Who Really Put the Tax Burden on the Poor?

Joe Hackney
Speaker

William L. Wainwright
Speaker Pro Tem

Denise Weeks,   House Principal Clerk

INCREASE SALES AND USE TAX BY ONE PERCENT

SECTION 27A.2.(a) Notwithstanding G.S.   105-164.4(a), the general rate of tax for sales made on or after September 1,   2009, and before October 1, 2009, is five and one-half percent (5.5%).

SECTION 27A.2.(b) The introductory language of   G.S. 105-164.4(a) reads as rewritten:

“(a) A privilege tax is imposed on a retailer at the   following percentage rates of the retailer’s net taxable sales or gross   receipts, as appropriate. The general rate of tax is four and three-quarters   percent (4.75%).five and three-quarters percent (5.75%).”

SECTION 27A.2.(c) G.S. 105-164.44F(a) reads as   rewritten:

“(a) Amount. – The Secretary must distribute part of   the taxes imposed by G.S. 105-164.4(a)(4c) on telecommunications service and   ancillary service. The Secretary must make the distribution within 75 days   after the end of each calendar quarter. The amount the Secretary must   distribute is the following percentages of the net proceeds of the taxes   collected during the quarter:

(1) Eighteen and seventy one hundredths percent (18.70%)   Sixteen and thirty-six hundredths percent (16.36%) minus two million six   hundred twenty thousand nine hundred forty-eight dollars ($2,620,948), must   be distributed to cities in accordance with this section. The deduction is   one-fourth of the annual amount by which the distribution to cities of the   gross receipts franchise tax on telephone companies, imposed by former G.S.   105-20, was required to be reduced beginning in fiscal year 1995-96 as a   result of the “freeze deduction.”

(2) Seven and seven tenths percent (7.7%) Six and   seventy-four hundredths percent (6.74%) must be distributed to counties and   cities as provided in G.S. 105-164.44I.”

SECTION 27A.2.(d) G.S. 105-164.44I(a) reads as   rewritten:

“(a) Distribution. – The Secretary must distribute to   the counties and cities part of the taxes imposed by G.S. 105-164.4(a)(4c) on   telecommunications service and G.S. 105-164.4(a)(6) on video programming   service. The Secretary must make the distribution within 75 days after the   end of each calendar quarter. The amount the Secretary must distribute   SL2009-0451 Session Law 2009-451 Page 219 is the sum of the revenue listed in   this subsection. The Secretary must distribute two million dollars   ($2,000,000) of this amount in accordance with subsection (b) of this section   and the remainder in accordance with subsections (c) and (d) of this section.   The revenue to be distributed under this section consists of the following:

(1) The amount specified in G.S. 105-164.44F(a)(2).

(2) Twenty three and six tenths percent (23.6%) Twenty and   sixty-five hundredths percent (20.65%) of the net proceeds of the taxes   collected during the quarter on video programming, other than on   direct-to-home satellite service.

(3) Thirty-seven and one tenths percent (37.1%) Thirty-two   and forty-six hundredths percent (32.46%) of the net proceeds of the taxes   collected during the quarter on direct-to-home satellite service.”

SECTION 27A.2.(e) This section does not apply to   construction materials purchased to fulfill a lump-sum or unit-price contract   entered into or awarded before the effective date of the increase or entered   into or awarded pursuant to a bid made before the effective date of the   increase when the construction materials would otherwise be subject to the   increased rate of tax provided in this section.

SECTION 27A.2.(f) Subsections (a) and (e) of   this section are effective when they become law. The remainder of this   section becomes effective October 1, 2009. Subsection (b) applies to sales   made on or after October 1, 2009, and subsections (c) and (d) apply to   distributions for months beginning on or after October 1, 2009. Subsections   (b) through (d) of this section expire July 1, 2011. This section does not   affect the rights or liabilities of the State, a taxpayer, or another person   arising under a statute amended or repealed by this section before the   effective date of its amendment or repeal; nor does it affect the right to   any refund or credit of a tax that accrued under the amended or repealed statute   before the effective date of its amendment or repeal.