§ 105-164.40 — Jeopardy assessment

North Carolina § 105-164.40

• Jurisdiction: North Carolina
• Ch. 105: Taxation
• Art. 5: Sales and Use Tax
• Subch. I: LEVY OF TAXES

Text

If the Secretary is of the opinion that the collection of any tax or any amount of tax required to be collected and paid to the State under this Article will be jeopardized by delay, he shall make an assessment of the tax or amount of tax required to be collected and shall mail or issue a notice of such assessment to the taxpayer together with a demand for immediate payment of the tax or of the deficiency in tax declared to be in jeopardy including interest and penalties. In the case of a tax for a current period, the Secretary may declare the taxable period of the taxpayer immediately terminated and shall cause notice of such finding and declaration to be mailed or issued to the taxpayer together with a demand for immediate payment of the tax based on the period declared terminated and such tax shall be immediately due and payable, whether or not the time otherwise allowed by law for filing a return and paying the tax has expired. Assessments provided for in this section shall be immediately due and payable and proceedings for the collection shall commence at once and if any such tax, penalty or interest is not paid upon demand of the Secretary, he shall forthwith cause a levy to be made on the property of the taxpayer or, in his discretion the Secretary may require the taxpayer to file such indemnity bond as in his judgment may be sufficient to protect the interest of the State. (1957, c. 1340, s. 5; 1973, c. 476, s. 193.)
§ 105-164.41: Repealed by Session Laws 2011-330, s. 38, effective June 27, 2011.
§ 105-164.42: Repealed by Session Laws 1959, c. 1259, s. 9.
Part 7A. Uniform Sales and Use Tax Administration Act.
§ 105-164.42A. Short title.
This Part is the "Uniform Sales and Use Tax Administration Act" and may be cited by that name. (2001-347, s. 1.3; 2005-276, s. 33.31.)
§ 105-164.42B. Definitions.
The following definitions apply in this Part:
(1) Agreement. - Streamlined Agreement, as defined in G.S. 105-164.3.
(2) Certified automated system. - Software certified jointly by the states that are signatories to the Agreement to calculate the tax imposed by each jurisdiction on a transaction, determine the amount of tax to remit to the appropriate state, and maintain a record of the transaction.
(3) Certified service provider. - An agent certified jointly by the states that are signatories to the Agreement to perform all of the seller's sales tax functions.
(4) Member state. - A state that has entered into the Agreement.
(5) Person. - Defined in G.S. 105-228.90.
(6) Sales tax. - The tax levied in G.S. 105-164.4.
(7) Seller. - A person making sales, leases, or rentals of personal property or services.
(8) State. - The term "this State" means the State of North Carolina. Otherwise, the term "state" means any state of the United States, the District of Columbia, and any territory of the United States including American Samoa, Guam, Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands.
(9) Use tax. - The tax levied in G.S. 105-164.6. (2001-347, s. 1.3; 2005-276, ss. 33.16, 33.31; 2022-13, s. 3.3.)
§ 105-164.42C. Authority to enter Agreement.
The Secretary is authorized to enter into the Agreement with one or more states to simplify and modernize sales and use tax administration in order to substantially reduce the burden of tax compliance for all sellers and for all types of commerce. The Secretary may act jointly with other member states to establish standards for certification of a certified service provider and a certified automated system and to establish performance standards for multistate sellers.
The Secretary is authorized to represent this State before the other member states. The Secretary may take any other actions reasonably required to implement this Part, including the joint procurement with other member states of goods and services in furtherance of the Agreement. (2001-347, s. 1.3; 2005-276, s. 33.31.)
§ 105-164.42D. Relationship to North Carolina law.
No provision of the Agreement authorized by this Part invalidates or amends any provision of the law of this State. Adoption of the Agreement by this State does not amend or modify any law of this State. Implementation of a condition of the Agreement in this State must be made pursuant to an act of the General Assembly. (2001-347, s. 1.3; 2005-276, s. 33.31.)
