A BILL TO BE ENTITLED
AN ACT to reduce the tax on sales of equipment used for research and development.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 105‑187.51B reads as rewritten:
"§  105‑187.51B.   Tax imposed on  certain recyclers and research and development companies. 
(a)	Tax. – A privilege tax is imposed on the following:
(1)	A major recycling facility that purchases any of the following tangible personal property for use in connection with the facility:
a.	Cranes, structural steel crane support systems, and foundations related to the cranes and support systems.
 b.	Port and dock facilities.
 c.	Rail equipment.
 d.	Material handling equipment.
(2)	A research and development company in the physical, engineering, and life sciences that is included in Industry Group 541710 of NAICS, as defined in G.S. 105‑129.2, and that purchases equipment or an attachment or repair part for equipment that meets all of the following requirements:a.	Is capitalized by the company for tax purposes under the Code.
b.	Is used by the company in the  research and development of tangible personal property.
c.	Would be considered mill machinery under G.S. 105‑187.51 if it were purchased by a manufacturing industry or plant and used in the research and development of tangible personal property manufactured by the industry or plant.
(b)	Rate. – The tax is one percent (1%) of the sales price of the equipment or other tangible personal property. The maximum tax is eighty dollars ($80.00) per article."
SECTION 2.  This act becomes effective January 1, 2007.