Bill Text: NC H398 | 2017-2018 | Regular Session | Amended


Bill Title: Brunswick County/Municipal Meals Taxes

Spectrum: Bipartisan Bill

Status: (Introduced - Dead) 2017-05-26 - Re-ref Com On Finance [H398 Detail]

Download: North_Carolina-2017-H398-Amended.html

GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2017

H                                                                                                                                                    1

HOUSE BILL 398

 

 

Short Title:      Brunswick County/Municipal Meals Taxes.

(Local)

Sponsors:

Representatives Iler and Butler (Primary Sponsors).

For a complete list of sponsors, refer to the North Carolina General Assembly web site.

Referred to:

State and Local Government I, if favorable, Finance

March 20, 2017

A BILL TO BE ENTITLED

AN ACT to authorize Brunswick County or THE municipalities located therein to levy a prepared food and beverages tax.

The General Assembly of North Carolina enacts:

SECTION 1.(a)  Authority. The Board of Commissioners of Brunswick County may levy a prepared food and beverages tax of up to one‑half percent (0.5%) of the sales price of prepared food and drink sold within the county, including all municipalities located there, at retail for consumption on or off the premises by a retailer subject to sales tax under G.S. 105‑164.4(a)(1) upon the occurrence of an action listed in this subsection. For purposes of catering, the tax applies to food served in the town without regard to the residency of the caterer. This tax is in addition to State and local sales tax. The occurrences on which the county may levy the tax are as follows:

(1)        The Board of County Commissioners, by resolution and after not less than 10 days' public notice and a public hearing, levies the tax.

(2)        The majority of those voting in a referendum held pursuant to this act vote for the levy of the tax and the Board of Commissioners, by resolution, levies the tax. If pursuant to this subdivision, the Board of County Commissioners shall direct the county board of elections to conduct an advisory referendum within the county on the question of whether to levy a local prepared food tax in the taxing unit as provided in this act. The election shall be held in accordance with the procedures of G.S. 163‑287. The form of the question to be presented on a ballot for a special election concerning the levy of the tax authorized by this act shall be:

"[ ] FOR          [ ] AGAINST

One‑half percent (0.5%) local prepared food tax, in addition to the current local sales and use taxes."

SECTION 1.(b)  Definitions. The definitions in G.S. 105‑164.3 apply to this section to the extent they are not inconsistent with the provisions of this section. In addition, the following definitions apply in this act:

(1)        County. Defined in G.S. 153A‑1.

(2)        Net proceeds. Gross proceeds less the cost to the town of administering and collecting the tax.

(3)        Prepared food and beverages. The term includes the following:

a.         Prepared food, as defined in G.S. 105‑164.3.

b.         An alcoholic beverage, as defined in G.S. 18B‑101.

SECTION 1.(c)  Exemptions. The prepared food and beverages tax does not apply to the following sales of prepared food and beverages:

(1)        Prepared food and beverages served to residents in boardinghouses and sold together on a periodic basis with rental of a sleeping room or lodging.

(2)        Retail sales exempt from taxation under G.S. 105‑164.13.

(3)        Retail sales through or by means of vending machines.

(4)        Prepared food and beverages served by a retailer subject to the local occupancy tax if the charge for the prepared food and beverages is included in a single, nonitemized sales price together with the charge for rental of a room, lodging, or accommodation furnished by the retailer.

(5)        Prepared food and beverages furnished without charge by an employer to an employee.

(6)        Retail sales by grocers or by grocery sections of supermarkets or other diversified retail establishments, other than sales of prepared food and beverages in the delicatessen or similar department of the grocer or grocery section.

(7)        Prepared food and beverages served on a federal military reservation.

SECTION 1.(d)  Collection. Every retailer subject to the tax levied under this section shall, on and after the effective date of the levy of the tax, collect the tax. This tax shall be collected as part of the charge for furnishing prepared food and beverages. The tax shall be stated separately on the sales document and shall be paid by the purchaser to the retailer as trustee for and on account of the county. The tax shall be added to the sales price and shall be passed on to the purchaser instead of being borne by the retailer. The entity collecting the tax shall design, print, and furnish to all appropriate businesses and persons in the county the necessary forms for filing returns and instructions to ensure the full collection of the tax.

SECTION 1.(e)  Administration. The county shall administer the tax levied under this section. A tax levied under this section is due and payable to the local finance officer in monthly installments on or before the 20th day of the month following the month in which the tax accrues. Every retailer liable for the tax shall, on or before the 20th day of each month, prepare and render a return on a form prescribed by the county. The return shall show the total gross receipts derived in the preceding month from sales to which the tax applies.

