A BILL TO BE ENTITLED
AN ACT to resolve problems with applying property tax to heavy equipment rented on a short‑term basis by replacing the property tax on this equipment with a tax on the gross receipts from renting the equipment.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 105‑275 is amended by adding a new subdivision to read:
"§ 105‑275.  Property classified and excluded from the tax base.
The following classes of property are hereby designated special classes under authority of Article V, Sec. 2(2), of the North Carolina Constitution and shall not be listed, appraised, assessed, or taxed:
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(42a)	Heavy equipment subject to a gross receipts tax under G.S. 153A‑156.1 and G.S. 160A‑215.2."
SECTION 2.  Article 7 of Chapter 153A of the General Statutes is amended by adding a new section to read:
"§ 153A‑156.1.  Heavy equipment gross receipts tax in lieu of property tax.
(a)	Definitions. – The following definitions apply in this section:
(1)	Heavy equipment. – Earthmoving or construction equipment that meets any of the following requirements:
a.	It is a self‑propelled vehicle that is not designed to be driven on a highway.
b.	It is industrial lift equipment, industrial material handling equipment, industrial electrical generation equipment, or a similar piece of industrial equipment.
c.	It is an attachment or an accessory for a vehicle or a piece of equipment described in this subdivision.
(2)	Short‑term lease or rental. – Defined in G.S. 105‑187.1.
(b)	A county may, by resolution, impose a tax at the rate of one and one‑tenth percent (1.1%) on the gross receipts from the short‑term lease or rental of heavy equipment by a person whose principal business is the short‑term lease or rental of heavy equipment at retail. The heavy equipment subject to this tax is exempt from property tax under G.S. 105‑275, and this tax provides an alternative to the property tax on equipment.
(c)	Administration. – Except as provided in this section, a county that imposes a tax under this section must administer the tax in the same manner as a tax imposed under G.S. 105‑164.4(a)(2). The gross receipts from the short‑term lease or rental of heavy equipment are subject to a tax under this section if the place of business from which the heavy equipment is leased or rented is located in the county. The penalties and collection remedies that apply to the payment of sales and use taxes under Article 5 of Chapter 105 of the General Statutes apply to this tax. The county finance officer has the same authority as the Secretary of Revenue in imposing these penalties and remedies. 
(d)	Payment. – A person whose principal business is the short‑term lease or rental of heavy equipment is required to remit a tax imposed by this section to the county finance officer. The tax is payable quarterly and is due by the last day of the month following the end of the quarter. The tax is intended to be added to the amount charged for the short‑term lease or rental of heavy equipment and paid to the heavy equipment business by the person to whom the heavy equipment is leased or rented.
(e)	Effective Date. – A tax imposed under this section becomes effective on the date set in the resolution imposing the tax. The date must be the first day of a calendar quarter and may not be sooner than the first day of the calendar quarter that begins at least two months after the date the resolution is adopted.
(f)	Repeal. – A county may, by resolution, repeal a tax imposed under this section. The repeal is effective on the date set in the resolution. The date must be the first day of a calendar quarter and may not be sooner than the first day of the calendar quarter that begins at least two months after the date the resolution is adopted."
SECTION 3.  Article 9 of Chapter 160A of the General Statutes is amended by adding a new section to read:
"§ 160A‑215.2.  Heavy equipment gross receipts tax in lieu of property tax.
(a)	Definitions. – The following definitions apply in this section:
(1)	Heavy equipment. – Earthmoving or construction equipment that meets any of the following requirements:
a.	It is a self‑propelled vehicle that is not designed to be driven on a highway.
b.	It is industrial lift equipment, industrial material handling equipment, industrial electrical generation equipment, or a similar piece of industrial equipment.
c.	It is an attachment or an accessory for a vehicle or a piece of equipment described in this subdivision.
(2)	Short‑term lease or rental. – Defined in G.S. 105‑187.1.
(b)	A city may, by resolution impose a tax at the rate of sixty‑five hundredths percent (0.65%) on the gross receipts from the short‑term lease or rental of heavy equipment by a person whose principal business is the short‑term lease or rental of heavy equipment at retail. The heavy equipment subject to this tax is exempt from property tax under G.S. 105‑275, and this tax provides an alternative to a property tax on the equipment.
(c)	Administration. – Except as provided in this section, a city that imposes a tax under this section must administer the tax in the same manner as a tax imposed under G.S. 105‑164.4(a)(2). The gross receipts from the short‑term lease or rental of heavy equipment are subject to a tax under this section if the place of business from which the heavy equipment is leased or rented is located in the city. The penalties and collection remedies that apply to the payment of sales and use taxes under Article 5 of Chapter 105 of the General Statutes apply to this tax. The city finance officer has the same authority as the Secretary of Revenue in imposing these penalties and remedies. 
(d)	Payment. – A person whose principal business is the short‑term lease or rental of heavy equipment is required to remit a tax imposed by this section to the city finance officer. The tax is payable quarterly and is due by the last day of the month following the end of the quarter. The tax is intended to be added to the amount charged for the short‑term lease or rental of heavy equipment and paid to the heavy equipment business by the person to whom the heavy equipment is leased or rented.
(e)	Effective Date. – A tax imposed under this section becomes effective on the date set in the resolution imposing the tax. The date must be the first day of a calendar quarter and may not be sooner than the first day of the calendar quarter that begins at least two months after the date the resolution is adopted.
(f)	Repeal. – A city may, by resolution, repeal a tax imposed under this section. The repeal is effective on the date set in the resolution. The date must be the first day of a calendar quarter and may not be sooner than the first day of the calendar quarter that begins at least two months after the date the resolution is adopted."
SECTION 4.  G.S. 105‑259(b)(5) reads as rewritten:
"§ 105‑259.  Secrecy required of officials; penalty for violation.
(b)	Disclosure Prohibited. – An officer, an employee, or an agent of the State who has access to tax information in the course of service to or employment by the State may not disclose the information to any other person unless the disclosure is made for one of the following purposes:
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(5)	To furnish to the chair of a board of county commissioners or the tax collector of a county information on the county sales and use tax."
SECTION 5.  Section 1 of this act is effective for taxes imposed for taxable years beginning on or after July 1, 2009. The remainder of this act is effective when it becomes law. A tax imposed under G.S. 153A‑156.1 or G.S. 160A‑215.2, as enacted by this act, may not become effective before January 1, 2009.