GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2001
SESSION LAW 2002-184
SENATE BILL 1161
AN ACT to amend the present-use value statuTes, to CREATE A PROPERTY TAX SUBCOMMITTEE OF THE REVENUE LAWS STUDY COMMITTEE, to clarify the sales and use tax exemption regarding certain agricultural substances, and to make various administrative changes in the tax laws.
The General Assembly of North Carolina enacts:
SECTION 1. G.S. 105-277.2 reads as rewritten:
"§ 105-277.2. Agricultural, horticultural, and forestland - Definitions.
The following definitions apply in G.S. 105-277.3 through G.S. 105-277.7:
(1) Agricultural land. -
Land that is a part of a farm unit that is actively engaged in the commercial
production or growing of crops, plants, or animals under a sound management
program. Agricultural land includes woodland and wasteland that is a part of
the farm unit, but the woodland and wasteland included in the unit shall must
be appraised under the use-value schedules as woodland or wasteland. A farm
unit may consist of more than one tract of agricultural land, but at least one
of the tracts must meet the requirements in G.S. 105-277.3(a)(1), and each
tract must be under a sound management program. If the agricultural land
includes less than 20 acres of woodland, then the woodland portion is not
required to be under a sound management program. Also, woodland is not required
to be under a sound management program if it is determined that the highest and
best use of the woodland is to diminish wind erosion of adjacent agricultural
land, protect water quality of adjacent agricultural land, or serve as buffers
for adjacent livestock or poultry operations.
(1a) Business entity. - A corporation, a general partnership, a limited partnership, or a limited liability company.
(2) Forestland. - Land
that is a part of a forest unit that is actively engaged in the commercial
growing of trees under a sound management program. Forestland includes
wasteland that is a part of the forest unit, but the wasteland included in the
unit shall must be appraised under the use-value schedules as
wasteland. A forest unit may consist of more than one tract of forestland, but
at least one of the tracts must meet the requirements in G.S. 105-277.3(a)(3),
and each tract must be under a sound management program.
(3) Horticultural land. -
Land that is a part of a horticultural unit that is actively engaged in the
commercial production or growing of fruits or vegetables or nursery or floral
products under a sound management program. Horticultural land includes woodland
and wasteland that is a part of the horticultural unit, but the woodland and
wasteland included in the unit shall must be appraised under the
use-value schedules as woodland or wasteland. A horticultural unit may consist
of more than one tract of horticultural land, but at least one of the tracts
must meet the requirements in G.S. 105-277.3(a)(2), and each tract must be
under a sound management program. If the horticultural land includes less
than 20 acres of woodland, then the woodland portion is not required to be
under a sound management program. Also, woodland is not required to be under a
sound management program if it is determined that the highest and best use of
the woodland is to diminish wind erosion of adjacent horticultural land or
protect water quality of adjacent horticultural land.
(4) Individually owned. - Owned by one of the following:
a. A natural person. For the purpose of this section, a natural person who is an income beneficiary of a trust that owns land may elect to treat the person's beneficial share of the land as owned by that person. If the person's beneficial interest is not an identifiable share of land but can be established as a proportional interest in the trust income, the person's beneficial share of land is a percentage of the land owned by the trust that corresponds to the beneficiary's proportional interest in the trust income. For the purpose of this section, a natural person who is a member of a business entity, other than a corporation, that owns land may elect to treat the person's share of the land as owned by that person. The person's share is a percentage of the land owned by the business entity that corresponds to the person's percentage of ownership in the entity.
b. A business entity having as its principal business one of the activities described in subdivisions (1), (2), and (3) and whose members are all natural persons who meet one or more of the following conditions:
1. The member is actively engaged in the business of the entity.
2. The member is a relative of a member who is actively engaged in the business of the entity.
3. The member is a relative of, and inherited the membership interest from, a decedent who met one or both of the preceding conditions after the land qualified for classification in the hands of the business entity.
c. A trust that was created by a natural person who transferred the land to the trust and each of whose beneficiaries who is currently entitled to receive income or principal meets one of the following conditions:
1. Is the creator of the trust or the creator's relative.
2. Is a second trust whose beneficiaries who are currently entitled to receive income or principal are all either the creator of the first trust or the creator's relatives.
d. A testamentary trust that meets all of the following conditions:
1. It was created by a natural person who transferred to the trust land that qualified in that person's hands for classification under G.S. 105-277.3.