A return filed under this section is not a public record and may not be disclosed except in accordance with G.S. 153A‑148.1.

The provisions of Article 5 and Article 9 of Chapter 105 of the General Statutes apply to this section to the extent they are not inconsistent with the provisions of this section. The uniform meals tax penalty provisions of G.S. 153A‑154.1 apply to a tax levied under this section.

SECTION 1.(f)  Refunds. The county shall refund to a nonprofit or governmental entity the prepared food and beverages tax paid by the entity on eligible purchases of prepared food and beverages. A nonprofit or governmental entity's purchase of prepared food and beverages is eligible for a refund under this subsection if the entity is entitled to a refund under G.S. 105‑164.14(b) or (c) of local sales and use tax paid on the purchase or if the sale is exempt under G.S. 105‑164.13. The time limitations, application requirements, penalties, and restrictions provided in G.S. 105‑164.14(b), (d), and (d1) apply to refunds to nonprofit entities; the time, limitations, application requirements, penalties, and restrictions provided in G.S. 105‑164.14(c), (d), and (d1) apply to refunds to governmental entities. When an entity applies for a refund of the prepared food and beverages tax paid by it on purchases, it shall attach to its application a copy of the application submitted to the Department of Revenue under G.S. 105‑164.14 for a refund of the sales and use tax on the same purchases or a written statement that the purchases were exempt from the tax. An applicant for a refund under this subsection shall provide any information required by the county to substantiate the claim.

SECTION 1.(g)  Use of Proceeds. The proceeds of a tax levied under this section shall be used as provided in this subsection. The county may deduct from the gross proceeds of the taxes collected under this act an amount not to exceed three percent (3%) of the gross proceeds to pay for the direct cost of administering and collecting the taxes. The remaining proceeds shall be used for beach nourishment or to construct and improve public infrastructure and facilities or both.

SECTION 1.(h)  Effective Date of Levy. A tax levied under this section shall become effective on the date specified in the resolution levying the tax. The date shall be the first day of a calendar month and may not be before the first day of the fourth month after the date the resolution is adopted.

SECTION 1.(i)  Repeal. A tax levied under this section may be repealed or reduced by a resolution adopted by the governing body of a municipality. Any repeal or reduction shall become effective on the first day of a month and may not become effective until the end of the fiscal year in which the repeal resolution is adopted. Repeal or reduction of a tax levied under this section does not affect a liability for a tax that attached before the effective date of the repeal or reduction, nor does it affect a right to a refund of a tax that accrued before the effective date of the repeal or reduction.

SECTION 2.(a)  Authority. Provided the tax authorized in Section 1 of this act is not in effect, the governing body of a municipality in Brunswick County may levy a prepared food and beverages tax of up to one‑half percent (0.5%) of the sales price of prepared food and drink sold within the municipality at retail for consumption on or off the premises by a retailer subject to sales tax under G.S. 105‑164.4(a)(1) upon the occurrence of an action listed in this subsection. For purposes of catering, the tax applies to food served in the town without regard to the residency of the caterer. This tax is in addition to State and local sales tax. The occurrences on which the municipality may levy the tax are as follows:

(1)        The governing body of the municipality, by resolution and after not less than 10 days' public notice and a public hearing, levies the tax.

(2)        The majority of those voting in a referendum held pursuant to this act vote for the levy of the tax and the governing body of the municipality, by resolution, levies the tax. If pursuant to this subdivision, the governing body shall direct the county board of elections to conduct an advisory referendum in the municipality on the question of whether to levy a local prepared food tax in the taxing unit as provided in this act. The election shall be held in accordance with the procedures of G.S. 163‑287. The form of the question to be presented on a ballot for a special election concerning the levy of the tax authorized by this act shall be:

"[ ] FOR          [ ] AGAINST

One‑half percent (0.5%) local prepared food tax, in addition to the current local sales and use taxes."

SECTION 2.(b)  Definitions. The definitions in G.S. 105‑164.3 apply to this section to the extent they are not inconsistent with the provisions of this section. In addition, the following definitions apply in this act:

(1)        Net proceeds. Gross proceeds less the cost to the town of administering and collecting the tax.

(2)        Prepared food and beverages. The term includes the following:

a.         Prepared food, as defined in G.S. 105‑164.3.

b.         An alcoholic beverage, as defined in G.S. 18B‑101.

SECTION 2.(c)  Exemptions. The prepared food and beverages tax does not apply to the following sales of prepared food and beverages:

(1)        Prepared food and beverages served to residents in boardinghouses and sold together on a periodic basis with rental of a sleeping room or lodging.

(2)        Retail sales exempt from taxation under G.S. 105‑164.13.

