalty provision. As amended, if a person required to be licensed under Article 2A (the Tobacco Products Tax Act) fails to become licensed after written notification by the Department, the person is subject to a one thousand dollar ($1,000) penalty.

Note that there is a different penalty structure under Article 2A for delivery sellers and remote sellers who fail to obtain a license before accepting an order. See G.S. 105- 113.4F, 105-113.38C.

(Effective January 1, 2022 and applies to penalties assessed on or after that date; SB 105, s. 42.13E.(i), S.L. 2021-180.)

In general, subdivision (4) requires the Department to assess a penalty for failure to pay tax when due if the tax shown due on a return is not paid by the due date of the return. The 2021 General Assembly enacted legislation to change the calculation of the penalty from a flat rate of ten percent (10%) to a graduated rate (two percent, 2%, for the first month the tax is not paid, increased by two percent, 2%, for each succeeding month, not to exceed ten percent, 10%.) The change was to be effective for taxes assessed on or after July 1, 2022. The 2022 General Assembly amended this subdivision to:

(1) Continue the current penalty rate of ten percent (10%) through December 2022; 
(2) Temporarily reduce the penalty rate to five percent (5%) from January 2023 to June 2024; and 
(3) Reintroduce the graduated penalty rate in July 2024.

(Effective June 30, 2022; HB 83, s. 5.6.(a), S.L. 2022-13. Effective January 1, 2023, and applies to tax assessed on or after that date; H83, s. 5.6.(b), S.L. 2022-13. Effective July 1, 2024, and applies to tax assessed on or after that date; H83 s. 5.6,(c), S.L. 2022-13.)

This subdivision was amended to clarify that the informational return penalties provided in G.S. 105- 236(b) apply to both an informational return and an informational report.

(Effective June 29, 2022; HB 83, s. 5.1., S.L. 2022-13.)

This subsection defines the general statute of limitations for a refund of an overpayment of tax. Subdivision (2) of this subsection was amended to provide that the amount refunded cannot exceed the portion of the tax paid during the two years immediately preceding the taxpayer's request for refund.

(Effective June 29, 2022; HB 83, s. 5.2., S.L. 2022-13.)

This subsection was amended to add “proposed revocation of a certificate of registration” to the list of proposed Departmental actions discussed regarding what occurs when a taxpayer requests review of an action by the Department but then fails to respond or act within the required time frame. Prior to the amendment, the statute only included a proposed assessment or denial of a refund.

(Effective June 29, 2022; HB 83, s. 5.3., S.L. 2022-13.)

This sub-subdivision was amended to clarify that the date the final return was due to be filed for the purposes of calculating interest on an overpayment of tax is to be determined without regard to an extension.

(Effective June 29, 2022, and applies to refunds issued on or after that date; HB 83, s. 5.4.(a), S.L. 2022-13.)

This subsection was amended to clarify that an extension of time granted by the Internal Revenue Service because of a presidentially declared disaster under section 7508A of the Code only applies to the corresponding state tax return or payment. In addition, for state returns and payments without a corresponding federal return and payment, the extension granted for individual income tax returns and payments by the Internal Revenue Service under section 7508A of the Code applies.

(Effective June 29, 2022; HB 83, s. 5.5.(a), S.L. 2022-13.)

This section was amended by the 2021 General Assembly to remove all language referring to the “Section of Community Corrections of the Division of Adult Correction and Juvenile Justice of the Department of Public Safety” and replace with “Division of Community Supervision and Reentry of the Department of Adult Correction.” This change was made to refer to the new name of this division.

(Effective January 1, 2023; SB 105, s. 19C.9.(v1), S.L. 2021-180.)

This subsection was amended to clarify that the automatic extension of time granted for filing a North Carolina return when an extension is granted by the Internal Revenue Service only applies to extension applications filed by a taxpayer with the Commissioner of Internal Revenue. The automatic extension does not apply to extensions granted under section 7508A of the Code because of a presidentially declared disaster.

(Effective June 29, 2022; HB 83, s. 5.5.(b), S.L. 2022-13.)