GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2007

SESSION LAW 2008-154

HOUSE BILL 2509

AN ACT to authorize a semiannual sales and use tax refund to a nonprofit organization that procures, designs, constructs, or provides facilities to a constituent institution of the university of north carolina.

The General Assembly of North Carolina enacts:

SECTION 1.  G.S. 105-164.14(b) reads as rewritten:

"(b)      Nonprofit Entities and Hospital Drugs. - A nonprofit entity included in the following list is allowed a semiannual refund of sales and use taxes paid by it under this Article on direct purchases of tangible personal property and services, other than electricity, telecommunications service, and ancillary service, for use in carrying on the work of the nonprofit entity:

(1)       Hospitals not operated for profit, including hospitals and medical accommodations operated by an authority created under the Hospital Authorities Law, Article 2 of Chapter 131E of the General Statutes.

(2)       Educational institutions not operated for profit.

(3)       Churches, orphanages, and other charitable or religious institutions and organizations not operated for profit.

(4)       Qualified retirement facilities whose property is excluded from property tax under G.S. 105-278.6A.

(5) A university affiliated nonprofit organization that procures, designs, constructs, or provides facilities to, or for use by, a constituent institution of The University of North Carolina. For purposes of this subdivision, a nonprofit organization includes an entity exempt from taxation as a disregarded entity of the nonprofit organization.

Sales and use tax liability indirectly incurred by a nonprofit entity on building materials, supplies, fixtures, and equipment that become a part of or annexed to any building or structure that is owned or leased by the nonprofit entity and is being erected, altered, or repaired for use by the nonprofit entity for carrying on its nonprofit activities is considered a sales or use tax liability incurred on direct purchases by the nonprofit entity.

A hospital that is not allowed a refund under this subsection of sales and use taxes paid on its direct purchases of tangible personal property is allowed a semiannual refund of sales and use taxes paid by it on medicines and drugs purchased for use in carrying out its work.

The refunds allowed under this subsection for certain nonprofit entities and for medicines and drugs purchased by hospitals do not apply to organizations, corporations, and institutions that are owned and controlled by the United States, the State, or a unit of local government, except hospital facilities created under Article 2 of Chapter 131E of the General Statutes and nonprofit hospitals owned and controlled by a unit of local government that elect to receive semiannual refunds under this subsection instead of annual refunds under subsection (c).

A request for a refund must be in writing and must include any information and documentation required by the Secretary. A request for a refund for the first six months of a calendar year is due the following October 15; a request for a refund for the second six months of a calendar year is due the following April 15."

SECTION 2.  This act becomes effective January 1, 2004, and applies to purchases made on or after that date. Notwithstanding G.S. 105-164.14(b), a request for a refund of sales and use tax paid for the period January 1, 2004, through December 31, 2007, is timely filed if it is submitted to the Secretary of Revenue by October 15, 2008.

In the General Assembly read three times and ratified this the 18^th day of July, 2008.

                                                                    s/ Marc Basnight

                                                                         President Pro Tempore of the Senate

                                                                    s/ Joe Hackney

                                                                         Speaker of the House of Representatives

                                                                    s/ Michael F. Easley

                                                                         Governor

Approved 3:26 a.m. this 3^rd day of August, 2008