2. At the time of the creator's death, the creator had no relatives as defined in this section as of the date of death.
3. The trust income, less reasonable administrative expenses, is used exclusively for educational, scientific, literary, cultural, charitable, or religious purposes as defined in G.S. 105-278.3(d).
e. Tenants in common, if each tenant is either a natural person or a business entity described in sub-subdivision b. of this subdivision. Tenants in common may elect to treat their individual shares as owned by them individually in accordance with G.S. 105-302(c)(9). The ownership requirements of G.S. 105-277.3(b) apply to each tenant in common who is a natural person, and the ownership requirements of G.S. 105-277.3(b1) apply to each tenant in common who is a business entity.
(4a) Member. - A shareholder of a corporation, a partner of a general or limited partnership, or a member of a limited liability company.
(5) Present-use value. -
The value of land in its current use as agricultural land, horticultural land,
or forestland, based solely on its ability to produce income, using a rate
of nine percent (9%) to capitalize the expected net income of the property and
assuming an average level of management. income and assuming an average
level of management. A rate of nine percent (9%) shall be used to capitalize
the expected net income of forestland. The capitalization rate for agricultural
land and horticultural land is to be determined by the Use-Value Advisory Board
as provided in G.S. 105-277.7.
(5a) Relative. - Any of the following:
a. A spouse or the spouse's lineal ancestor or descendant.
b. A lineal ancestor or a lineal descendant.
c. A brother or sister, or the lineal descendant of a brother or sister. For the purposes of this sub-subdivision, the term brother or sister includes stepbrother or stepsister.
d. An aunt or an uncle.
e. A spouse of a person listed in paragraphs a. through d.
For the purpose of this subdivision, an adoptive or adopted relative is a relative and the term "spouse" includes a surviving spouse.
(6) Sound management program. - A program of production designed to obtain the greatest net return from the land consistent with its conservation and long-term improvement.
(7) Unit. - One or more tracts of agricultural land, horticultural land, or forestland. Multiple tracts must be under the same ownership. If the multiple tracts are located within different counties, they must be within 50 miles of a tract qualifying under G.S. 105-277.3(a) and share one of the following characteristics:
a. Type of classification.
b. Use of the same equipment or labor force."
SECTION 2. G.S. 105-277.3 reads as rewritten:
"§ 105-277.3. Agricultural, horticultural, and forestland - Classifications.
(a) Classes Defined. -
The following classes of property are designated special classes of property
under authority of Section 2(2) of Article V of the North Carolina Constitution
and shall must be appraised, assessed, and taxed as provided in
G.S. 105-277.2 through G.S. 105-277.7.
(1) Agricultural land. - Individually owned agricultural land consisting of one or more tracts, one of which consists of at least 10 acres that are in actual production and that, for the three years preceding January 1 of the year for which the benefit of this section is claimed, have produced an average gross income of at least one thousand dollars ($1,000). Gross income includes income from the sale of the agricultural products produced from the land and any payments received under a governmental soil conservation or land retirement program. Land in actual production includes land under improvements used in the commercial production or growing of crops, plants, or animals.
(2) Horticultural land. - Individually owned horticultural land consisting of one or more tracts, one of which consists of at least five acres that are in actual production and that, for the three years preceding January 1 of the year for which the benefit of this section is claimed, have met the applicable minimum gross income requirement. Land in actual production includes land under improvements used in the commercial production or growing of fruits or vegetables or nursery or floral products. Land that has been used to produce evergreens intended for use as Christmas trees must have met the minimum gross income requirements established by the Department of Revenue for the land. All other horticultural land must have produced an average gross income of at least one thousand dollars ($1,000). Gross income includes income from the sale of the horticultural products produced from the land and any payments received under a governmental soil conservation or land retirement program.
