GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1991

S	1 

SENATE BILL 942

Short Title:  Raise Admissions Tax/Libraries.	(Public)
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Sponsors: Senator Basnight.
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Referred to:  Finance.
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May 14, 1991

A BILL TO BE ENTITLED
AN ACT TO INCREASE THE STATE TAX ON GROSS RECEIPTS DERIVED FROM THE BUSINESS OF OFFERING ENTERTAINMENT OR AMUSEMENT FOR WHICH AN ADMISSION IS CHARGED, TO PROVIDE THAT MOTION PICTURES SHALL BE TAXED IN THE SAME WAY AS OTHER ENTERTAINMENT, TO PROVIDE THAT ADMISSIONS AND MEMBERSHIPS TO ATHLETIC AND RECREATIONAL FACILITIES ARE SUBJECT TO THE SAME GROSS RECEIPTS TAX, AND TO EARMARK THE ADDITIONAL REVENUES GENERATED BY THIS ACT FOR LIBRARIES.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 105-36.1 and G.S. 105-37 are repealed.
Sec. 2.  G.S. 105-37.1, as amended by Chapter 45 of the 1991 Session Laws, reads as rewritten:
"§ 105-37.1.  Amusements – Forms of amusement not otherwise taxed; admissions to athletic and recreational facilities.
(a)	 
Scope.  This section applies to every person, firm, or corporation:
(1)	Engaged in the business of providing any form of entertainment or amusement, not otherwise taxed or specifically exempted in this Article, for which an admission is charged.
(2)	Providing access to athletic or recreational facilities for which an admission is charged.
(3)	Providing access to athletic or recreational facilities for which a membership fee is charged.
(4)	Providing any dance or athletic contest, other than a high school or elementary school contest, for which an admission fee in excess of fifty cents (50¢) is charged.
(b)	Tax.  Every person, firm, or corporation engaged in an activity to which this section applies shall pay an annual license tax of fifty dollars ($50.00) for each location at which it engages in the activity.
In addition to the license tax levied above, the person, firm, or corporation shall pay an additional tax upon the gross receipts of the activity at the rate of five percent (5%).  Reports shall be made to the Secretary of Revenue, in the form prescribed by the Secretary, within the first 10 days of each month covering all the gross receipts for the previous month, and the gross receipts tax shall be paid monthly at the time the reports are made. The annual license tax levied in this subsection shall be treated as an advance payment of the gross receipts tax levied in this subsection, and the annual license tax shall be applied as a credit upon or advance payment of the gross receipts tax.
(c)	Exemptions.
(1)	School Contests.  No tax shall be levied on admission fees for high school and elementary school contests.
(2)	Certain School and Charitable Amusements.  Dances and other amusements actually promoted and managed by civic organizations and private and public secondary schools, shall not be subject to the license tax imposed by this section and the first one thousand dollars ($1,000) of gross receipts derived from these events shall be exempt from the gross receipts tax when the entire proceeds of the event are used exclusively for the school or civic and charitable purposes of the organizations and not to defray the expenses of the organization conducting the dance or amusement. The mere sponsorship of a dance or other amusement by such a school, civic, or fraternal organization does not exempt the dance or amusement, but the exemption shall apply only when the dance or amusement is actually managed and conducted by the school, civic, or fraternal organization and the proceeds are actually used as provided in this subdivision.
(3)	Arts Centers.  Dances and other amusements promoted and managed by a qualifying corporation that operates a center for the performing and visual arts are exempt from the license tax and the gross receipts tax imposed under this section if the dance or other amusement is held at the center. ‘Qualifying corporation' means a corporation that is exempt from income tax under G.S. 105-130.11(a)(3). "Center for the performing and visual arts”means a facility, having a fixed location, that provides space for dramatic performances, studios, classrooms and similar accommodations to organized arts groups and individual artists. This exemption shall not apply to athletic events.
(4)	Teen Centers.  The license and gross receipts taxes imposed by this section do not apply to a person, firm, or corporation that is exempt from income tax under Article 4 of this Chapter and is engaged in the business of operating a teen center. A ‘teen center' is a fixed facility whose primary purpose is to provide recreational activities, dramatic performances, dances, and other amusements exclusively for teenagers.
(5)	Cherokee Indian Entertainments.  No tax shall be collected pursuant to this section with respect to entertainments or amusements offered or given on the Cherokee Indian Reservation when the person, firm or corporation giving, offering, or managing the entertainment or amusement is authorized to do business on the Reservation and pays the tribal gross receipts levy to the tribal council.
