Bill Text: NC H335 | 2013-2014 | Regular Session | Amended
Bill Title: Aid Rapid Response to States of Emergency
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2013-03-20 - Ref To Com On Finance [H335 Detail]
Download: North_Carolina-2013-H335-Amended.html
GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2013
H 1
HOUSE BILL 335
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Short Title: Aid Rapid Response to States of Emergency. |
(Public) |
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Sponsors: |
Representatives Arp, Howard, Carney, and Hanes (Primary Sponsors). For a complete list of Sponsors, refer to the North Carolina General Assembly Web Site. |
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Referred to: |
Finance. |
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March 20, 2013
A BILL TO BE ENTITLED
AN ACT to facilitate Rapid Response by businesses to states of emergency.
Whereas, during times of storm, flood, fire, earthquake, hurricane, or other disaster or emergency, many businesses bring in resources and personnel from other states throughout the United States on a temporary basis to expedite the often enormous and overwhelming task of cleaning up, restoring, and repairing infrastructure in the State; and
Whereas, this may involve the need for out‑of‑state businesses, including out‑of‑state affiliates of businesses based in the State, to bring in resources, property, or personnel that previously have had no connection to the State and to perform activities in the State, including repairing, renovating, installing, building, rendering services, or other business activities relating to infrastructure, so as to require out‑of‑state personnel to be located in the State for extended periods of time to perform such activities; and
Whereas, during such time of operating in the State on a temporary basis solely for purposes of helping the State's infrastructure recover from the disaster or emergency, these businesses and individual employees should not be burdened by any requirements for business and employee taxes as a result of such activities in the State for the temporary period; and
Whereas, the State's nexus and residency thresholds are intended for businesses and individuals who are in the State as part of the conduct of regular business operations or who intend to reside in the State and should not be directed at businesses and individuals coming into the State on a temporary basis to provide help and assistance in response to a declared state of emergency; and
Whereas, to ensure that businesses may focus on quick response to the needs of the State and its citizens during a state of emergency, it is appropriate for the Legislature to deem that such activity for a reasonable period of time before, during, and after the disaster or emergency for repair and restoration of the often devastating damage to property and infrastructure in the State shall not establish presence, residency, doing business in the State, nor any other criteria for purposes of certain State and local taxes, licensing, and regulatory requirements; Now, therefore,
The General Assembly of North Carolina enacts:
PART I. GENERAL PROVISIONS
SECTION 1.(a) Chapter 166A of the General Statutes is amended by adding a new Article to read:
"Article 6.
"Facilitation of Rapid Response by Businesses to States of Emergency.
"§ 166A‑70. Definitions.
The following definitions apply in this Article:
(1) Disaster or emergency-related work. Repairing, renovating, installing, building, rendering services, or other business activities that relate to infrastructure that has been damaged, impaired, or destroyed during an emergency, as that term is defined in G.S. 166A‑19.3, regardless of whether the infrastructure that has been damaged, impaired, or destroyed is within the geographical area covered by a state of emergency.
(2) Disaster period. A period that begins within 14 days of the date that a state of emergency is declared under Article 1A of this Chapter and that extends for a period of 60 calendar days after the state of emergency expires.
(3) Infrastructure. Property and equipment owned or used by communications networks, electric generation, transmission and distribution systems, gas distribution systems, water pipelines, public roads and bridges, and related support facilities that service multiple customers or residents, including, but not limited to, real and personal property such as buildings, offices, lines, poles, pipes, structures, and equipment.
(4) Out‑of‑state business. A business entity that, for the current taxable year and the preceding three taxable years, (i) has no presence in the State, (ii) conducts no business in the State, (iii) has no registrations or tax filings in the State, and (iv) has no nexus to the State prior to the declaration of a state of emergency, whose services are requested by a registered business or by a State or local government agency for purposes of performing disaster or emergency-related work in the State. The term shall also include a business entity that is affiliated with the registered business in the State solely through common ownership.
(5) Out‑of‑state employee. An employee who, for the current taxable year and the preceding three taxable years, does not work in the State, except for disaster or emergency-related work during a disaster period.
(6) Registered business. A business entity that is registered to do business in the State prior to a state of emergency under Article 1A of this Chapter.
(7) State of emergency. As defined in G.S. 166A‑19.3. The term shall also include an event for which a Presidential Declaration of a Federal Major Disaster or Emergency has been issued.
"§ 166A‑71. Limited exemption for out‑of‑state businesses and employees responding to a state of emergency.
