GENERAL ASSEMBLY OF NORTH CAROLINA

SECOND EXTRA SESSION 1996

S	1 

SENATE BILL 22

Short Title:  Repeal Privilege License Taxes.	(Public)

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Sponsors: Senators Webster, Cochrane; Davis, Hartsell, Carpenter, Forrester, Ballantine, East, McDaniel, Little, Blust, Smith, Kincaid, Carrington, Clark, Blackmon, Ledbetter, Foxx, Horton, Simpson, Allran, Page, and Shaw.

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Referred to:  Finance.

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July 10, 1996

A BILL TO BE ENTITLED
AN ACT TO REPEAL MOST STATE PRIVILEGE LICENSE TAXES.
The General Assembly of North Carolina enacts:
Section 1.  The following sections of Article 2 of Chapter 105 of the General Statutes are repealed:
G.S. 105-36	Amusements – Manufacturing, selling, leasing, or distributing moving picture films.
G.S. 105-36.1	Amusements – Outdoor theatres.
G.S. 105-37	Amusements – Moving pictures – Admission.
G.S. 105-41	Attorneys-at-law and other professionals.
G.S. 105-42	Private detectives and investigators.
G.S. 105-45	Collecting agencies.
G.S. 105-46	Undertakers and retail dealers in coffins.
G.S. 105-50	Pawnbrokers. 
G.S. 105-51.1	Alarm systems.
G.S. 105-53	Peddlers, itinerant merchants, and specialty market operators.
G.S. 105-54	Contractors and construction companies.
G.S. 105-55	Installing elevators and automatic sprinkler systems.
G.S. 105-58	Fortune tellers, palmists, etc.
G.S. 105-60	Day-care facilities.
G.S. 105-61	Hotels, motels, tourist courts and tourist homes.
G.S. 105-62	Restaurants.
G.S. 105-65	Music machines.
G.S. 105-65.1	Merchandising dispensers and weighing machines.
G.S. 105-66.1	Electronic video games.
G.S. 105-70	Packinghouses.
G.S. 105-72	Persons, firms, or corporations selling certain oils.
G.S. 105-74	Pressing clubs, dry cleaning plants, and hat blockers.
G.S. 105-75.1	Municipal license tax on barbershops and beauty salons.
G.S. 105-77	Tobacco warehouses.
G.S. 105-80	Firearms dealers and dealers in other weapons.
G.S. 105-85	Laundries.
G.S. 105-86	Outdoor advertising.
G.S. 105-89	Automobiles, wholesale supply dealers and service stations.
G.S. 105-89.1	Motorcycle dealers.
G.S. 105-90	Emigrant and employment agents.
G.S. 105-91	Plumbers, heating contractors, and electricians.
G.S. 105-97	Manufacturers of ice cream.
G.S. 105-98	Branch or chain stores.
G.S. 105-99	Wholesale distributors of motor fuels.
G.S. 105-102.1	Certain cooperative associations.
G.S. 105-102.5	General business license.
Sec. 2.  G.S. 105-33(b) reads as rewritten:
"(b)	If the business made taxable or the privilege to be exercised under this Article is carried on at two or more separate places, a separate State license for each place is required.  "
Sec. 3.  G.S. 105-33(d) reads as rewritten:
"(d)	A license issued for a tax year for the conduct of a business at a specified location shall upon a sale or transfer of the business be deemed a sufficient license for the succeeding purchaser for the conduct of the business specified at such location for the balance of the tax year: Provided, that if the holder of a license under this schedule moves the business for which a license has been paid to another location, a new license may be issued to the licensee at a new location for the balance of the license year, upon surrender of the original license for cancellation and the payment of a fee of five dollars ($5.00) for each license certificate reissued."
Sec. 4.  G.S. 105-38(g) is repealed.
Sec. 5.  G.S. 105-109.1 reads as rewritten:
"§ 105-109.1.  Interest.
The taxes on gross receipts levied in G.S. 105-37.1(a) and G.S. 105-38(f), the tax on installment paper dealers levied in G.S. 105-83(b), and the tax on publishers of newsprint publications levied in G.S. 105-102.6, shall bear interest at the rate established under G.S. 105-241.1(i) from the time the taxes were due until the taxes are paid."
Sec. 6.  G.S. 153A-152 reads as rewritten:
"§ 153A-152.  Privilege license taxes.
A county may levy privilege license taxes on trades, occupations, professions, businesses, and franchises to the extent authorized by Article 2 of Chapter 105 of the General Statutes and any other acts of the General Assembly.  A county may levy privilege license taxes to the extent formerly authorized by the following sections of Article 2 of Chapter 105 of the General Statutes before they were repealed:
G.S. 105-50	Pawnbrokers.
G.S. 105-53	Peddlers, itinerant merchants, and specialty market operators.
G.S. 105-55	Installing elevators and automatic sprinkler systems.
G.S. 105-58	Fortune tellers, palmists, etc.
G.S. 105-65	Music machines.
G.S. 105-66.1	Electronic video games.
G.S. 105-80	Firearms dealers and dealers in other weapons.
G.S. 105-89	Automobiles, wholesale supply dealers and service stations.
G.S. 105-89.1	Motorcycle dealers.
G.S. 105-90	Emigrant and employment agents.
G.S. 105-102.5	General business license."
Sec. 7.  G.S. 160A-211 reads as rewritten:
"§ 160A-211.  Privilege license taxes.