(3) Forestland. - Individually owned forestland consisting of one or more tracts, one of which consists of at least 20 acres that are in actual production and are not included in a farm unit.
(b) Natural Person Ownership Requirements. - In order to come within a classification described in subsection (a) of this section, the land must, if owned by a natural person, also satisfy one of the following conditions:
(1) It is the owner's place of residence.
(2) It has been owned by the current owner or a relative of the current owner for the four years preceding January 1 of the year for which the benefit of this section is claimed.
(3) At the time of transfer to the current owner, it qualified for classification in the hands of a business entity or trust that transferred the land to the current owner who was a member of the business entity or a beneficiary of the trust, as appropriate.
(b1) Entity Ownership Requirements. - In order to come within a classification described in subsection (a) of this section, the land must, if owned by a business entity or trust, have been owned by the business entity or trust or by one or more of its members or creators, respectively, for the four years immediately preceding January 1 of the year for which the benefit of this section is claimed.
(b2) Exception to Ownership
Requirements. - G.S. 105-277.4(c) provides that deferred taxes are payable
if land fails to meet any condition or requirement for classification.
Accordingly, if land fails to meet an ownership requirement due to a change of
ownership, G.S. 105-277.4(c) applies. Despite this failure and the resulting
liability for taxes under G.S. 105-277.4(c), theNotwithstanding the
provisions of subsections (b) and (b1) of this section, land may qualify
for classification in the hands of the new owner if both all of
the conditions listed in this subsection are met, even if the new owner does
not meet all of the ownership requirements of subsections (b) and (b1) of this
section with respect to the land. If the land qualifies for classification in
the hands of the new owner under the provisions of this subsection, then the
deferred taxes remain a lien on the land under G.S. 105-277.4(c), the new
owner becomes liable for the deferred taxes, and the deferred taxes become
payable if the land fails to meet any other condition or requirement for classification.
(1) The land was appraised at its present use value or was eligible for appraisal at its present use value at the time title to the land passed to the new owner.
(2) At the time title to the land passed to the new owner, the new owner acquires the land for the purposes of and continues to use the land for the purposes it was classified under subsection (a) of this section while under previous ownership.
(3) The new
owner has timely filed an application as required by
G.S. 105-277.4(a) and has certified that the new owner accepts liability for
the deferred taxes and intends to continue the present use of the land.
(c) Repealed by Session Laws 1995, c. 454, s. 2.
(d) Exception for
Conservation Reserve Program. - Land enrolled in the federal Conservation
Reserve Program authorized by 16 U.S.C. § 1381Chapter 58 is
considered to be in actual production, and income derived from participation in
the federal Conservation Reserve Program may be used in meeting the minimum gross
income requirements of this section either separately or in combination with
income from actual production. Land enrolled in the federal Conservation
Reserve Program shall must be assessed as agricultural land if it
is planted in vegetation other than trees, or as forestland if it is planted in
trees.
(d1) Exception for Easements on Qualified Conservation Lands Previously Appraised at Use Value. - Property that is appraised at its present-use value under G.S. 105-277.4(b) shall continue to qualify for appraisal, assessment, and taxation as provided in G.S. 105-277.2 through G.S. 105-277.7 as long as the property is subject to an enforceable conservation easement that would qualify for the conservation tax credit provided in G.S. 105-130.34 and G.S. 105-151.12, without regard to actual production or income requirements of this section. Notwithstanding G.S. 105-277.3(b) and (b1), subsequent transfer of the property does not extinguish its present-use value eligibility as long as the property remains subject to an enforceable conservation easement that qualifies for the conservation tax credit provided in G.S. 105-130.34 and G.S. 105-151.12. The exception provided in this subsection applies only to that part of the property that is subject to the easement.
(e) Exception for Turkey Disease. - Agricultural land that meets all of the following conditions is considered to be in actual production and to meet the minimum gross income requirements:
(1) The land was in actual production in turkey growing within the preceding two years and qualified for present use value treatment while it was in actual production.