(a) Limited Exemption for Out‑of‑State Businesses. An out‑of‑state business that conducts operations within the State for purposes of performing disaster or emergency related work during the applicable disaster period shall not be considered to have established a level of presence that would require that business to register, file, or remit State or local taxes or that would require that business or its out‑of‑state employees to be subject to any State licensing or registration requirements. This shall include any and all State or local business licensing or registration requirements or State and local taxes or fees, including, but not limited to, unemployment insurance, State or local occupational licensing fees, sales and use tax, or ad valorem tax on equipment used or consumed during the disaster period, or Secretary of State licensing and regulatory requirements. For purposes of any State or local tax on or measured by, in whole or in part, net or gross income or receipts, all activity of the out‑of‑state business that is conducted in this State pursuant to this Article shall be disregarded with respect to any filing requirements for such tax including the filing required for a unitary or combined group of which the out‑of‑state business may be a part.
(b) Limited Exemption for Out‑of‑State Employees. An out‑of‑state employee shall not be considered to have established residency or a presence in the State that would require that person or that person's employer to file and pay income taxes to be subjected to tax withholdings, or to file and pay any other State or local tax or fee during the applicable disaster period, including any related State or local employer withholding and remittance obligations.
(c) Exception for Transactional Taxes and Fees. Out‑of‑state businesses and out‑of‑state employees shall be required to pay transaction taxes and fees, including, but not limited to, fuel taxes or sales and use taxes on materials or services subject to sales and use tax, hotel taxes, car rental taxes, or fees that the out‑of‑state affiliated business or out‑of‑state employee purchases for use or consumption in the State during the applicable disaster period, unless such taxes are otherwise exempted during the applicable disaster period.
(d) Section Inapplicable After Expiration of Disaster Period. Any out‑of‑state business or out‑of‑state employee that remains in the State after the applicable disaster period shall become subject to the State's normal standards for establishing presence, residency, or doing business in the State and shall therefore become responsible for any business or employee tax requirements, State and local registration, and licensing and filing requirements that ensue.
"§ 166A‑72. Administration.
(a) Notification by Out‑of‑State Businesses. An out‑of‑state business that enters the State shall provide to the Department of Revenue a statement that it is in the State for purposes of performing disaster or emergency-related work during a disaster period. The statement shall be in the form prescribed by the Secretary of Revenue, shall include any supporting documentation the Secretary may require, and shall include the business's name, state of domicile, principal business address, federal tax identification number, period of entry, and contact information.
(b) Notification by Registered Business. A registered business in the State shall provide the items of information required in subsection (a) of this section for any affiliate that enters the State that is an out‑of‑State business. The notification shall be in the form prescribed by the Secretary of Revenue and shall additionally include contact information for the registered business in the State.
(c) Rule making. The Department of Revenue shall adopt rules implementing the provisions of this Article."
SECTION 1.(b) G.S. 55‑15‑01 reads as rewritten:
"§ 55‑15‑01. Authority to transact business required.
(a) A foreign corporation may not transact business in this State until it obtains a certificate of authority from the Secretary of State.
(b) Without excluding other activities which may not constitute transacting business in this State, a foreign corporation shall not be considered to be transacting business in this State solely for the purposes of this Chapter, by reason of carrying on in this State any one or more of the following activities:
(1) Maintaining or defending any action or suit or any administrative or arbitration proceeding, or effecting the settlement thereof or the settlement of claims or disputes;
(2) Holding meetings of its directors or shareholders or carrying on other activities concerning its internal affairs;
(3) Maintaining bank accounts or borrowing money in this State, with or without security, even if such borrowings are repeated and continuous transactions;
(4) Maintaining offices or agencies for the transfer, exchange, and registration of its securities, or appointing and maintaining trustees or depositories with relation to its securities;
(5) Soliciting or procuring orders, whether by mail or through employees or agents or otherwise, where such orders require acceptance without this State before becoming binding contracts;
(6) Making or investing in loans with or without security including servicing of mortgages or deeds of trust through independent agencies within the State, the conducting of foreclosure proceedings and sale, the acquiring of property at foreclosure sale and the management and rental of such property for a reasonable time while liquidating its investment, provided no office or agency therefor is maintained in this State;
(7) Taking security for or collecting debts due to it or enforcing any rights in property securing the same;
(8) Transacting business in interstate commerce;
(9) Conducting an isolated transaction completed within a period of six months and not in the course of a number of repeated transactions of like nature;
(10) Selling through independent contractors;
(11) Owning, without more, real or personal property.property;
and
(12) Proceeding under Article 6 of Chapter 166A of the General Statutes.
(c) Reserved for future codification purposes.
(d) Foreign insurance companies that are licensed by the Commissioner of Insurance are not required to obtain a certificate of authority from the Secretary of State."
SECTION 1.(c) G.S. 57C‑7‑02 reads as rewritten:
"§ 57C‑7‑02. Authority to transact business required.
(a) A foreign limited liability company may not transact business in this State until it obtains a certificate of authority from the Secretary of State.
