A BILL TO BE ENTITLED
AN ACT to limit the privilege taxes imposed on information technology and services companies.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 105‑187.50 reads as rewritten:
"§ 105‑187.50.  Definitions.
The definitions in G.S. 105‑164.3 apply in this Article. In addition, the following definitions apply in this Article:
(1)	Information technology and services. – Defined in G.S. 105‑129.81.
(2)	NAICS. – Defined in G.S. 105‑129.2."
SECTION 2.  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:
…
(3)	An information technology and services company that performs research and development 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 3.  Section 2 of this act becomes effective July 1, 2007.  The remainder of this act is effective when it becomes law.