(a)	Authority. – Except as otherwise provided by law, a city shall have power to levy privilege license taxes on all trades, occupations, professions, businesses, and franchises carried on within the city. A city may levy privilege license taxes on the businesses that were formerly taxed by the State under the following sections of Article 2 of Chapter 105 of the General Statutes only to the extent the sections authorized cities to tax the businesses before the sections were repealed:
G.S. 105-36	Amusements – Manufacturing, selling, leasing, or distributing moving picture films.
G.S. 105-36.1	Amusements – Outdoor theatres.
G.S. 105-37	Amusements – Moving pictures – Admission.
G.S. 105-41	Attorneys-at-law and other professionals.
G.S. 105-42	Private detectives and investigators.
G.S. 105-45	Collecting agencies.
G.S. 105-46	Undertakers and retail dealers in coffins.
G.S. 105-50	Pawnbrokers.
G.S. 105-51.1	Alarm systems.
G.S. 105-53	Peddlers, itinerant merchants, and specialty market operators.
G.S. 105-54	Contractors and construction companies.
G.S. 105-55	Installing elevators and automatic sprinkler systems.
G.S. 105-61	Hotels, motels, tourist courts and tourist homes.
G.S. 105-62	Restaurants.
G.S. 105-65	Music machines.
G.S. 105-65.1	Merchandising dispensers and weighing machines.
G.S. 105-66.1	Electronic video games.
G.S. 105-72	Persons, firms, or corporations selling certain oils.
G.S. 105-74	Pressing clubs, dry cleaning plants, and hat blockers.
G.S. 105-77	Tobacco warehouses.
G.S. 105-80	Firearms dealers and dealers in other weapons.
G.S. 105-85	Laundries.
G.S. 105-86	Outdoor advertising.
G.S. 105-89	Automobiles, wholesale supply dealers and service stations.
G.S. 105-89.1	Motorcycle dealers.
G.S. 105-90	Emigrant and employment agents.
G.S. 105-91	Plumbers, heating contractors, and electricians.
G.S. 105-97	Manufacturers of ice cream.
G.S. 105-98	Branch or chain stores.
G.S. 105-99	Wholesale distributors of motor fuels.
G.S. 105-102.1	Certain cooperative associations.
G.S. 105-102.5	General business license.
(b)	Barbershop and Salon Restriction. –  A privilege license tax levied by a city on a barbershop or a beauty salon may not exceed two dollars and fifty cents ($2.50) for each barber, manicurist, cosmetologist, beautician, or other operator employed in the barbershop or beauty salon."
Sec. 8.  Chapter 66 of the General Statutes is amended by adding a new Article to read:
"ARTICLE 31.
"Peddlers, Itinerant Merchants, and Specialty Markets.
"§ 66-230.  Definitions.
The following definitions apply in this Article:
(1)	Itinerant merchant. – A person, other than a merchant with an established retail store in the county, who transports an inventory of goods to a building, vacant lot, or other location in a county and who, at that location, displays the goods for sale and sells the goods at retail or offers the goods for sale at retail.
(2)	Peddler. – A person who travels from place to place with an inventory of goods, who sells the goods at retail or offers the goods for sale at retail, and who delivers the identical goods.
(3)	Person. – An individual, a firm, an association, a partnership, a limited liability company, a corporation, a unit of government, or another group acting as a unit.
(4)	Specialty market. – A location, other than a permanent retail store, where space is rented to others for the purpose of selling goods at retail or offering goods for sale at retail.
(5)	Specialty market operator. – A person, other than the State or a unit of local government, who rents space, at a location other than a permanent retail store, to others for the purpose of selling goods at retail or offering goods for sale at retail.
(6)	Specialty market vendor. – A person, other than a merchant with an established retail store in the county, who transports an inventory of goods to a specialty market and, at that location, displays the goods for sale and sells the goods at retail or offers the goods for sale at retail.
"§ 66-231.  Itinerant merchant and peddler must have permission of property owner.
An itinerant merchant or a peddler who travels from place to place by vehicle must obtain a written statement signed by the owner or lessee of any property upon which the itinerant merchant or peddler offers goods for sale giving the owner's or lessee's permission to offer goods for sale upon the property of the owner or lessee.  This statement must clearly state the name of the owner or lessee, the location of the premises for which the permission is granted, and the dates during which the permission is valid.  The statement must be conspicuously and prominently displayed, so as to be visible for inspection by patrons of the itinerant merchant or peddler, at the places or locations at which the goods are to be sold or offered for sale.
"§ 66-232.  Display and possession of retail sales tax license.