	(d) Local Licenses. Counties shall not levy any license tax on the activity taxed under this section, but cities and towns may levy a license tax not in excess of one half the base tax levied under this section.
		(e) Still Dates Restricted.   It is not the purpose of this Article to discourage agricultural fairs in the State, and to further this cause, no carnival company taxable under this section may play a ‘still date' in any county where there is a regularly advertised agricultural fair, 30 days prior to the dates of the fair.  This subsection does not restrict the date on which a fair or tobacco festival may be held if (i) it is held by a veteran's organization or post chartered by Congress or organized and operated on a statewide or nationwide basis and (ii) the organization or post has held the fair or festival annually since before July 1, 1988."
Sec. 3.  G.S. 105-38(f) reads as rewritten:
"(f)	Upon all performances taxable under this section there is levied, in addition to the license tax levied in this section, a tax upon the gross receipts of such business at the rate of five percent (5%).  The license tax herein levied shall be treated as an advance payment of the tax upon gross receipts herein levied, and the license tax shall be applied as a credit upon or advance payment of the gross receipts tax. The Secretary of Revenue may adopt such regulations as may be necessary to effectuate the provisions of this section and shall prescribe the form and character of reports to be made, and shall have such authority of supervision as may be necessary to effectuate the purpose of this Subchapter."
Sec. 4.  Article 2 of Chapter 105 of the General Statutes is amended by adding a new section to read:
"§ 105-38.1.  Distribution of part of admissions tax for libraries.
(a)	Distribution. Of the net proceeds collected under G.S. 105-37.1 and G.S. 105-38, the Secretary shall, on a quarterly basis, set aside for distribution an amount equal to (i) all of the net proceeds collected under G.S. 105-37.1 from the gross receipts tax on motion picture businesses and the gross receipts tax on the activities described in G.S. 105-37.1(a)(2) and (3), plus (ii) forty percent (40%) of the net proceeds collected under G.S. 105-37.1 from the gross receipts tax on other activities, plus (iii) forty percent (40%) of the net proceeds collected under G.S. 105-38.  The amount set aside shall be disbursed as follows:
(1)	Two percent (2%) shall be credited to the Department of Cultural Resources to be used to provide grants to special libraries in the State under a grant program to be administered by the State Library Commission created in G.S. 143B-91.
(2)	Forty percent (40%) shall be credited to the Department of Cultural Resources to be distributed among the legally established municipal, county, and regional public libraries of the State.
(3)	Thirty-four percent (34%) shall be credited to the Board of Governors of The University of North Carolina to be distributed among the libraries of its constituent institutions.
(4)	Twenty-four percent (24%) shall be credited to the Department of Community Colleges to be distributed among the community college libraries of the State.
(b)	Use of Funds.  Funds distributed pursuant to this act may be used only to purchase library materials, as defined in G.S. 153A-262."
Sec. 5.  G.S. 105-102.5(d)(1) reads as rewritten:
"(1)	A person, firm, or corporation required to be licensed under G.S. 105-37.1, 105-62, 105-65.1, 105-74, 105-85, 105-89, or 105-89.1 is not required to procure for the same location the general business license imposed by this section."
Sec. 6.  G.S. 143B-90 reads as rewritten:
"§ 143B-90. State Library Commission – creation, powers and duties.
There is hereby created the State Library Commission of the Department of Cultural Resources. The State Library Commission has the following functions and duties:
(1)	To advise the Secretary of Cultural Resources on matters relating to the operation and services of the State Library.
(2)	To suggest programs to the Secretary to aid in the development of libraries statewide.
(3)	To advise the Secretary upon any matter the Secretary might refer to it.
(4)	To evaluate and approve the State Plan for Public Library Development.
(5)	To evaluate and approve the State Plan for Multitype Library Cooperation.
(6)	To evaluate and approve plans for federally funded library programs.
(7)	To evaluate and approve State Library policies for the acquisition of library materials.
(8)	To serve as a search committee to seek out, interview, and recommend to the Secretary one of more experienced and professionally trained librarians for the position of Director of the Division of State Library when a vacancy occurs, and to assist and cooperate with the Secretary in periodic reviews of the performance of the Director and the Division.
(9)	To serve as a screening and advisory committee to accept applications from special libraries for grants and to make recommendations to the Secretary for the award of grants to special libraries from funds credited to the Department pursuant to G.S. 105-38.1."
Sec. 7.  Section 4 of this act becomes effective October 1, 1991.  The remainder of this act becomes effective July 1, 1991.