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House | June 28, 2016 | Chamber | House Finance

Full MP3 Audio File

Spread all over the state thank you. >> Representative Carney >> For a motion >> You are recognized for a motion. >> I move that we give senate bill 791 a favorable unfavorable, this is a PCS. No. >> No this is->> Just the committee substitute? >> Yeah. >> A favorable to Senate Bill 7.91. >> You've heard the motion. [UNKNOWN] the discussion. All those in favor [INAUDIBLE] saying aye. >> Those opposed [INAUDIBLE]. The motion carries. Thank you Senator. >> I believe the honorable David Lewis is gonna handle this Bill. Bill, so you may wanna put that in his- >> We'll take care of that. >> You'll take care. >> Yes sir, thank you. >> Thank you. >> Next up we have, [INAUDIBLE] are you ready? >> House bill 948 authorize [INAUDIBLE] studies, [INAUDIBLE] Jordan makes motion of the bill before us. >> Do you recognize sir? [BLANK_AUDIO] Thank you Mr chairman this is a from the joint administrative procedure oversight committee. the bill does three things it basically allows us to continue studying the occupational licensing boards that we have been doing during the interim Says that we can study whether the burden of proof should be placed with an agency with certain contested cases and report any findings and section three the board of pharmacy asks for some more flexibility in the criminal reports that they get for their applicants. The change would simply allow them to allow the Were forced to come from any number of sources besides DPS and the applicants pay or all those in any case. >> Mr. Chairman. >> Yes sir. >> Move >> [CROSSTALK] >> You've heard the motion is there any other discussion? Seeing none, all those in favor signify/g by saying aye. >> Aye. >> Those opposed [INAUDIBLE] The motion carries. >> Thank you Representative Jordan next up we have the PCS for senate bill 803, chairman Browly makes the motion for the bill to be before us. >> Mr. chairman this is primarily a technical correction. Bill I would ask staff to go through it. >. recognizing staff. Yes it's Greg Kroneny with the pleasant analysis division. On section one is in part one, is income tax changes. The first one is deleting this in the stake hammers commission that no longer exist. So that's. Just a technical correction. The next item 1.2 that is we decoupled in the RC update bill from the federal treatment of qualified resident forgiveness of qualified personal residence indentiness but we did not intend. To change the underline law on how a tax pair is treated if they are insolent. So this is a clarifying change that just says, that the decoupling of qualified residence doesn't what the underline law would have been which is North Carolina always coupled with the federal treatment of forgives of dept if the tax pair. Tax bare is insolvent. Part two is sales tax changes and so 2.1 just as the word also to try to clarify that we were not changing anything addition of that phrase and the tax exception. 2.2 Is literally fixing a typo. 2.3 2.4 when we added some provisions to tax facilitators such as like ticket master. We forgot to update some of the tax administration statutes. For the fact that facilitators could be tax collectors, and so this is just making. Changes to those statutes so it doesn't impose or expand a tax. It's just fixing where we have already imposed a tax to administrative statutes related to that tax. 2.5 >> Mr chairman would this be the appropriate time to ask a question about. >> Representative Luebke you're recognize here question. >> Thank you [INAUDIBLE] can you give us an example of what exactly this does and specific examples give us products where, the exception is there, and where we are clearing up it's not. >> Okay, so you're on- >> I'm on two. >> 2.1. >> Oh, I'm sorry, I was on 2.3 and 2.4. >> Okay, 2.3, 2.4. They're not about an exemption. So, these are saying if you. Is it 2.3?-

