A BILL TO BE ENTITLED
AN ACT to simplify the reporting and remittance requirements for sales tax and occupancy tax on accommodations rented through intermediaries.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 105‑164.4F reads as rewritten:
"§ 105‑164.4F.  Accommodation charges.
(a)	Definitions. – The following definitions apply in this section:
(1)	Accommodation. – A hotel room, a motel room, a residence or a cottage, or any part thereof, or a similar lodging facility for occupancy by an individual.
(2)	Accommodation charge. – The sales price of or gross receipts derived from an accommodation, including any accommodation intermediary fee, excluding sales and use tax and local occupancy tax.
(3)	Accommodation intermediary. – A person, other than an accommodation provider, that charges or facilitates an accommodation charge. An accommodation intermediary includes a rental agent, an online travel company, or a short‑term rental listing service as defined in G.S. 66‑450. An accommodation intermediary does not include a third party or affiliate that collects or processes, on behalf of an accommodation intermediary, a payment for an accommodation charge.
(4)	Accommodation intermediary fee. – A fee, by whatever name called, for an accommodation that is in excess of the discount accommodation charge. It does not include any commission paid by an accommodation provider to an accommodation intermediary that is not included in the accommodation charge.
(5)	Accommodation provider. – A person that furnishes an accommodation for compensation. The term "furnishes" includes the sale, use, or  possession or the right to use or possess.
(6)	Discount accommodation charge. – The amount charged by an accommodation provider to an accommodation intermediary, excluding sales and use tax or local occupancy tax.
(7)	Local occupancy tax. – A tax imposed on an accommodation charge by the governing board of a taxing district pursuant to a local act.
(8)	Net proceeds. – As defined in G.S. 105‑472(a), except that when the term is used in reference to local occupancy tax, the term "county" is substituted with the term "taxing district."
(9)	Taxing district. – A county, city, or other taxing district authorized to levy a local occupancy tax pursuant to a local act.
(b)	Sales Tax. – An accommodation charge is taxed at the general rate set in G.S. 105‑164.4. The tax is due and payable by the retailer in accordance with G.S. 105‑164.16. For purposes of the tax imposed by this section, the retailer is the applicable person listed below:
(1)	The accommodation provider, if the accommodation provider charges the accommodation charge.
(2)	The accommodation intermediary, if an accommodation intermediary charges the accommodation charge.
(c)	Local Occupancy Tax. – The sales price of or the gross receipts derived from an accommodation charge are subject to local occupancy tax if the taxing district in which the accommodation is located levies a local occupancy tax. The taxes are due and payable by the retailer as follows:
(1)	If the retailer is an accommodation provider, the local occupancy tax must be remitted to the taxing district in accordance with G.S. 160A‑215 or G.S. 153A‑155, as applicable.
(2)	If the retailer is an accommodation intermediary, the local occupancy tax must be remitted to the Secretary in accordance with G.S. 105‑164.16, except that references to "sales and use tax" or "sales tax" are substituted with the term "local occupancy tax."
(d)	
	Exemptions. – The tax imposed by this section does not apply to the following:
(1)	Accommodation charges for an accommodation for fewer than 15 days in a calendar year other than an accommodation listed with an accommodation intermediary.
(2)	An accommodation charge to the same person for a period of 90 or more continuous days.
(3)	An accommodation furnished to a person by a school, camp, or similar entity where a tuition or fee is charged to the person for enrollment in the school, camp, or similar entity.
(e)	Liability. – The liability of an accommodation intermediary for the taxes imposed or administered by this section relieves the accommodation provider from liability for those taxes. However, nothing in this section relieves the accommodation provider from liability for tax due on any charges made by the accommodation provider that are in addition to the accommodation charge.