§ 105-164.42E. Agreement requirements.
The Secretary may not enter into the Agreement unless the Agreement requires each state to abide by the following requirements:
(1) Uniform state rate. - The Agreement must set restrictions to achieve more uniform state rates through the following:
a. Limiting the number of state rates.
b. Limiting maximums on the amount of state tax that is due on a transaction.
c. Limiting thresholds on the application of a state tax.
(2) Uniform standards. - The Agreement must establish uniform standards for all of the following:
a. The sourcing of transactions to taxing jurisdictions.
b. The administration of exempt sales.
c. The allowances a seller can take for bad debts.
d. Sales and use tax returns and remittances.
(3) Uniform definitions. - The Agreement must require states to develop and adopt uniform definitions of sales and use tax terms. The definitions must enable a state to preserve its ability to make policy choices not inconsistent with the uniform definitions.
(4) Central registration. - The Agreement must provide a central, electronic registration system that allows a seller to register to collect and remit sales and use taxes for all signatory states.
(5) No nexus attribution. - The Agreement must provide that registration with the central registration system and the collection of sales and use taxes in the signatory states will not be used as a factor in determining whether the seller has nexus with a state for any tax.
(6) Local sales and use taxes. - The Agreement must provide for reduction of the burdens of complying with local sales and use taxes through one or more of the following:
a. Restricting variances between the state and local tax bases.
b. Requiring states to administer any sales and use taxes levied by local jurisdictions within the state so that sellers collecting and remitting these taxes will not have to register or file returns with, remit funds to, or be subject to independent audits from local taxing jurisdictions.
c. Restricting the frequency of changes in the local sales and use tax rates and setting effective dates for the application of local jurisdictional boundary changes to local sales and use taxes.
d. Providing notice of changes in local sales and use tax rates and of changes in the boundaries of local taxing jurisdictions.
(7) Monetary allowances. - The Agreement must outline any monetary allowances that are to be provided by the states to sellers or certified service providers.
(8) State compliance. - The Agreement must require each state to certify compliance with the terms of the Agreement before becoming a member and to maintain compliance, under the laws of the member state, with all provisions of the Agreement while a member.
(9) Consumer privacy. - The Agreement must require each state to adopt a uniform policy for certified service providers that protects the privacy of consumers and maintains the confidentiality of tax information. (2001-347, s. 1.3; 2005-276, s. 33.31.)
§ 105-164.42F. Cooperating sovereigns.
The Agreement authorized by this Part is an accord among individual cooperating sovereigns in furtherance of their governmental functions. The Agreement provides a mechanism among the member states to establish and maintain a cooperative, simplified system for the application and administration of sales and use taxes under the laws of each member state. (2001-347, s. 1.3; 2005-276, s. 33.31.)
§ 105-164.42G. Effect of Agreement.
Entry of this State into the Agreement does not create a cause of action or a defense to an action. No person may challenge any action or inaction by a department, agency, or other instrumentality of this State, or a political subdivision of this State, on the ground that the action or inaction is inconsistent with the Agreement. No law of this State, or its application, may be declared invalid on the ground that the provision or application is inconsistent with the Agreement. (2001-347, s. 1.3; 2005-276, s. 33.31.)
§ 105-164.42H. Certification of certified automated system and effect of certification.
(a) Certification. - The Secretary may certify a software program as a certified automated system if the Secretary determines that the program correctly determines all of the following and that the software can generate reports and returns required by the Secretary:
(1) The applicable combined State and local sales and use tax rate for a sale, based on the sourcing principles in G.S. 105-164.4B.
(2) Whether or not an item is exempt from tax, based on a uniform product code or another method.
(3) Repealed by Session Laws 2006-33, s. 12, effective June 1, 2006.
(4) The amount of tax to be remitted for each taxpayer for a reporting period.
(5) Any other issue necessary for the application or calculation of sales and use tax due.