(2) The land was taken out of actual production in turkey growing solely for health and safety considerations due to the presence of Poult Enteritis Mortality Syndrome among turkeys in the same county or a neighboring county.
(3) The land is otherwise eligible for present use value treatment.
(f) Sound Management Program for Agricultural Land and Horticultural Land. - If the property owner demonstrates any one of the following factors with respect to agricultural land or horticultural land, then the land is operated under a sound management program:
(1) Enrollment in and compliance with an agency-administered and approved farm management plan.
(2) Compliance with a set of best management practices.
(3) Compliance with a minimum gross income per acre test.
(4) Evidence of net income from the farm operation.
(5) Evidence that farming is the farm operator's principal source of income.
(6) Certification by a recognized agricultural or horticultural agency within the county that the land is operated under a sound management program.
Operation under a sound management program may also be demonstrated by evidence of other similar factors. As long as a farm operator meets the sound management requirements, it is irrelevant whether the property owner received income or rent from the farm operator.
(g) Sound Management Program for Forestland. - If the owner of forestland demonstrates that the forestland complies with a written sound forest management plan for the production and sale of forest products, then the forestland is operated under a sound management program."
SECTION 3. G.S. 105-277.4 reads as rewritten:
"§ 105-277.4. Agricultural, horticultural and forestland - Application; appraisal at use value; appeal; deferred taxes.
(a) Application. -
Property coming within one of the classes defined in
G.S. 105-277.3 shall be is eligible for taxation on the basis of
the value of the property in its present use if a timely and proper application
is filed with the assessor of the county in which the property is located. The
application shall must clearly show that the property comes
within one of the classes and shall must also contain any other
relevant information required by the assessor to properly appraise the property
at its present-use value. An initial application shall must be
filed during the regular listing period of the year for which the benefit of
this classification is first claimed, or within 30 days of the date shown on a
notice of a change in valuation made pursuant to G.S. 105-286 or G.S. 105-287.
A new application is not required to be submitted unless the property is
transferred or becomes ineligible for use-value appraisal because of a change
in use or acreage. An application required due to transfer of the land may
be submitted at any time during the calendar year but must be submitted within
60 days of the date of the property's transfer.
(b) Appraisal at Present-use
Value. - Upon receipt of a properly executed application, the assessor shall
must appraise the property at its present-use value as established
in the schedule prepared pursuant to G.S. 105-317. In appraising the property
at its present-use value, the assessor shall must appraise the
improvements located on qualifying land according to the schedules and
standards used in appraising other similar improvements in the county. If all
or any part of a qualifying tract of land is located within the limits of an
incorporated city or town, or is property annexed subject to G.S. 160A-37(f1)
or G.S. 160A-49(f1), the assessor shall must furnish a copy of
the property record showing both the present-use appraisal and the valuation
upon which the property would have been taxed in the absence of this
classification to the collector of the city or town. He shallThe
assessor must also notify the tax collector of any changes in the appraisals
or in the eligibility of the property for the benefit of this classification.
Upon a request for a certification pursuant to G.S. 160A-37(f1) or G.S.160A-49(f1),
or any change in the certification, the assessor for the county where the land
subject to the annexation is located shall, must, within 30 days,
determine if the land meets the requirements of G.S. 160A-37(f1)(2) or G.S.
160A-49(f1)(2) and report the results of its findings to the city.
(b1) Appeal. - Decisions of the assessor regarding the qualification or appraisal of property under this section may be appealed to the county board of equalization and review or, if that board is not in session, to the board of county commissioners. Decisions of the county board may be appealed to the Property Tax Commission.