(f)	Distribution. – The Secretary must distribute the net proceeds of the taxes imposed or administered by this section as provided in this subsection. The General Assembly finds that the revenue distributed under this section is local revenue, not a State expenditure, for the purpose of Section 5(3) of Article III of the North Carolina Constitution. Therefore, the Governor may not reduce or withhold the distribution. The net proceeds shall be distributed as follows:
(1)	The local sales and use tax must be distributed to the counties and cities in accordance with Subchapter VIII of this Chapter.
(2)	The local occupancy tax must be distributed, on a quarterly basis, to the taxing districts. The governing board of a taxing district must distribute and use the net proceeds of the local occupancy tax in accordance with the local act authorizing the distribution and use of the local occupancy tax. To the extent this subdivision conflicts with any provision of a local act, this subdivision supersedes that provision.
(g)	Publication of Local Occupancy Tax Rates. – A taxing district must provide to the Secretary, by October 1 of each year, the local occupancy rate in that district beginning on the following January 1. The Secretary must publish on its Web site a list of local occupancy tax rates for each taxing district that reflects the local occupancy tax rate applicable to an accommodation charge in each taxing district by December 1. A person who relies on the information provided is not liable for underpayments of tax attributable to erroneous information provided by the Secretary."
SECTION 2.  G.S. 105‑164.3(36) reads as rewritten:
"(36)	Sale or selling. – The transfer for consideration of title, license to use or consume, or possession of tangible personal property or digital property, the performance for consideration of a service, or the furnishing of an accommodation. The transfer or performance may be conditional or in any manner or by any means. The term includes the following:
a.	Fabrication of tangible personal property for consumers by persons engaged in business who furnish either directly or indirectly the materials used in the fabrication work.
b.	Furnishing or preparing tangible personal property consumed on the premises of the person furnishing or preparing the property or consumed at the place at which the property is furnished or prepared.
c.	A transaction in which the possession of the property is transferred but the seller retains title or security for the payment of the consideration.
d.	A lease or rental.
e.	Transfer of a digital code."
SECTION 3.  G.S. 105‑228.90(b)(7) reads as rewritten:
"(7)	Tax. – A tax levied or administered under Subchapter I, V, or VIII of this Chapter, the primary forest product assessment levied under Article 12 of Chapter 113A of the General Statutes, or an inspection tax levied under Article 3 of Chapter 119 of the General Statutes. Unless the context clearly requires otherwise, the term "tax" includes penalties and interest as well as the principal amount."
SECTION 4.  G.S. 160A‑215 reads as rewritten:
"§ 160A‑215.  Uniform provisions for local occupancy taxes.
(a)	Authorization. – The General Assembly may authorize a city to levy a local occupancy tax. For the purpose of this section, the term "city" means a municipality.
(b)	Levy. – A local occupancy tax may be levied only by resolution, after not less than 10 days' public notice and after a public hearing held pursuant thereto. A local occupancy tax becomes effective on January 1 and the date may not be earlier than 90 days after the date the resolution is adopted. Upon adoption of a resolution levying a local occupancy tax, the governing board of the city must deliver a certified copy of the resolution to the Secretary of Revenue within 10 days of the adoption of the resolution. As used in this section, the term "levy" refers to the initial levy of a local occupancy tax or the increase of an existing local occupancy tax.
(b1)	Rate Change. – A city may only change the local occupancy tax rate, whether by levy under subsection (b) of this section or by repeal or reduction under subsection (f) of this section, once every two years.
(b2)	Scope. – The local occupancy tax applies to the same sales price of or gross receipts derived from an accommodation charge on which the State sales tax is imposed under Article 5 of Chapter 105 of the General Statutes.
If a taxable accommodation is furnished as part of a package, the bundled transaction provisions in G.S. 105‑164.4D apply in determining the sales price of the taxable accommodation. If those provisions do not address the type of package offered, the person offering the package may determine an allocated price for each item in the package based on a reasonable allocation of revenue that is supported by the person's business records kept in the ordinary course of business and calculate tax on the allocated price of the taxable accommodation.