(a)	When Required. – An itinerant merchant must keep the merchant's retail sales tax license conspicuously and prominently displayed, so as to be visible for inspection by patrons of the itinerant merchant at the places or locations at which the goods are to be sold or offered for sale.  A peddler must carry the peddler's retail sales tax license when the peddler offers goods for sale and must produce the license upon the request of any customer, State or local revenue agent, or law enforcement agent.  A specialty market vendor must keep the retail sales tax license conspicuously and prominently displayed, so as to be visible for inspection by patrons of the specialty market vendor at the places or locations at which the goods are to be sold or offered for sale.  A specialty market operator must have its retail sales tax license, if any, available for inspection during all times that the specialty market is open and must produce it upon the request of any customer, State or local revenue agent, or law enforcement agent.
(b)	Compliance. – The requirement that a retail sales tax license be displayed is satisfied if the vendor displays either of the following:
(1)	A copy of the license.
(2)	Evidence that the license has been applied for and the applicable license fee has been paid within 30 days before the date the license was required to be displayed.
"§ 66-233.  Display of identification upon request.
Upon the request of any customer, State or local revenue agent, or law enforcement agent, a peddler, an itinerant merchant, a specialty market operator, or a specialty market vendor must provide its name and permanent address.  If the peddler, itinerant merchant, specialty market operator, or specialty market vendor is not a corporation, he or she must, upon the request of any customer, State or local revenue agent, or law enforcement agent, provide a valid drivers license, a special identification card issued under G.S. 20-37.7, military identification, or a passport bearing a physical description of the person named reasonably describing the peddler, itinerant merchant, specialty market operator, or specialty market vendor.  If the peddler, itinerant merchant, specialty market operator, or specialty market vendor is a corporation, it must, upon the request of any customer, State or local revenue agent, or law enforcement agent, give the name and registered agent of the corporation and the address of the registered office of the corporation, as filed with the Secretary of State.
"§ 66-234.  Records of source of new merchandise.
(a)	Record Required. – Each peddler, itinerant merchant, and specialty market vendor must keep a written record of the source of new merchandise the merchant offers for sale. The record must be a receipt or an invoice from the person who sold the merchandise to the merchant. The invoice or receipt must specifically identify the product being sold by product name and quantity purchased and must contain the complete business name of the seller and a description of the type of business. If the seller was an individual, the receipt or invoice must contain the seller's drivers license number, its state of issuance and expiration date, and the seller's date of birth. The merchant must verify this information by comparing the seller's drivers license to the invoice or receipt and signing the invoice or receipt. A special identification card issued by the Division of Motor Vehicles may be used in place of the seller's drivers license for the purposes of providing and verifying information required under this section. If the seller was a corporation, the receipt or invoice must contain the corporation's federal tax identification number, the state of incorporation, the name and address of the corporation's registered agent in this State, if any, and the corporation's principal office address.
(b)	Keeping the Record. –  Each peddler, itinerant merchant, and specialty market vendor must keep the record required by subsection (a) of this section with the new merchandise being offered for sale.  Once the new merchandise is sold, the merchant must keep the record for a period of three years after the date of the sale.
(c)	Displaying Record or Affidavit. –  Upon the request of a law enforcement agent, a peddler, an itinerant merchant, or a specialty market vendor must produce either of the following:
(1)	The record required by subsection (a) of this section of the source of new merchandise the merchant offers for sale.
(2)	An affidavit under oath or affirmation identifying the source of new merchandise the merchant offers for sale, including the name and address of the seller, the license number of any auctioneer seller, and the date and place of purchase of the merchandise.
A merchant's failure to produce the requested record or an affidavit within a reasonable time of request by a law enforcement agent is prima facie evidence of possession of stolen property.  Pending the production of the requested record or affidavit, the agent may take the merchandise into custody as evidence at the time the request is made.  Merchandise impounded under this subsection must be disposed of in accordance with G.S. 15-11.1.