(c) Deferred Taxes. -
Land meeting the conditions for classification under
G.S. 105-277.3 shall must be taxed on the basis of the value of
the land for its present use. The difference between the taxes due on the
present-use basis and the taxes that would have been payable in the absence of
this classification, together with any interest, penalties, or costs that may
accrue thereon, are a lien on the real property of the taxpayer as provided in
G.S. 105-355(a). The difference in taxes shall must be carried
forward in the records of the taxing unit or units as deferred taxes. The taxes
become due and payable when the land fails to meet any condition or requirement
for classification. Failure to have an application approved is ground for
disqualification. The tax for the fiscal year that opens in the calendar
year in which deferred taxes become due is computed as if the land had not been
classified for that year, and taxes for the preceding three fiscal years that
have been deferred are immediately payable, together with interest as provided
in G.S. 105-360 for unpaid taxes. Interest accrues on the deferred taxes due as
if they had been payable on the dates on which they originally became due. If
only a part of the qualifying tract of land fails to meet a condition or
requirement for classification, a determination shall be made of the
assessor must determine the amount of deferred taxes applicable to that
part and that amount becomes payable with interest as provided above. Upon the
payment of any taxes deferred in accordance with this section for the three
years immediately preceding a disqualification, all liens arising under this
subsection are extinguished. The deferred taxes for any given year may be paid
in that year without the qualifying tract of land becoming ineligible for
deferred status.
(d) Exceptions. - Notwithstanding the provisions of subsection (c) of this section, if property loses its eligibility for present use value classification solely due to one of the following reasons, no deferred taxes are due and the lien for the deferred taxes is extinguished:
(1) There is a change in income caused by enrollment of the property in the federal conservation reserve program established under 16 U.S.C. Chapter 58.
(2) The property is conveyed by gift to a nonprofit organization and qualifies for exclusion from the tax base pursuant to G.S. 105-275(12) or G.S. 105-275(29).
(3) The property is conveyed by gift to the State, a political subdivision of the State, or the United States.
(e) Repealed by Session Laws 1997-270, s. 3, effective July 3, 1997."
SECTION 4. G.S. 105-277.7 reads as rewritten:
"§ 105-277.7. Use-Value Advisory Board.
(a) Creation
and Membership. - The Use-Value Advisory Board is established under the
supervision of the Agricultural Extension Service of North Carolina State
University. The Board shall annually submit to the Department of Revenue a
recommended use-value manual developed in accordance with the guidelines in
G.S. 105-289(a)(5). In developing the manual, the Board may consult with
federal and State agencies as needed. The Board shall submit to the Department
of Revenue recommendations concerning requirements for horticultural land used
to produce evergreens intended for use as Christmas trees when requested to do
so by the Department.
The Board shall be chaired by the Director of the
Agricultural Extension Service of North Carolina State University shall
serve as the chair of the Board. The Board and shall consist of the
following additional members:members, to serve ex officio:
(1) A a representative
of the Department of Agriculture and Consumer Services, designated by the
Commissioner of Agriculture;Agriculture.
(2) A a
representative of the Forest Resources Division of the Department of
Environment and Natural Resources, designated by the Director of that Division;
and aDivision.
(3) A representative of the Agricultural Extension Service at North Carolina Agricultural and Technical State University, designated by the Director of the Extension Service.
(4) A representative of the North Carolina Farm Bureau, designated by the President of the Bureau.
(5) A representative of the North Carolina Association of Assessing Officers, designated by the President of the Association.
(6) The Director of the Property Tax Division of the North Carolina Department of Revenue or the Director's designee.
(7) A representative of the North Carolina Association of County Commissioners, designated by the President of the Association.
(8) A representative of the North Carolina Forestry Association, designated by the President of the Association.
(b) Staff. - All
members shall serve ex officio. The Agricultural Extension Service at North
Carolina State University shall must provide clerical assistance
to the Board.
(c) Duties. - The Board must annually submit to the Department of Revenue a recommended use-value manual. In developing the manual, the Board may consult with federal and State agencies as needed. The manual must contain all of the following:
(1) The estimated cash rental rates for agricultural lands and horticultural lands for the various classes of soils found in the State. The rental rates must recognize the productivity levels by class of soil or geographic area. The rental rates must be based on the rental value of the land to be used for agricultural or horticultural purposes when those uses are presumed to be the highest and best use of the land. The recommended rental rates may be established from individual county studies or from contracts with federal or State agencies as needed.