(c)	Collection and Remittance. – A collector of local occupancy tax is an accommodation provider or an accommodation intermediary, as defined in G.S. 105‑164.4F. A collector of local occupancy tax has the same responsibility and liability for the local occupancy tax as the collector has under the State sales tax on accommodation charges. The local occupancy tax must be separately stated on the invoice or other documentation given to the purchaser and is held in trust for and on account of the taxing city.
A collector of local occupancy tax is required to remit the tax on and after the effective date of the levy of the tax as provided in this subsection. A return must be filed with the appropriate entity on a form and in the manner prescribed by the entity. The entity to which the local occupancy tax is remitted is as follows:
(1)	If the collector of local occupancy tax is an accommodation provider, the local occupancy tax must be remitted to the taxing city.
(2)	If the collector of local occupancy tax is an accommodation intermediary, the local occupancy tax must be remitted to the Department of Revenue.

(d)	Administration. – Local occupancy tax is administered by the entity to which the tax is required to be remitted under this section as follows:
(1)	Taxing city. – If a local occupancy tax is required to be remitted to the taxing city, the tax is due and payable to the city finance officer in monthly installments on or before the 20th day of the month following the month in which the tax accrues. A return must be filed with the taxing city on or before the 20th day of each month on a form prescribed by the taxing city. The return shall state the total gross receipts derived in the preceding month from charges upon which the tax is levied. A local occupancy tax return filed with the city finance officer is not a public record and may not be disclosed except in accordance with G.S. 153A‑148.1 or G.S. 160A‑208.1.
(2)	Department of Revenue. – If a local occupancy tax is required to be remitted to the Department of Revenue, the Department must administer the tax in accordance with G.S. 105‑164.4F.
(e)	Penalties. – A person, firm, corporation, or association who fails or refuses to file a local occupancy tax return or pay a local occupancy tax as required by law is subject to the civil and criminal penalties set by G.S. 105‑236 for failure to pay or file a return for State sales and use taxes. The governing board of the taxing city has the same authority to waive the penalties for a local occupancy tax that the Secretary of Revenue has to waive the penalties for State sales and use taxes.
(f)	Repeal or Reduction. – A local occupancy tax levied by a city may be repealed or reduced by a resolution adopted by the governing body of the city in accordance with the conditions listed in this subsection. Repeal or reduction of a local occupancy tax does not affect a liability for a tax that was attached before the effective date of the repeal or reduction, nor does it affect a right to a refund of a tax that accrued before the effective date of the repeal or reduction. Upon adoption of a resolution repealing or reducing the tax, the governing board of the city must deliver a certified copy of the resolution to the Secretary of Revenue within 10 days of the adoption of the resolution. The conditions are:
(1)	It must become effective on January 1.
(2)	The resolution must be adopted at least 90 days prior to the effective date of the repeal.
(3)	It is subject to the limitation in subsection (b1) of this section.
(f1)	Use. – The proceeds of a local occupancy tax shall not be used for development or construction of a hotel or another transient lodging facility.
(g)	Applicability. – Subsections (b1), (b2), (c), and (f1) of this section apply to all cities that levy a local occupancy tax. Any provision of a local act that conflicts with subsection (b1), (b2), (c), or (f1) of this section is superseded by this section. The remainder of this section applies only to Beech Mountain District W, to the Cities of Belmont, Conover, Eden, Elizabeth City, Gastonia, Goldsboro, Greensboro, Hickory, High Point, Jacksonville, Kings Mountain, Lenoir, Lexington, Lincolnton, Lowell, Lumberton, Monroe, Mount Airy, Mount Holly, Reidsville, Roanoke Rapids, Salisbury, Shelby, Statesville, Washington, and Wilmington, to the Towns of Ahoskie, Beech Mountain, Benson, Bermuda Run, Blowing Rock, Boiling Springs, Boone, Burgaw, Carolina Beach, Carrboro, Cooleemee, Cramerton, Dallas, Dobson, Elkin, Fontana Dam, Franklin, Grover, Hillsborough, Jonesville, Kenly, Kure Beach, Leland, McAdenville, Mocksville, Mooresville, Murfreesboro, North Topsail Beach, Pembroke, Pilot Mountain, Ranlo, Robbinsville, Selma, Smithfield, St. Pauls, Swansboro, Troutman, Tryon, West Jefferson, Wilkesboro, Wrightsville Beach, Yadkinville, and Yanceyville, and to the municipalities in Avery and Brunswick Counties."
