GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2011

SESSION LAW 2011-293

HOUSE BILL 93

AN ACT to Allow a seller to apply overcollected sales tax to offset a use tax liability on a related transaction.

The General Assembly of North Carolina enacts:

SECTION 1.  G.S. 105-164.11(a) reads as rewritten:

"(a)       Remittance of Over-Collections Overcollections to Secretary. - When the tax is collected for any period ison a taxable sale in excess of the total amount that should have been collected, collected or is collected on an exempt or nontaxable sale, the total amount collected must be paid over remitted to the Secretary. When tax is collected for any period on exempt or nontaxable sales the tax erroneously collected shall be remitted to the Secretary and no refund shall be made to a taxpayer unless the purchaser has received credit for or has been refunded the amount of tax erroneously charged. If the Secretary determines that the seller overcollected the sales tax on a transaction, the Secretary shall take only one of the actions listed in this subsection. This provision subsection shall be construed with other provisions of this Article and given effect so as to result in the payment to the Secretary of the total amount collected as tax if it is in excess of the amount that should have been collected.

(1) If the Secretary determines that the seller overcollected tax on a transaction, the Secretary may allow a refund of the tax. The Secretary may allow the refund only if the seller gives the purchaser credit for or a refund of the overcollected tax. The Secretary shall not refund the overcollected tax to the seller if the seller has elected to offset a use tax liability on a related transaction with the overcollected sales tax under subdivision (2) of this subsection.

(2) If the Secretary determines that a seller who overcollected sales tax on a transaction is instead liable for a use tax on a related transaction, the Secretary may allow the seller to offset the use tax liability with the overcollected sales tax. The Secretary shall not allow an offset if the seller has elected to receive a refund of the overcollected tax under subdivision (1) of this subsection. The decision by a seller to receive an offset of tax liability rather than a refund of the overcollected tax does not affect the liability of the seller to the purchaser for the overcollected tax.

(3) If neither subdivision (1) nor (2) of this subsection applies, the Secretary shall retain the total amount collected on the transaction."

SECTION 2.  This act becomes effective July 1, 2011, and applies to tax liabilities that accrue on or after that date.

In the General Assembly read three times and ratified this the 16^th day of June, 2011.

                                                                    s/  Walter H. Dalton

                                                                         President of the Senate

                                                                    s/  Thom Tillis

                                                                         Speaker of the House of Representatives

                                                                    s/  Beverly E. Perdue

                                                                         Governor

Approved 4:42 p.m. this 24^th day of June, 2011