(d)	Posted Notice. – A specialty market operator must conspicuously post in plain view of all specialty market vendors a sign informing all vendors that failure to produce, upon the request of a law enforcement agent, either the records or affidavit required under this section is prima facie evidence of possession of stolen property.
"§ 66-235.  Specialty market registration list.  
A specialty market operator must maintain a daily registration list of all specialty market vendors selling or offering goods for sale at the specialty market.  The registration list must clearly and legibly show each specialty market vendor's name, permanent address, and retail sales and use tax registration number.  The specialty market operator must require each specialty market vendor to exhibit a valid retail sales tax license for visual inspection by the specialty market operator at the time of registration, and must require each specialty market vendor to keep the retail sales tax license conspicuously and prominently displayed, so as to be visible for inspection by patrons of the specialty market vendor at the places or locations at which the goods are offered for sale.  Each daily registration list maintained pursuant to this section must be retained by the specialty market operator for no less than two years and must at any time be made available upon request to any law enforcement officer.
"§ 66-236.  Exemptions from Article.
This Article does not apply to the following:
(1)	A peddler or an itinerant merchant who meets any of the following descriptions:
a.	Sells farm or nursery products produced by the merchant.
b.	Sells crafts or goods made by the merchant or the merchant's own household personal property.
c.	Is a nonprofit charitable, educational, religious, scientific, or civic organization.
d.	Sells printed material, wood for fuel, ice, seafood, meat, poultry, livestock, eggs, dairy products, bread, cakes, or pies.
e.	Is an authorized automobile dealer licensed pursuant to Chapter 20 of the General Statutes.
(2)	A peddler who maintains a fixed permanent location from which at least ninety percent (90%) of the peddler's sales are made but who sells some goods in the county of the fixed location by peddling.
(3)	An itinerant merchant who meets any of the following descriptions:
a.	Locates at a farmer's market.
b.	Is part of the State Fair or an agriculture fair that is licensed by the Commissioner of Agriculture pursuant to G.S. 106-520.3.
c.	Sells goods at an auction conducted by an auctioneer licensed pursuant to Chapter 85B of the General Statutes.
(4)	A peddler who complies with the requirements of G.S. 25A-38 through G.S. 25A-42, or who complies with the requirements of G.S. 14-401.13.
"§ 66-237.  Misdemeanor violations.
(a)	Class 1 Misdemeanors. – A person who does any of the following commits a Class 1 misdemeanor:
(1)	Fails to keep a record of new merchandise offered for sale as required by G.S. 66-234.
(2)	Fails to produce a record or an affidavit pursuant to G.S. 66-234.
(3)	Falsifies a record of new merchandise required by G.S. 66-234.
(b)	Class 3 Misdemeanors. – A person who does any of the following commits a Class 3 misdemeanor:
(1)	Knowingly gives false information when registering pursuant to G.S. 66-235.
(2)	If the person is an itinerant merchant or a specialty market vendor, fails to display the retail sales tax license as required by G.S. 66-232.
(3)	If the person is a peddler or specialty market operator, fails to produce the retail sales tax license as required by G.S. 66-232.
(4)	Fails to obtain the permission of the property owner as required by G.S. 66-231.
(5)	Fails to provide name, address, or identification upon request as required by G.S. 66-233 or provides false information in response to the  request.
(6)	If the person is a specialty market operator, fails to maintain the daily registration list as required by G.S. 66-235.
(c)	Defense. – Whenever satisfactory evidence is presented in any court of the fact that a retail sales tax license was not displayed or produced as required by G.S. 66-232 or that permission to use property was not displayed as required by G.S. 66-231, the person charged may not be found guilty of that violation if the person produces in court a valid retail sales tax license or valid permission, respectively, that had been issued prior to the time the person was charged.
"§ 66-238.  Local regulation not affected.
This Article does not affect the authority of a county or city to impose additional requirements on peddlers, itinerant merchants, specialty market vendors, or specialty market operators by an ordinance adopted under G.S. 153A-125 or G.S. 160A-178."
Sec. 9.  This act does not affect the rights or liabilities of the State, a taxpayer, or another person arising under a statute amended or repealed by this act before its amendment or repeal; nor does it affect the right to any refund or credit of a tax that would otherwise have been available under the amended or repealed statute before its amendment or repeal.
Sec. 10.  This act becomes effective July 1, 1996.