SECTION 5.  G.S. 153A‑155 reads as rewritten:
§ 153A‑155.  Uniform provisions for local occupancy taxes.
(a)	Authorization. – The General Assembly may authorize a county to levy a local occupancy tax.
(b)	Levy. – A local occupancy tax may be levied only by resolution, after not less than 10 days' public notice and after a public hearing held pursuant thereto. A local occupancy tax becomes effective on January 1 and the date may not be earlier than 90 days after the date the resolution is adopted. Upon adoption of a resolution levying the tax, the governing board of the county must deliver a certified copy of the resolution to the Secretary of Revenue within 10 days of the adoption of the resolution. As used in this section, the term "levy" refers to the initial levy of a local occupancy tax or the increase of an existing local occupancy tax.
(b1)	Rate Change. – A county may only change the local occupancy tax rate, whether by levy under subsection (b) of this section or by repeal or reduction under subsection (f) of this section, once every two years.
(b2)	Scope. – The local occupancy tax applies to the same sales price of or gross receipts derived from an accommodation charge on which the State sales tax is imposed under Article 5 of Chapter 105 of the General Statutes.
If a taxable accommodation is furnished as part of a package, the bundled transaction provisions in G.S. 105‑164.4D apply in determining the sales price of the taxable accommodation. If those provisions do not address the type of package offered, the person offering the package may determine an allocated price for each item in the package based on a reasonable allocation of revenue that is supported by the person's business records kept in the ordinary course of business and calculate tax on the allocated price of the taxable accommodation.
(c)	Collection and Remittance. – A collector of local occupancy tax is an accommodation provider or an accommodation intermediary, as defined in G.S. 105‑164.4F. A collector of local occupancy tax has the same responsibility and liability for the local occupancy tax as the collector has under the State sales tax on accommodation charges. The local occupancy tax must be separately stated on the invoice or other documentation given to the purchaser and is held in trust for and on account of the taxing county.
A collector of local occupancy tax is required to remit the tax on and after the effective date of the levy of the tax as provided in this subsection. A return must be filed with the appropriate entity on a form prescribed by the entity and in the manner prescribed by the entity. The entity to which the local occupancy tax is remitted is as follows:
(1)	If the collector of local occupancy tax is an accommodation provider, the local occupancy tax must be remitted to the taxing county.
(2)	If the collector of local occupancy tax is an accommodation intermediary, the local occupancy tax must be remitted to the Department of Revenue.

(d)	Administration. – Local occupancy tax is administered by the entity to which the tax is required to be remitted under this section as follows:
(1)	Taxing county. – If a local occupancy tax is required to be remitted to the taxing county, the tax is due and payable to the county finance officer in monthly installments on or before the 20th day of the month following the month in which the tax accrues. A return must be filed with the taxing county on or before the 20th day of each month on a form prescribed by the taxing county. The return shall state the total gross receipts derived in the preceding month from charges upon which the tax is levied. A local occupancy tax return filed with the county finance officer is not a public record and may not be disclosed except in accordance with G.S. 153A‑148.1 or G.S. 160A‑208.1.
(2)	Department of Revenue. – If a local occupancy tax is required to be remitted to the Department of Revenue, the Department must administer the tax in accordance with G.S. 105‑164.4F.