(b) Liability. - A seller may choose to use a certified automated system in performing its sales tax administration functions. A seller that uses a certified automated system is liable for sales and use taxes due on transactions it processes using the certified automated system except for underpayments of tax attributable to errors in the functioning of the system. A person that provides a certified automated system is responsible for the proper functioning of that system and is liable for underpayments of tax attributable to errors in the functioning of the system. (2000-120, s. 2; 2001-347, ss. 1.1, 1.3; 2005-276, s. 33.31; 2006-33, s. 12.)
§ 105-164.42I. Contract with certified service provider and effect of contract.
(a) Certification. - The Secretary may certify an entity as a certified service provider if the entity meets all of the following requirements:
(1) The entity uses a certified automated system.
(2) The entity has agreed to update its program upon notification by the Secretary.
(3) The entity integrates its certified automated system with the system of a seller for whom the entity collects tax so that the tax due on a sale is determined at the time of the sale.
(4) The entity remits the taxes it collects at the time and in the manner specified by the Secretary.
(5) The entity agrees to file sales and use tax returns on behalf of the sellers for whom it collects tax.
(6) The entity enters into a contract with the Secretary and agrees to comply with all the conditions of the contract.
(b) Contract. - The Secretary may contract or authorize in writing the Streamlined Sales Tax Governing Board to contract on behalf of the Secretary with a certified service provider for the collection and remittance of sales and use taxes. A certified service provider must file with the Secretary or the Streamlined Sales Tax Governing Board one of the following in the amount set by the Secretary: (i) a bond; (ii) an irrevocable letter of credit; or (iii) evidence of a certificate of deposit. A bond, irrevocable letter of credit, or certificate of deposit must be conditioned upon compliance with the contract, be payable to the State or the Streamlined Sales Tax Governing Board, and be in the form required by the Secretary or the Streamlined Sales Tax Governing Board. The amount a certified service provider charges under the contract is a cost of collecting the tax and is payable from the amount collected.
(c) Liability. - A seller may contract with a certified service provider to collect and remit sales and use taxes payable to the State on sales made by the seller. A certified service provider with whom a seller contracts is the agent of the seller. As the seller's agent, the certified service provider, rather than the seller, is liable for sales and use taxes due this State on all sales transactions the certified service provider processes for the seller unless the seller misrepresents the type of items it sells or commits fraud. A seller that misrepresents the type of items it sells or commits fraud is liable for taxes not collected as a result of the misrepresentation or fraud.
(d) Audit and Review. - In the absence of misrepresentation or fraud, a seller that contracts with a certified service provider is not subject to audit on the transactions processed by the certified service provider. A seller is subject to audit for transactions not processed by the certified service provider. The State may perform a system check of a seller and review a seller's procedures to determine if the certified service provider's system is functioning properly and the extent to which the seller's transactions are being processed by the certified service provider. A certified service provider is subject to audit. (2000-120, s. 2; 2001-347, ss. 1.1, 1.3; 2005-276, s. 33.31; 2013-414, s. 44; 2016-5, s. 3.18; 2019-169, s. 3.3(s).)
§ 105-164.42J. Performance standard for multistate seller.
The Secretary may establish a performance standard for a seller that is engaged in business in this State and at least 10 other states and has developed a proprietary system to determine the amount of sales and use taxes due on transactions. A seller that enters into an agreement with the Secretary that establishes a performance standard for that system is liable for the failure of the system to meet the performance standard. (2001-347, s. 1.3; 2005-276, s. 33.31.)
§ 105-164.42K. Registration and effect of registration.
Registration under the Agreement satisfies the registration requirements under this Article. A seller who registers under the Agreement within 12 months after the State becomes a member of the Agreement and who meets the following conditions is not subject to assessment for sales tax for any period before the effective date of the seller's registration:
(1) The seller was not registered with the State during the 12-month period before the effective date of this State's participation in the Agreement.