(3)        Retail sales through or by means of vending machines.

(4)        Prepared food and beverages served by a retailer subject to the local occupancy tax if the charge for the prepared food and beverages is included in a single, nonitemized sales price together with the charge for rental of a room, lodging, or accommodation furnished by the retailer.

(5)        Prepared food and beverages furnished without charge by an employer to an employee.

(6)        Retail sales by grocers or by grocery sections of supermarkets or other diversified retail establishments, other than sales of prepared food and beverages in the delicatessen or similar department of the grocer or grocery section.

(7)        Prepared food and beverages served on a federal military reservation.

SECTION 2.(d)  Collection. Every retailer subject to the tax levied under this section shall, on and after the effective date of the levy of the tax, collect the tax. This tax shall be collected as part of the charge for furnishing prepared food and beverages. The tax shall be stated separately on the sales document and shall be paid by the purchaser to the retailer as trustee for and on account of the municipality. The tax shall be added to the sales price and shall be passed on to the purchaser instead of being borne by the retailer. The entity collecting the tax shall design, print, and furnish to all appropriate businesses and persons in the town the necessary forms for filing returns and instructions to ensure the full collection of the tax.

SECTION 2.(e)  Administration. The municipality may enter into an agreement with Brunswick County for the administration and collection of the tax levied under this section. In the absence of an agreement, the municipality shall administer the tax levied under this section. A tax levied under this section is due and payable to the local administering authority as agent for the taxing entity in monthly installments on or before the 20th day of the month following the month in which the tax accrues. Every retailer liable for the tax shall, on or before the 20th day of each month, prepare and render a return on a form prescribed by the municipality or, at the municipality's direction, the entity administering and collecting the tax. The return shall show the total gross receipts derived in the preceding month from sales to which the tax applies.

A return filed under this section is not a public record and may not be disclosed except in accordance with G.S. 160A‑208.1.

The provisions of Article 5 and Article 9 of Chapter 105 of the General Statutes apply to this section to the extent they are not inconsistent with the provisions of this section. The uniform meals tax penalty provisions of G.S. 160A‑214.1 apply to a tax levied under this section.

SECTION 2.(f)  Refunds. The entity administering the tax shall refund to a nonprofit or governmental entity the prepared food and beverages tax paid by the entity on eligible purchases of prepared food and beverages. A nonprofit or governmental entity's purchase of prepared food and beverages is eligible for a refund under this subsection if the entity is entitled to a refund under G.S. 105‑164.14(b) or (c) of local sales and use tax paid on the purchase or if the sale is exempt under G.S. 105‑164.13. The time limitations, application requirements, penalties, and restrictions provided in G.S. 105‑164.14(b), (d), and (d1) apply to refunds to nonprofit entities; the time, limitations, application requirements, penalties, and restrictions provided in G.S. 105‑164.14(c), (d), and (d1) apply to refunds to governmental entities. When an entity applies for a refund of the prepared food and beverages tax paid by it on purchases, it shall attach to its application a copy of the application submitted to the Department of Revenue under G.S. 105‑164.14 for a refund of the sales and use tax on the same purchases or a written statement that the purchases were exempt from the tax. An applicant for a refund under this subsection shall provide any information required by the entity administering the tax to substantiate the claim.

SECTION 2.(g)  Use of Proceeds. The proceeds of a tax levied under this section shall be used as provided in this subsection. The entity administering and collecting the tax may deduct from the gross proceeds of the taxes collected under this act an amount not to exceed three percent (3%) of the gross proceeds to pay for the direct cost of administering and collecting the taxes. The remaining proceeds shall be used for beach nourishment or to construct and improve public infrastructure and facilities or both.

SECTION 2.(h)  Effective Date of Levy. A tax levied under this section shall become effective on the date specified in the resolution levying the tax. The date shall be the first day of a calendar month and may not be before the first day of the fourth month after the date the resolution is adopted.

SECTION 2.(i)  Repeal. Repeal or reduction of a tax levied under this section does not affect a liability for a tax that attached before the effective date of the repeal or reduction, nor does it affect a right to a refund of a tax that accrued before the effective date of the repeal or reduction. Any repeal or reduction shall become effective on the first day of a month.

(1)        Voluntary repeal. A tax levied under this section may be repealed or reduced by a resolution adopted by the governing body of the municipality. Any repeal or reduction may not become effective until the end of the fiscal year in which the repeal resolution is adopted.

(2)        Mandatory repeal. A tax levied under this section is repealed upon the effective date of levy of a tax by Brunswick County pursuant to Section 1 of this act.

SECTION 3.  This act is effective when it becomes law.

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