§ 105-187.51C. (Expiring for sales occurring on or after July 1, 2013) Tax imposed on datacenter machinery and equipment. - North Carolina Statutes

§ 105‑187.51C. (Expiring for sales occurring on or after July 1, 2013) Tax imposed ondatacenter machinery and equipment.

(a)        Tax. – A privilegetax is imposed on an eligible datacenter, other than one as defined in G.S. 105‑164.3(8e),that purchases machinery or equipment to be located and used at the datacenterthat is capitalized for tax purposes under the Code and is used either:

(1)        For the provision ofdatacenter services, including equipment cooling systems for managing theperformance of the datacenter property; hardware and software for distributedand mainframe computers and servers; data storage devices; network connectivityequipment and peripheral components and systems.

(2)        For the generation,transformation, transmission, distribution, or management of electricity,including exterior substations and other business personal property used forthese purposes.

(b)        Rate. – The tax isone percent (1%) of the sales price of the eligible equipment and machinery.The maximum tax is eighty dollars ($80.00) per article.

(c)        Forfeiture. – Ifthe required level of investment to qualify as an eligible datacenter is nottimely made, then the rate provided under this section is forfeited. If therequired level of investment is timely made but any eligible machinery andequipment is not located and used at an eligible datacenter, then the rateprovided for that machinery and equipment under this section is forfeited. Ataxpayer that forfeits a rate under this section is liable for all past salesand use taxes avoided as a result of the forfeiture, computed at the combinedgeneral rate from the date the taxes would otherwise have been due, plusinterest at the rate established under G.S. 105‑241.21. If the forfeitureis triggered due to the lack of a timely investment required by this section,then interest is computed from the date the sales or use tax would otherwisehave been due. For all other forfeitures, interest is computed at the combinedgeneral rate from the time as of which the machinery or equipment was put to adisqualifying use. A credit is allowed against the sales or use tax owed as aresult of the forfeiture provisions of this subsection for privilege taxes paidpursuant to this section. For purposes of applying this credit, the fact thatpayment of the privilege tax occurred in a period outside the statute oflimitations provided under G.S. 105‑241.6 is not considered. The creditreduces the amount forfeited, and interest applies only to the reduced amount.The past taxes and interest are due 30 days after the date of forfeiture. Ataxpayer that fails to pay the past taxes and interest by the due date issubject to the provisions of G.S. 105‑236.

(d)        Sunset. – Thissection expires for sales occurring on or after July 1, 2013.  (2007‑323, s.31.22(b); 2009‑445, s. 17.)