GENERAL ASSEMBLY OF NORTH CAROLINA
1991 SESSION

CHAPTER 221
HOUSE BILL 11

AN ACT TO APPLY THE TIRE TAX, USED TO PAY FOR THE DISPOSAL OF SCRAP TIRES, TO NEW TIRES FOR ROAD CONSTRUCTION EQUIPMENT AND OTHER NEW VEHICLE TIRES.

The General Assembly of North Carolina enacts:

Section 1.  Chapter 105 of the General Statutes is amended by adding a new Article to read:
"ARTICLE 5B.
"Scrap Tire Disposal Tax.
"§ 105-187.15.  Definitions.
The definitions in G.S. 105-164.3 apply to this Article, except that the term 'sale' does not include lease or rental, and the following definitions apply to this Article:
(1)	Scrap tire.  A tire that is no longer suitable for its original, intended purpose because of wear, damage, or defect.
(2)	Tire.  A continuous solid or pneumatic rubber covering encircling a wheel.
"§ 105-187.16.  Tax imposed.
A privilege tax is imposed on a tire retailer at the rate of one percent (1%) of the sales price of each new tire sold at retail by the retailer.  A privilege tax is imposed on a tire retailer and on a tire wholesale merchant at the rate of one percent (1%) of the sales price of each new tire sold by the retailer or wholesale merchant to a wholesale merchant or retailer for placement on a vehicle offered for sale, lease, or rental by the retailer or wholesale merchant.  An excise tax is imposed on a new tire purchased for storage, use, or consumption in this State or for placement in this State on a vehicle offered for sale, lease, or rental.  This excise tax is at the rate of one percent (1%) of the cost price of the tire.  These taxes are in addition to all other taxes.
"§ 105-187.17.  Administration.
The privilege tax this Article imposes on a tire retailer who sells new tires at retail is an additional State sales tax and the excise tax this Article imposes on the storage, use, or consumption of a new tire in this State is an additional State use tax.  Except as otherwise provided in this Article, these taxes shall be collected and administered in the same manner as the State sales and use taxes imposed by Article 5 of this Chapter.  As under Article 5 of this Chapter, the additional State sales tax paid when a new tire is sold is a credit against the additional State use tax imposed on the storage, use, or consumption of the same tire.
The privilege tax this Article imposes on a tire retailer and on a tire wholesale merchant who sell new tires for placement in this State on a vehicle offered for sale, lease, or rental is a tax on the wholesale sale of the tires.  This tax and the excise tax this Article imposes on a new tire purchased for placement in this State on a vehicle offered for sale, lease, or rental shall, to the extent practical, be collected and administered as if they were additional State sales and use taxes.  The privilege tax paid when a new tire is sold for placement on a vehicle offered for sale, lease, or rental is a credit against the use tax imposed on the purchase of the same tire for placement in this State on a vehicle offered for sale, lease, or rental.
"§ 105-187.18.  Exemptions.
The taxes imposed by this Article do not apply to:
(1)	Bicycle tires and other tires for vehicles propelled by human power.
(2)	Recapped tires.
The exemptions in G.S. 105-164.13 and the refunds allowed in G.S. 105-164.14 do not apply to the taxes imposed by this Article.
"§ 105-187.19.  Use of tax proceeds.
The Secretary shall distribute the taxes collected under this Article, less the cost of collecting the taxes, in accordance with this section.  The Secretary shall retain the cost of collection as reimbursement to the Department of Revenue.
Each quarter, the Secretary shall credit ten percent (10%) of the net tax proceeds to the Solid Waste Management Trust Fund and shall distribute ninety percent (90%) of the net tax proceeds among the counties on a per capita basis according to the most recent annual population estimates certified to the Secretary by the Office of State Budget and Management.  A county may use funds distributed to it under this section only as provided in G.S. 130A-309.54."
Sec. 2.  G.S. 130A-309.53(7) reads as rewritten:
"(7)	'Tire' means a continuous solid or pneumatic rubber covering that encircles the wheel of a vehicle and is subject to the tax imposed by Article 5B of Chapter 105."
Sec. 3.  G.S. 130A-309.54 reads as rewritten:
"§ 130A-309.54.  Use of scrap tire tax proceeds.
		"	Article 5B of Chapter 105 imposes a tax on new tires to provide funds for the disposal of scrap tires.  A county may use proceeds of the tax distributed to it under that Article only for the disposal of scrap tires pursuant to the provisions of this Part or for the abatement of a nuisance pursuant to G.S. 130A-309.60.
	."
Sec. 4.  G.S. 130A-309.55 and G.S. 130A-309.56 are repealed.
Sec. 5.  G.S. 130A-309.58(e) reads as rewritten:
"(e)	A county shall provide, directly or by contract with another unit of local government or private entity, at least one site for scrap tire disposal for that county.  The unit of local government or contracting party may charge a disposal fee for the disposal of scrap tires only to the extent that the cost per tire of disposal exceeds the amount received by the county under G.S. 105-187.19 during the preceding 12-month period, divided by the number of tires disposed of within the county according to the tire disposal procedures during that period.  The unit of local government or contracting party may charge a disposal fee for the disposal of scrap tires regardless of whether a tax has been paid on the tire under Article 5B of Chapter 105 and regardless of the tire's place of origin."
Sec. 6.  This act becomes effective July 1, 1991.
In the General Assembly read three times and ratified this the 5th day of June, 1991.

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James C. Gardner
President of the Senate

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Daniel Blue, Jr.
Speaker of the House of Representatives