(2) The recommended net income ranges for forestland furnished to the Board by the Forestry Section of the North Carolina Cooperative Extension Service. These net income ranges may be based on up to six classes of land within each Major Land Resource Area designated by the United States Soil Conservation Service. In developing these ranges, the Forestry Section must consider the soil productivity and indicator tree species or stand type, the average stand establishment and annual management costs, the average rotation length and timber yield, and the average timber stumpage prices.
(3) The capitalization rates adopted by the Board prior to February 1 for use in capitalizing incomes into values. The capitalization rate for forestland shall be nine percent (9%). The capitalization rate for agricultural land and horticultural land must be no less than six percent (6%) and no more than seven percent (7%). The incomes must be in the form of cash rents for agricultural lands and horticultural lands and net incomes for forestlands.
(4) The value per acre adopted by the Board for the best agricultural land. The value may not exceed one thousand two hundred dollars ($1,200).
(5) Recommendations concerning any changes to the capitalization rate for agricultural land and horticultural land and to the maximum value per acre for the best agricultural land based on a calculation to be determined by the Board. The Board shall annually report these recommendations to the Revenue Laws Study Committee and to the President Pro Tempore of the Senate and the Speaker of the House of Representatives.
(6) Recommendations concerning requirements for horticultural land used to produce evergreens intended for use as Christmas trees when requested to do so by the Department."
SECTION 5. G.S. 105-289(a) reads as rewritten:
"(a) It shall beis
the duty of the Department of Revenue:
(1) To discharge the duties prescribed by law and to enforce the provisions of this Subchapter.
(2) To exercise general and specific supervision over the valuation and taxation of property by taxing units throughout the State.
(3) To appraise the property of public service companies.
(4) To keep full and accurate records of the Commission's official proceedings.
(5) To prepare and
distribute annually to each assessor a the manual developed by
the Use-Value Advisory Board under G.S. 105-277.7 that establishes five
expected net income per acre ranges for agricultural land, horticultural land,
and forestland, and establishes a method for appraising nonproductive land as a
percentage of the lowest use-value established for productive land. The high
and low net income amount in each range may differ by no more than fifteen
dollars ($15.00). The basis for establishing each range shall be soil productivity.
For agricultural land, the
expected net income per acre ranges shall be based on the actual yields and
prices of corn and soybeans over a period of at least the five previous years,
and the actual fixed and variable costs, including an imputed management cost,
incurred in growing corn and soybeans over the same period of time. The manual
shall contain recommended adjustments to the net income per acre ranges for the
growing of crops subject to acreage or poundage allotments.
Expected net income per acre
ranges shall be similarly established for horticultural land and forestland,
using typical horticultural or forest products in various growing regions of
the State instead of corn and soybeans. the cash rental rates for
agricultural lands and horticultural lands and the net income ranges for
forestland.
(6) To establish requirements for horticultural land, used to produce evergreens intended for use as Christmas trees, in lieu of a gross income requirement until evergreens are harvested from the land, and to establish a gross income requirement for this type horticultural land, that differs from the income requirement for other horticultural land, when evergreens are harvested from the land.
(7) To conduct studies of the cash rents for agricultural lands on a county or a regional basis, such as the Major Land Resource Area map designated and developed by the U.S. Department of Agriculture. The results of the studies must be furnished to the North Carolina Use-Value Advisory Board. The studies may be conducted on any reasonable basis and timetable that will be reflective of rents and values for each local area based on the productivity of the land."
SECTION 6. G.S. 105-296(j) reads as rewritten:
"(j) The assessor shall
must annually review at least one eighth of the parcels in
the county classified for taxation at present-use value to verify that these
parcels qualify for the classification. By this method, the assessor shall must
review the eligibility of all parcels classified for taxation at present-use
value in an eight-year period. The period of the review process is based on
the average of the preceding three years' data. The assessor may request
assistance from the Farm Service Agency, the Cooperative Extension Service, the
Forest Resources Division of the Department of Environment and Natural
Resources, or other similar organizations.
