A BILL TO BE ENTITLED
AN ACT to allow a sales and use tax exemption for community colleges and to create a sales and use tax refund for community colleges.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 105‑164.13 is amended by adding a new subdivision to read:
"§ 105‑164.13.  Retail sales and use tax.
The sale at retail and the use, storage, or consumption in this State of the following tangible personal property and services are specifically exempted from the tax imposed by this Article:
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(59)	Items subject to sales and use tax under G.S. 105‑164.4, other than electricity, telecommunications service, and ancillary service, if all of the following conditions are met:
a.	The items are purchased by a community college for its own use and in accordance with G.S. 105‑164.29C.
b.	The items are purchased pursuant to a valid purchase order issued by the community college that contains the exemption number of the community college and a description of the property purchased; or the items purchased are paid for with a check, electronic deposit, credit card, procurement card, or credit account of the community college.
c.	For all purchases other than by a purchase order issued by the community college, the community college must provide to or have on file with the retailer the community college's exemption number."
SECTION 2.  Part 5 of Article 5 of Chapter 105 of the General Statutes is amended by adding a new section to read:
"§ 105‑164.29C.  Community college exemption process.
(a)	Application. – To be eligible for the exemption provided in G.S. 105‑164.13(59), a community college must obtain from the Department a sales tax exemption number. The application for exemption must be in the form required by the Secretary, be signed by the finance officer of the community college, and contain any information required by the Secretary. The Secretary must assign a sales tax exemption number to a community college that submits a proper application.
(b)	Liability. – A community college that does not use the items purchased with its exemption number must pay the tax that should have been paid on the items purchased, plus interest calculated from the date the tax would otherwise have been paid."
SECTION 3.  G.S. 105‑164.14(c) is amended by adding a new subdivision to read:
"(c)	Certain Governmental Entities. – A governmental entity listed in this subsection is allowed an annual refund of sales and use taxes paid by it under this Article on direct purchases of tangible personal property and services, other than electricity, telecommunications service, and ancillary service. Sales and use tax liability indirectly incurred by a governmental entity on building materials, supplies, fixtures, and equipment that become a part of or annexed to any building or structure that is owned or leased by the governmental entity and is being erected, altered, or repaired for use by the governmental entity is considered a sales or use tax liability incurred on direct purchases by the governmental entity for the purpose of this subsection. A request for a refund must be in writing and must include any information and documentation required by the Secretary. A request for a refund is due within six months after the end of the governmental entity's fiscal year.
This subsection applies only to the following governmental entities:
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(20)	A constituent institution of The University of North Carolina, but only with respect to sales and use tax paid by it for tangible personal property or services that are eligible for refund under this subsection acquired by it through the expenditure of contract and grant funds.
(20a)	An institution of the Community College System established in Chapter 115D of the General Statutes.
(21)	The University of North Carolina Health Care System.
…."
SECTION 8.  This act becomes effective July 1, 2008, and applies to purchases made on or after that date.