(e)	Penalties. – A person, firm, corporation, or association who fails or refuses to file a local occupancy tax return or pay a local occupancy tax as required by law is subject to the civil and criminal penalties set by G.S. 105‑236 for failure to pay or file a return for State sales and use taxes. The governing board of the taxing county has the same authority to waive the penalties for a local occupancy tax that the Secretary of Revenue has to waive the penalties for State sales and use taxes.
(f)	Repeal or Reduction. – A local occupancy tax levied by a county may be repealed or reduced by a resolution adopted by the governing body of the county in accordance with the conditions listed in this subsection. Repeal or reduction of a local occupancy tax does not affect a liability for a tax that was attached before the effective date of the repeal or reduction, nor does it affect a right to a refund of a tax that accrued before the effective date of the repeal or reduction. Upon adoption of a resolution repealing or reducing the tax, the governing board of the county must deliver a certified copy of the resolution to the Secretary of Revenue within 10 days of the adoption of the resolution. The conditions are:
(1)	It must become effective on January 1.
(2)	The resolution must be adopted at least 90 days prior to the effective date of the repeal.
(3)	It is subject to the limitation in subsection (b1) of this section.
(f1)	Use. – The proceeds of a local occupancy tax shall not be used for development or construction of a hotel or another transient lodging facility.
(g)	Applicability. – Subsections (b1), (b2), (c), and (f1) of this section apply to all counties and county districts that levy a local occupancy tax. Any provision of a local act that conflicts with subsection (b1), (b2), (c), or (f1) of this section is superseded by this section. The remainder of this section applies only to Alleghany, Anson, Brunswick, Buncombe, Burke, Cabarrus, Camden, Carteret, Caswell, Chatham, Cherokee, Chowan, Clay, Craven, Cumberland, Currituck, Dare, Davie, Duplin, Durham, Edgecombe, Forsyth, Franklin, Granville, Halifax, Haywood, Henderson, Jackson, Madison, Martin, McDowell, Montgomery, Moore, Nash, New Hanover, Northampton, Pasquotank, Pender, Perquimans, Person, Randolph, Richmond, Rockingham, Rowan, Rutherford, Sampson, Scotland, Stanly, Swain, Transylvania, Tyrrell, Vance, Washington, and Wilson Counties, to New Hanover County District U, to Surry County District S, to Watauga County District U, to Wilkes County District K, to Yadkin County District Y, and to the Township of Averasboro in Harnett County and the Ocracoke Township Taxing District."
SECTION 6.  Chapter 66 of the General Statutes is amended by adding a new Article to read:
"Article 47.
"Short‑Term Rental Listing Services.
"§ 66‑450.  Listing services to require sales tax registration number.
(a)	Definitions. – The following definitions apply in this Article:
(1)	Short‑term rental. – A residential dwelling unit offered for transient use by the owner of the residential dwelling unit without the use of a licensed real estate broker and that is subject to the sales tax on accommodation charges under G.S. 105‑164.4F.
(2)	Short‑term rental listing service. – A business that maintains an Internet Web site or mobile application that lists and facilitates short‑term rentals.
(b)	Registration Number. – Before listing a short‑term rental unit on its Internet Web site or mobile application, a short‑term rental listing service shall require the owner or operator of the short‑term rental unit to provide a valid registration number issued by the North Carolina Department of Revenue pursuant to G.S. 105‑164.29."
SECTION 7.  Within 90 days of the effective date of this act, each taxing district, as defined in G.S. 105‑164.4F and enacted by Section 1 of this act, that levies a local occupancy tax on the effective date of this act must send to the Secretary of Revenue a certified copy of the resolution authorizing the levy of the local occupancy tax.
SECTION 8.  This act becomes effective January 1, 2016, and applies to sales and use tax and local occupancy tax remitted on or after that date. The requirement under G.S. 105‑164.4F(g), as enacted by Section 1 of this act, that the Secretary of Revenue publish local occupancy tax rates on its Web site, must be met within six months after the effective date of this act.