The assessor may require the owner of classified property to
submit any information information, including sound management plans
for forestland, needed by the assessor to verify that the property
continues to qualify for present-use value taxation. The owner has 60 days from
the date a written request for the information is made to submit the
information to the assessor. If the assessor determines the owner failed to
make the information requested available in the time required without good
cause, the property loses its present-use value classification and the
property's deferred taxes become due and payable as provided in G.S. 105-277.4(c).
The assessor must reinstate the property's use-value classification when the
owner submits the requested information unless the information discloses that
the property no longer qualifies for present-use value classification. When a
property's present-use value classification is reinstated, it is reinstated
retroactive to the date the classification was revoked and any deferred taxes
that were paid as a result of the revocation must be refunded to the property
owner.
In determining whether property is operating under a sound management program, the assessor must consider any weather conditions or other acts of nature that prevent the growing or harvesting of crops or the realization of income from cattle, swine, or poultry operations. The assessor must also allow the property owner to submit additional information before making this determination."
SECTION 7. G.S. 105-299 reads as rewritten:
"§ 105-299. Employment of experts.
The board of county commissioners may employ appraisal firms,
mapping firms or other persons or firms having expertise in one or more of the
duties of the assessor to assist him or her the assessor in the
performance of such these duties. The county may also assign
to county agencies, or contract with State or federal agencies, for any duties
involved with the approval or auditing of use-value accounts. The county
may make available to such these persons any information it has
that will facilitate the performance of a contract entered into pursuant to
this section. Persons receiving such this information shall beare
subject to the provisions of G.S. 105-289(e) and
G.S. 105-259 regarding the use and disclosure of information provided to them
by the county. Any person employed by an appraisal firm whose duties include
the appraisal of property for the county shall must be required
to demonstrate that he or she is qualified to carry out such these duties
by achieving a passing grade on a comprehensive examination in the appraisal of
property administered by the Department of Revenue. In the employment of such
these firms, primary consideration shall must be given
to the firms registered with the Department of Revenue pursuant to the
provisions of
G.S. 105-289(i). A copy of the specifications to be submitted to potential
bidders and a copy of the proposed contract may be sent by the board to the
Department of Revenue for review before the invitation or acceptance of any
bids. Contracts for the employment of these such firms or persons
shall be deemed to be are contracts for personal services and shall
not beare not subject to the provisions of Article 8, Chapter 143,
of the General Statutes."
SECTION 8. Article 12L of Chapter 120 of the General Statutes is amended by adding a new section to read:
"§ 120-70.108. Property Tax Subcommittee.
(a) The Revenue Laws Study Committee shall establish a Property Tax Subcommittee consisting of six members. The Senate cochair of the Committee shall designate three members appointed by the President Pro Tempore of the Senate to serve on the Subcommittee and shall name one of those members a cochair of the Subcommittee. The House cochair of the Committee shall designate three members appointed by the Speaker of the House of Representatives to serve on the Subcommittee and shall name one of those members a cochair of the Subcommittee. The Subcommittee shall meet upon the call of the Subcommittee cochairs.
(b) The Property Tax Subcommittee shall study, examine, and, if necessary, recommend changes to the property tax system. The Subcommittee shall include in its study an examination of all classes of property, including exemptions and exclusions of property from the property tax base. The Subcommittee shall also study the present-use value system, including the following:
(1) Examine the implementation and application of the current present-use value statutes.
(2) Evaluate other tax credits, including adjustments to and credits for ad valorem taxes, to encourage agricultural, forestry, horticultural, and conservation use of land.
(3) Evaluate the treatment of undeveloped land in ad valorem tax.
(4) Evaluate the possibility of amending the present-use value system and developing other tax incentives to encourage conservation and environmental protection of land. The study shall include the feasibility of allowing lands managed for conservation and the preservation of water quality, wildlife habitats, and other conservation purposes to be taxed at their present-use value.
