GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1993

H	1 

HOUSE BILL 933*

Short Title:  Use of Printer/No Nexus.	(Public)
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Sponsors: Representative Robinson.
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Referred to:  Judiciary II.
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April 14, 1993

A BILL TO BE ENTITLED
AN ACT TO PROMOTE THE USE OF PRINTING FACILITIES IN NORTH CAROLINA BY PROVIDING THAT AN OUT-OF-STATE ENTITY WHO CONTRACTS WITH A NORTH CAROLINA PRINTER IS NOT DOING BUSINESS IN NORTH CAROLINA FOR TAX PURPOSES INCIDENT TO PRINTING.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 105-114(b)(3) reads as rewritten:
"(3)	The term 'doing business' shall mean and include each and every act, power or privilege exercised or enjoyed in this State, as an incident to, or by virtue of the powers and privileges acquired by the nature of such organizations whether the form of existence be corporate, associate, joint-stock company or common-law trust.  The following business contacts with the State shall not, however, be considered in determining whether a corporation is doing business within the State; the corporation contracts with an unrelated commercial printer for printing in this State and, in connection with the contract,
a.	The printer conducts activities at the printer's premises on behalf of the corporation relating to the production or distribution of the printed product; and
b.	The corporation has the following on or at the premises of the printer:
1.	Personal property that consists of printed product, property that becomes part of printed product, or property, other than property leased to the printer, with which printed product is produced; and
2.	An agent or employee who is in this State temporarily and periodically to inspect the printing process or printed product.
	   A corporation's delivery, by mail or otherwise, of printed product to final destinations within the State, or making of mail-order sales, as defined in G.S. 105-164.3, shall, however, be considered in determining whether the corporation is doing business in this State."
Sec. 2.  G.S. 105-130.2 is amended by adding a new subdivison to read:
"(1d)	Doing business. – The operation of a business enterprise or business activity in this State for economic gain.  The following business contacts with the State shall not, however, be considered in determining whether a corporation is doing business within the State; the corporation contracts with an unrelated commercial printer for printing in this State and, in connection with the contract,
a.	The printer conducts activities at the printer's premises on behalf of the corporation relating to the production or distribution of the printed product; and
b.	The corporation has the following on or at the premises of the printer:
1.	Personal property that consists of printed product, property that becomes part of printed product, or property, other than property leased to the printer, with which printed product is produced; and
2.	An agent or employee who is in this State temporarily and periodically to inspect the printing process or printed product.
   A corporation's delivery, by mail or otherwise, of printed product to final destinations within the State, or making of mail-order sales, as defined in G.S. 105-164.3, shall, however, be considered in determining whether the corporation is doing business in this State."
Sec. 3.  G.S. 105-164.3(5) reads as rewritten:
"(5)	'Engaged in business' means maintaining, occupying or using permanently or temporarily, directly or indirectly, or through a subsidiary or agent, by whatever name called, any office, place of distribution, sales or sample room or place, warehouse or storage place, or other place of business, for the selling or delivering of tangible personal property for storage, use or consumption in this State, or permanently or temporarily, directly or through a subsidiary, having any representative, agent, salesman, canvasser or solicitor operating in this State in such selling or delivering, and the fact that any corporate retailer, agent or subsidiary engaged in business in this State may not be legally domesticated or qualified to do business in this State is immaterial.  It also means maintaining in this State, either permanently or temporarily, directly or through a subsidiary, tangible personal property for the purpose of lease or rental.  It also means making a mail order sale, as defined in this section, if one of the conditions listed in G.S. 105-164.8(b) is met.  The following business contacts with the State shall not, however, be considered in determining whether a person is engaged in business in this State; the person contracts with an unrelated commercial printer for printing in this State and, in connection with the contract,
a.	The printer conducts activities at the printer's premises on behalf of the person relating to the production or distribution of the printed product; and
b.	The person has the following on or at the premises of the printer:
1.	Personal property that consists of printed product, property that becomes part of printed product, or property, other than property leased to the printer, with which printed product is produced; and
2.	An agent or employee who is in this State temporarily and periodically to inspect the printing process or printed product.
	   A person's delivery, by mail or otherwise, of printed product to final destinations within the State, or making of mail-order sales, as defined in G.S. 105-164.3, shall, however, be considered in determining whether the person is engaged in business in this State."
Sec. 4.  G.S. 105-164.3(14) reads as rewritten:
"(14)	'Retailer' means and includes every person engaged in the business of making sales of tangible personal property at retail, either within or without this State, or peddling the same or soliciting or taking orders for sales, whether for immediate or future delivery, for storage, use or consumption in this State and every manufacturer, producer or contractor engaged in business in this State and selling, delivering, erecting, installing or applying tangible personal property for use in this State notwithstanding that said property may be permanently affixed to a building or realty or other tangible personal property. 'Retailer' also means a person who makes a mail order sale, as defined in this section, if one of the conditions listed in G.S. 105-164.8(b) is met.  Provided, however, that when in the opinion of the Secretary it is necessary for the efficient administration of this Article to regard any salesmen, solicitors, representatives, consignees, peddlers, truckers or canvassers as agents of the dealers, distributors, consignors, supervisors, employers or persons under whom they operate or from whom they obtain the tangible personal property sold by them regardless of whether they are making sales on their own behalf or on behalf of such dealers, distributors, consignors, supervisors, employers or persons, the Secretary may so regard them and may regard the dealers, distributors, consignors, supervisors, employers or persons as 'retailers' for the purpose of this Article.  If a printer produces and distributes printed material at or from its facility for an unrelated customer and the customer incurs liability under this Article for activity not related to the printing, the printer may not be regarded as the customer's agent for the purpose of collecting the tax due from the customer."
Sec. 5.  This act is effective for taxable periods beginning on or after January 1, 1993.