(b) Without excluding other activities that may not constitute transacting business in this State, a foreign limited liability company shall not be considered to be transacting business in this State for the purposes of this Chapter by reason of carrying on in this State any one or more of the following activities:
(1) Maintaining or defending any action or suit or any administrative or arbitration proceeding, or effecting the settlement thereof or the settlement of claims or disputes;
(2) Holding meetings of its managers or members or carrying on other activities concerning its internal affairs;
(3) Maintaining bank accounts or borrowing money in this State, with or without security, even if such borrowings are repeated and continuous transactions;
(4) Maintaining offices or agencies for the transfer, exchange, and registration of its membership interests, or appointing and maintaining trustees or depositories with relation to its membership interests;
(5) Soliciting or procuring orders, whether by mail or through employees or agents or otherwise, where the orders require acceptance without this State before becoming binding contracts;
(6) Making or investing in loans with or without security including servicing of mortgages or deeds of trust through independent agencies within the State, the conducting of foreclosure proceedings and sales, the acquiring of property at foreclosure sale, and the management and rental of such property for a reasonable time while liquidating its investment, provided no office or agency therefor is maintained in this State;
(7) Taking security for or collecting debts due to it or enforcing any rights in property securing the same;
(8) Transacting business in interstate commerce;
(9) Conducting an isolated transaction completed within a period of six months and not in the course of a number of repeated transactions of like nature;
(10) Selling through independent contractors; and
(11) Owning, without more, real or personal property.property;
and
(12) Proceeding under Article 6 of Chapter 166A of the General Statutes.
(c) This section does not apply in determining the contacts or activities that may subject a foreign limited liability company to service of process or taxation in this State or to regulation under any other law of this State."
PART II. TAX EXEMPTIONS
SECTION 2.1. G.S. 105‑125(a) is amended by adding a new subdivision to read:
"(a) Exemptions. The following corporations are exempt from the taxes levied by this Article. Upon request of the Secretary, an exempt corporation must establish its claim for exemption in writing:
(10) An out‑of‑state business doing business in this State limited to disaster or emergency-related work during a disaster period. The definitions of G.S. 166A‑70 apply in this section.
Provided, that an entity that qualifies as a real estate mortgage investment conduit, as defined in section 860D of the Code, is exempt from all of the taxes levied in this Article. Upon request by the Secretary of Revenue, a real estate mortgage investment conduit must establish in writing its qualification for this exemption."
SECTION 2.2. G.S. 105‑130.16 reads as rewritten:
"§ 105‑130.16. Returns.
(a) Every Return. Subject to the exception
in subsection (d) of this section, every corporation doing business in this
State must file with the Secretary an income tax return showing specifically
the items of gross income and the deductions allowed by this Part and any other
facts the Secretary requires to make any computation required by this Part. The
return of a corporation must be signed by its president, vice‑president,
treasurer, or chief financial officer. The officer signing the return must
furnish an affirmation verifying the return. The affirmation must be in the
form required by the Secretary.
(b), (c) Repealed by Session Laws 2011‑390, s. 4, as amended by Session Laws 2011‑411, s. 8(b), effective for taxable years beginning on or after January 1, 2012.
(d) Exception. An out‑of‑state business earning income in this State limited to disaster or emergency-related work during a disaster period is not required to file a return for or pay income tax on the income. The definitions of G.S. 166A‑70 apply in this section."
SECTION 2.3. G.S. 105‑152 reads as rewritten:
"§ 105‑152. Income tax returns.
(a) Who Must File. The following individuals shall file with the Secretary an income tax return under affirmation:
(1) Every resident required to file an income tax return for the taxable year under the Code and every nonresident who (i) derived gross income from North Carolina sources during the taxable year attributable to the ownership of any interest in real or tangible personal property in this State or derived from a business, trade, profession, or occupation carried on in this State and (ii) is required to file an income tax return for the taxable year under the Code.
(2) Repealed by Session Laws 1991 (Reg. Sess., 1992), c. 930, s. 1.
(3) Any individual whom the Secretary believes to be liable for a tax under this Part, when so notified by the Secretary and requested to file a return.
(a1) Exception. An out‑of‑state business or out‑of‑state employee earning income in this State limited to disaster or emergency-related work during a disaster period is not required to file a return for or pay income tax on the income. The definitions of G.S. 166A‑70 apply in this section.
."
SECTION 2.4. G.S. 105‑275 is amended by adding a new subdivision to read:
"§ 105‑275. Property classified and excluded from the tax base.
The following classes of property are designated special classes under Article V, Sec. 2(2), of the North Carolina Constitution and are excluded from tax:
(46) Tangible personal property of an out‑of‑state business or out‑of‑state employee brought into the State to assist during a disaster period. The definitions of G.S. 166A‑70A apply in this subdivision."
SECTION 2.5. Section 2.4 of this Part is effective for taxes imposed for taxable years beginning on or after July 1, 2013. The remainder of this Part is effective for taxable years beginning on or after January 1, 2013.
PART III. EFFECTIVE DATE
SECTION 3. Except as otherwise provided, this act is effective when it becomes law.