(2) When the seller registered, the seller had not received a letter from the Department notifying the seller of an audit.
(3) The seller continues to be registered under the Agreement and to remit tax to the State for at least 36 months. (2005-276, s. 33.17.)
§ 105-164.42L. Liability relief for erroneous information or insufficient notice by Department.
(a) Boundary and Rate Databases. - The Secretary may develop databases that provide information on the boundaries of taxing districts and the tax rates applicable to those taxing districts. The databases may assign the proper tax rate and taxing district to each taxing area within the State. If more than one tax rate applies within a specific taxing area, the Secretary shall assign the lowest combined tax rate imposed within the specific taxing area. If the Secretary cannot determine the appropriate tax rate for a street address, the Secretary shall assign the lowest combined tax rate imposed within the street address's nine-digit zip code. But, if the Secretary cannot determine the appropriate tax rate for a street address's nine-digit zip code, the Secretary shall assign the lowest combined tax rate imposed within the street address's five-digit zip code.
A person who relies on the information provided in these databases is not liable for underpayments of tax attributable to erroneous information provided by the Secretary in those databases until 10 business days after the date of notification by the Secretary.
(b) Taxability Matrix. - The Secretary may develop a taxability matrix that provides information on the taxability of certain items or certain tax administration practices. A person who relies on the information provided in the taxability matrix is not liable for underpayments of tax attributable to erroneous information provided by the Secretary in the taxability matrix until 10 business days after the date of notification by the Secretary.
(c) Rate Changes. - A retailer is not liable for an underpayment of tax attributable to a rate change when the State fails to provide for at least 30 days between the enactment of the rate change and the effective date of the rate change if the conditions of this subsection are satisfied. However, if the State establishes the retailer fraudulently failed to collect tax at the new rate or solicited customers based on the immediately preceding effective rate, this liability relief does not apply. Both of the following conditions must be satisfied for liability relief:
(1) The retailer collected tax at the immediately preceding rate.
(2) The retailer's failure to collect at the newly effective rate does not extend beyond 30 days after the date of enactment of the new rate or the effective date applicable under G.S. 105-164.15A. (2005-276, s. 33.18; 2007-244, s. 5; 2013-414, s. 15; 2016-5, s. 3.17(a); 2019-169, s. 3.5(b).)
Part 8. Administration and Enforcement.
§ 105-164.43: Repealed by Session Laws 2007-491, s. 2, effective January 1, 2008.
§ 105-164.43A. (Recodified effective August 8, 2001 - See note) Certification of tax collector software and tax collector.
(a) Recodified as § 105-164.42H(a) by Session Laws 2001-347, s. 1.1, effective August 8,2001. See note.
(b) Recodified as § 105-164.42I(a) by Session Laws 2001-347, s. 1.1, effective August 8, 2001. See note. (2000-120, s. 2; 2001-347, s. 1.1.)
§ 105-164.43B. (Recodified effective August 8, 2001 - See note) Contract with Certified Sales Tax Collector.
Recodified as § 105-164.42I(b) by Session Laws 2001-347, s. 1.1, effective August 8, 2001. See note. (2000-120, s. 2; 2001-347, s. 1.1.)
§ 105-164.43C: Repealed by Session Laws 2001-347, s. 1.2, effective August 8, 2001. See note.
§ 105-164.43D. Applicable due date when due date falls on a weekend, holiday, or when the Federal Reserve Bank is closed.
(a) Weekends and Holidays. - When the last day for doing an act required or permitted by this Article or Subchapter VIII of this Chapter falls on a Saturday, Sunday, or holiday, the act is considered to be done within the prescribed time limit if it is done on the next business day.
(b) Federal Reserve Bank Closure. - If the Federal Reserve Bank is closed on a due date that prohibits a person from making a payment by ACH debit or credit as required by this Article or Subchapter VIII of this Chapter, the payment is timely if made on the next day the Federal Reserve Bank is open. (2014-3, s. 14.10.)