A BILL TO BE ENTITLED
AN ACT to allow a sales and use tax exemption for LOCAL SCHOOL ADMINISTRATIVE UNITS and to reenact the sales and use tax refund for local school administrative units, so as to optimize school construction funding.
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:
…
(58)	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 local school administrative unit for its own use and in accordance with G.S. 105‑164.29B.
b.	The items are purchased pursuant to a valid purchase order issued by the local school administrative unit that contains the exemption number of the local school administrative unit 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 local school administrative unit.
c.	For all purchases other than by a purchase order issued by the local school administrative unit, the local school administrative unit must provide to or have on file with the retailer the local school administrative unit'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:
"§ 105‑164.29B.  Local school administrative unit exemption process.
(a)	Application. – To be eligible for the exemption provided in G.S. 105‑164.13(58), a local school administrative unit 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 local school administrative unit, and contain any information required by the Secretary. The Secretary must assign a sales tax exemption number to a local school administrative unit that submits a proper application.
(b)	Liability. – A local school administrative unit 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)(2b) and (2c) are reenacted.
SECTION 4.  G.S. 105‑164.44H is repealed.
SECTION 5.  Section 7.51(c) of S.L. 2005‑276, as amended by Section 7 of S.L. 2005‑345 and by Section 7.20(b) of S.L. 2006‑66, reads as rewritten:
"SECTION 7.51.(c)  This section becomes effective July 1, 2005, and applies to sales made on or after that date."
SECTION 6.  G.S. 105‑467(b) reads as rewritten:
"(b)	Exemptions and Refunds. – The State exemptions and exclusions contained in G.S. 105‑164.13, the State sales and use tax holiday contained in G.S. 105‑164.13C, and the State refund provisions contained in G.S. 105‑164.14 apply to the local sales and use tax authorized to be levied and imposed under this Article. A taxing county may not allow an exemption, exclusion, or refund that is not allowed under the State sales and use tax."
SECTION 7.  Sections 1, 3, 4, and 6 of this act become effective January 1, 2009, and apply to purchases made on or after that date. The remainder of this act is effective when it becomes law.