(5) Evaluate the possibility of adding more specific land and resource management criteria to the sound management programs required for all lands enrolled in the present-use value system.
(6) Review other issues related to the taxation of agricultural land, horticultural land, and forestland, including reducing the acreage requirement for land to qualify as forestland.
(c) The Subcommittee shall report any recommendations to the Revenue Laws Study Committee."
SECTION 9. G.S. 105-164.13(2a) reads as rewritten:
"(2a) Any of the following substances
when purchased for use on animals or plants, as appropriate, held or
produced for commercial purposes:purposes. This exemption does not
apply to any equipment or devices used to administer, release, apply, or
otherwise dispense these substances:
a. Remedies, vaccines, medications, litter materials, and feeds for animals.
b. Rodenticides, insecticides, herbicides, fungicides, and pesticides.
c. Defoliants for use on cotton or other crops.
d. Plant growth inhibitors, regulators, or stimulators, including systemic and contact or other sucker control agents for tobacco and other crops."
SECTION 10. G.S. 105-164.16(b) reads as rewritten:
"(b) Quarterly. - A
taxpayer who is consistently liable for less than one hundred dollars ($100.00)
a month in State and local sales and use taxes must file a return and pay the
taxes due on a quarterly basis. A quarterly return covers a calendar quarter
and is due by the 15thlast day of the month following
the end of the quarter."
SECTION 11. G.S. 105-164.16(b2) reads as rewritten:
"(b2) Semimonthly. - A taxpayer who is consistently liable for at least ten thousand dollars ($10,000) a month in State and local sales and use taxes must pay the tax twice a month and must file a return on a monthly basis. One semimonthly payment covers the period from the first day of the month through the 15th day of the month. The other semimonthly payment covers the period from the 16th day of the month through the last day of the month. The semimonthly payment for the period that ends on the 15th day of the month is due by the 25th day of that month. The semimonthly payment for the period that ends on the last day of the month is due by the 10th day of the following month.
A return covers both semimonthly payment periods. The return
is due by the 20th day of the month following the month of the
payment periods covered by the return. A taxpayer is not subject to interest on
or penalties for an underpayment for a semimonthly payment period if the
taxpayer timely pays at least ninety-five percent (95%) of the amount due
for each semimonthly payment period lesser of the following and
includes the underpayment with the monthly return for those semimonthly payment
periods.periods:
(1) The amount due for each semimonthly payment period.
(2) The average semimonthly payment for the prior calendar year."
SECTION 12. Part 5 of Article 5 of Chapter 105 of the General Statutes is amended by adding a new section to read:
"§ 105-164.28A. Other exemption certificates.
(a) Authorization. - The Secretary may require a person who purchases tangible personal property that is exempt from tax or is subject to a preferential rate of tax depending on the status of the purchaser or the intended use of the property to obtain an exemption certificate from the Department to receive the exemption or preferential rate. An exemption certificate authorizes a retailer to sell tangible personal property to the holder of the certificate and either collect tax at a preferential rate or not collect tax on the sale, as appropriate. A person who purchases tangible personal property under an exemption certificate is liable for any tax due on the sale if the Department determines that the person is not eligible for the certificate or the property was not used as intended.
(b) Scope. - This section does not apply to a direct pay permit or a certificate of resale. G.S. 105-164.27A addresses a direct pay permit, and G.S. 105-164.28 addresses a certificate of resale."
SECTION 13. Sections 1 through 7 of this act are effective for taxes imposed for taxable years beginning on or after July 1, 2003. Section 10 becomes effective October 1, 2002, and applies to taxes levied on or after that date. Section 11 becomes effective October 1, 2002, and applies to payments due on or after that date. Sections 8, 9, 12, and 13 are effective when they become law.
In the General Assembly read three times and ratified this the 24th day of September, 2002.
s/ Beverly E. Perdue
President of the Senate
s/ James B. Black
Speaker of the House of Representatives
s/ Michael F. Easley
Governor
Approved 4:42 p.m. this 31st day of October, 2002