>> I think actually I was asking about 2.5. >> Okay, 2.5. So this is fully prepared food. So what this is, if a college student buys a prepaid meal plan, we charge tax on the meal plan. And so what we didnt do, was anything about the sales of the packaging that goes long when they go to cash in their meal plan, and they get a hamburger and the hamburger has a wrapper on it. We didn't except that wrapper from sales tax. So the department of revenue brought that issue up and said we need to have this clear that once you pay tax on your meal plan, and you're entitled to the food you're not subject to the sales tax on the food packaging. So if you bought hamburger it will be the wrapper. if you got a drink it would be the cup and the straw. And so this is a tax exemption for the packaging necessary to deliver the food that you bought under your prepaid meal plan. >> To follow up briefly. >> Follow up. >> It doesn't sound like we are talking about a lot of revenue here its more that we are clarifying for vendors what they have to pay sales tax on and what they don't is would that be an accurate summary? >> Yes. >> The purpose of this bill was to not change any taxes, and so general assembly did not intend once the tax has been paid on the meal plan purchase the intent of the general assembly by then was that, that was supposed to be the taxable transaction. And so anything that happened after that point for the delivery of food, which would be the packaging and actual giving the food to the student. That was supposed to all be [INAUDIBLE] within the tax was paid on the meal plan. Thank you very much. >> All right well I'll keep going to 2.6. This is to keep us in conformity with streamlined sales in the use tax agreement. North Carolina is part of this multi-state group that has this streamlined sales and use tax agreement, and the way that we had our default rules in there for the effective dates of sales tax changes to the combined general rate didn't comply. This doesn't make any difference right now because there aren't any sales and use tax rate changes, but theoretically some day in the future if there ever were then the streamlined agreement has rules about how much time we have to give people for them to become aware of the changes. So this puts North Carolina in conformity with those requirements, but it doesn't have any impact until there is a sales tax change. That's a sales tax rate change combines in a rate. 2.7 Again that's just a typo that's corrected in Across reference that get's reference to part three. This is a local government changes. If what this was is it allows a county and a municipality within that county to exchange confidential tax information, when they tax the same tax pair. And so their has been some problem Where counties, or cities or vise versa might be aware of something that the other tax administrator would like to know about somebody within their jurisdiction. And this just allows, it's still confidential tax information, but at least it can be exchanged between the cities within the county. Part four is. Changes systematic. Mr. Chairman. >>Yes >> Can I ask a question what one he just won over the 3.1A representative bishop you are recognized for a question. Dint we just pass that in another measure I remember and I wonder if we are changing that ways that make it go both ways or it call it we just did it. The gentleman was correct that was a local bill and this a state wide bill because several other counties came forward with idea well that's great for Charlotte and Mecklenburg but we need it to. So this is simply taking language that was in the local bill and making it apply state wide. >> Thank you. Part four this is for none participating manufactures. The attorney general's asked for technical correction because currently our bonding requirements were set based on the sales volume of a none participative manufacture at anytime inn North Carolina. Well the cigarette sales volumes. decline this means his manufactures are paying bonds based on their highest ever sales in North Carolina and what this provision does is it change it from highest ever to a three year look back so that it would be you sales volume, higher sales volume in the last three years, which was thought to be a more realistic picture. Of what your sales volume would be and future years. Moving to part five of these is the UI tax changes.

This is unemployment tax, what this does is that it doesn't change any, all it does is that it changes the day of the calculation of the employers tax rate for the next year. So current law and North Carolina is August 1st, we calculate what your tax rates would be for the current year 2017. The problem with that is that tax payers' businesses pay their taxes quarterly and the tax payments in the second quarter, which ended in June would be due in July. But it turns out that some of these payments are processed by August 1st and so businesses actually could have mailed the check on the last day of June and it not be in the system by August 1st and then their tax rates are calculated on August 1st and so they don't get the benefit of the fact that they actually pay that tax on those second quarter wages. And so this changes the calculation of tax from August 1st to September 1st forever. So that for this year and all future years we're going to compute your upcoming years tax rates on September 1st and the theory being that way all of your second quarter tax payments will be reflected into your account. The next part is part six that is why this thing is a PCS part six is new and so what part six does is it says that for passive fiber optic networks you do not have to have a low voltage building product and so it adds a sentence to the subsection on building permits and says that you do not have to have one for this low voltage fiber optic cables or no voltage fiber optic cables. And then the last part which is no part seven is the effective gate. >> [INAUDIBLE] any questions for staff? Seeing none we have a motion Chairman Blowley. >> Mr chairman I move a favorable report to the house committee substitute to senate bill 803 unfavorable to the Vote the original bill. >> In for the motion. >> Representative Stam. >> In support of the motion this shows reduction of 200 million for the unemployment insurance pack, and I just like to state as I told many people the fees that are faxes in their taxes that are piece. This is not a tax it's a premium. Insurance policy and should be thought of like that. And not a text. >> Any other comments, seeing none all those in favor of the motion say a proper said Aye. >> Aye >> Those oppose like same. Me and the chair the motion passes the motion does pass. Per the agenda we have moved that bill to a possible 12 o'clock meeting, the sponsors of the bill have found a technical issue that they're trying to get corrected before we pick that up. until then we stand adjourned until 12 o'clock.