A BILL TO BE ENTITLED
AN ACT to amend the sales and use tax statutes to conform to the streamlined sales tax agreement.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 105‑164.3 reads as rewritten:
"§ 105‑164.3.  Definitions.
The following definitions apply in this Article:
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(4b)	Computer supplies. – Items that are considered to be a 'school computer supply' under the Streamlined Agreement.
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(10)	Food. – Substances that are sold for ingestion or chewing by humans and are consumed for their taste or nutritional value. The substances may be in liquid, concentrated, solid, frozen, dried, or dehydrated form. The term does not include an alcoholic beverage, as defined in G.S. 105‑113.68, or a tobacco product, as defined in G.S. 105-113.4.
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(37a)	School supplies. – Items commonly used by students in the course of their studies and that are considered to be a 'school supply', a 'school art supply', or a 'school instructional material' under the Streamlined Agreement.
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(45a)	Streamlined Agreement. – The Streamlined Sales and Use Tax Agreement adopted November 12, 2002, as amended on November 19, 2003, and on November 16, 2004."SECTION 2.(a)  G.S. 105‑164.13B(a) reads as rewritten:
"(a)	State Exemption. – Food is exempt from the taxes imposed by this Article unless the food is included in one of the subdivisions in this subsection. The following food items are subject to tax:
	
(2)	Dietary supplements.
(3)	Food sold through a vending machine.
(4)	Prepared food.
(5)	Soft drinks.
(6)	(Repealed effective January 1, 2004) Candy, unless the item is purchased for home consumption and would be exempt if purchased under the Federal Food Stamp Program, 7 U.S.C. § 51."
SECTION 2.(b)  Subdivision (b)(5) of Section 5 of Part IV of Chapter 908 of the 1983 Session Laws, as amended by Chapter 821 of the 1989 Session Laws and S.L. 2001‑347, reads as rewritten:
"(b)	Definitions. The definitions in G.S. 105‑164.3 apply to this Part insofar as they are not inconsistent with the provisions of this Part. In addition, the following definitions apply in this Part:
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(5)	Prepared Food and Beverages. The term includes the following:
a.	Prepared food, as defined in G.S. 105‑164.3.
b.	An alcoholic beverage, as defined in G.S. 18B‑101, that meets at least one of the conditions of prepared food under G.S. 105‑164.3."
SECTION 2.(c)  Subdivision (a)(2) of Section 2 of Chapter 413 of the 1993 Session Laws, as amended by S.L. 2001‑347, reads as rewritten:
"Sec. 2. Definitions; Sales and Use Tax Statutes. – (a)  The definitions in G.S. 105‑164.3 apply to this act to the extent they are not inconsistent with the provisions of this act. In addition, the following definitions apply in this act:
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(2)	Prepared food and beverages. – The term includes the following:
a.	Prepared food, as defined in G.S. 105‑164.3.
b.	An alcoholic beverage, as defined in G.S. 18B‑101, that meets at least one of the conditions of prepared food under G.S. 105‑164.3."
SECTION 2.(d)  Section 2 of Chapter 449 of the 1985 Session Laws, as amended by Chapter 826 of the 1985 Session Laws, Chapter 177 of the 1991 Session Laws, and S.L. 2001‑347, reads as rewritten:
"Sec. 2. Definitions. The definitions in G.S. 105‑164.3 apply in this act. In addition, the following definitions apply in this act.
(1)	Net proceeds. Gross proceeds less the cost to the county of administering and collecting the tax.
(2)	Prepared food and beverages. The term includes the following:
a.	Prepared food, as defined in G.S. 105‑164.3.
b.	An alcoholic beverage, as defined in G.S. 18B‑101, that meets at least one of the conditions of prepared food under G.S. 105‑164.3."
SECTION 2.(e)  Subsection (b) of Section 1 of Chapter 449 of the 1993 Session Laws, as amended by S.L. 2001‑347, reads as rewritten:
"(b)	Definitions; Sales and Use Tax Statutes. – The definitions in G.S. 105‑164.3 apply to this section to the extent they are not inconsistent with the provisions of this section. The provisions of Article 5 and Article 9 of Chapter 105 of the General Statutes apply to this section to the extent they are not inconsistent with the provisions of this section.For the purposes of this section, the term "prepared food and beverages" includes the following:
(1)	Prepared food, as defined in G.S. 105‑164.3.
(2)	An alcoholic beverage, as defined in G.S. 18B‑101, that meets at least one of the conditions of prepared food under G.S. 105‑164.3. 
"
SECTION 2.(f)  Subdivision (3) of Section 2 of Chapter 594 of the 1991 Session Laws, as amended by S.L. 2001‑347, reads as rewritten:
"Sec. 2. Definitions. The definitions in G.S. 105‑164.3 apply to this act to the extent they are not inconsistent with the provisions of this act. The following definitions also apply in this act:
…
(3)	Prepared food and beverage. The term includes the following:
a.	Prepared food, as defined in G.S. 105‑164.3.
b.	An alcoholic beverage, as defined in G.S. 18B‑101, that meets at least one of the conditions of prepared food under G.S. 105‑164.3."
SECTION 3.  G.S. 105‑164.13C(a) reads as rewritten:
"(a)	The taxes imposed by this Article do not apply to the following items of tangible personal property if sold between 12:01A.M. on the first Friday of August and 11:59 P.M. the following Sunday:
(1)	Clothing with a sales price of one hundred dollars ($100.00) or less per item.
(2)	School supplies with a sales price of one hundred dollars ($100.00) or less per item.
(3)	Computers with a sales price of three thousand five hundred dollars ($3,500) or less per item.
(4)	Computer supplies with a sales price of two hundred fifty dollars ($250.00) or less per item.
(5)	Sport or recreational equipment with a sales price of fifty dollars ($50.00) or less per item."
SECTION 4.  G.S. 105‑164.28 reads as rewritten:
"§ 105‑164.28.  Certificate of resale.
(a)	Seller's Responsibility. – A seller who accepts a certificate of resale from a purchaser of tangible personal property has the burden of proving that the sale was not a retail sale unless all of the following conditions are met:
(1)	For a sale made in person, the certificate is signed by the purchaser and states the purchaser's name, address, registration number, and type of business.
(2)	For a sale made in person, the tangible personal property sold is typically used in the type of business stated on the certificate.
(3)	For a sale made over the Internet or by other remote means, the sales tax registration number given by the purchaser matches the number on the Department's registry.
(b)	Purchaser's Liability. – A purchaser who does not resell property purchased under a certificate of resale is liable for any tax subsequently determined to be due on the sale. "
SECTION 5.  G.S. 105‑164.42B(1) reads as rewritten:
"§ 105‑164.42B.  Definitions.
The following definitions apply in this Part:
(1)	Agreement. –Streamlined Agreement, as defined in G.S. 105‑164.3.
…."
SECTION 6.  This act is effective when it becomes law.