§ 105-228.2. Tax upon freight car line companies. - North Carolina Statutes

§105‑228.2.  Tax upon freight car line companies.

(a)        For purposes oftaxation under this section the property of freight line companies as definedis declared to constitute a special class of property. In lieu of all advalorem taxes by either or both the State government and the respective localtaxing jurisdictions, a tax upon gross earnings in the State as elsewheredefined shall be imposed.

(b)        Any person orpersons, joint‑stock association or corporation, wherever organized orincorporated, engaged in the business of operating cars or engaged in thebusiness of furnishing or leasing cars not otherwise listed for taxation inthis State, for the transportation of freight (whether such cars be owned bysuch company or any other person or company), over any railway or lines, inwhole or in part, within this State, such line or lines not being owned, leasedor operated by such company, whether such cars be termed box, flat, coal, ore,tank, stock, gondola, furniture, or refrigerator car or by some other name,shall be deemed a freight line company.

(c)        For the purposes oftaxation under this section all cars used exclusively within the State, or usedpartially within and without the State, and a proportionate part of theintangible values of the business as a going concern, are hereby declared tohave situs in this State.

(d)        Every freight linecompany, as hereinbefore defined, shall pay annually a sum in the nature of atax at three per centum (3%) upon the total gross earnings received from allsources by such freight line companies within the State, which shall be in lieuof all ad valorem taxes in this State of any freight company so paying thesame.

(e)        The term"gross earnings received from all sources by such freight line companieswithin the State" as used in this Article is hereby declared and shall beconstrued to mean all earnings from the operation of freight cars within theState for all car movements or business beginning and ending within the Stateand a proportion, based upon the proportion of car mileage within the State tothe total car mileage, or earnings on all interstate car movements or businesspassing through, or into or out of the State.

(f)         Every railroadcompany using or leasing the cars of any freight line company shall, uponmaking payment to such freight line company for the use or lease, after June30, 1943, of such cars withhold so much thereof as is designated in thissection. On or before March first of each year such railroad company shall makeand file with the Secretary of Revenue a statement showing the amount of suchpayment for the next preceding 12‑month period ending December 31, and ofthe amounts so withheld by it, and shall remit to the Secretary of Revenue theamounts so withheld. If any railroad company shall fail to make such report orfail to remit the amount of tax herein levied, or shall fail to withhold thepart of such payment hereby required to be withheld, such railroad companyshall become liable for the amount of the tax herein levied and shall not beentitled to deduct from its gross earnings for purposes of taxation the amountsso paid by it to freight line companies.

It is not the purpose of thissubsection to impose an unreasonable burden of accounting on railroad companiesoperating in this State, and the Secretary of Revenue is hereby authorized,upon the application of any railroad company, to approve any method ofaccounting which he finds to be reasonably adequate for determining the amountof mileage earnings by any car line company whose equipment is operated withinthe State by or on the lines of such railroad company. Further, if in theopinion of the Secretary of Revenue the tax imposed by this section can besatisfactorily collected direct from the freight line companies, he is herebyauthorized to fix rules and regulations for such direct collection, with theauthority to return at any time to the method of collection at source aboveprovided in this subsection.

(g)        Every car linecompany shall file such additional reports annually, and in such form and as ofsuch date as the Secretary of Revenue may deem necessary to determine theequitable amount of tax levied under this section.

(h)        Upon the filing ofsuch reports it shall be the duty of the Secretary of Revenue to inspect andverify the same and assess the amount of taxes due from freight line companiestherein named. Any freight line company against which a tax is assessed underthe provisions of this Article may at any time within 15 days after the lastday for the filing of reports by railroad companies, appear before theSecretary of Revenue at a hearing to be granted by the Secretary and offerevidence and argument on any matter bearing upon the validity or correctness ofthe tax assessed against it, and the Secretary shall review his assessment ofsuch tax and shall make his order confirming or modifying the same as he shalldeem just and equitable, and if any overpayment is found to have been made itshall be refunded by the Secretary. Provided, however that such payment if inthe amount of three dollars ($3.00) or more shall be refunded to the taxpayerwithin 60 days of the discovery thereof; if the amount of overpayment is lessthan three dollars ($3.00) then such overpayment shall be refunded only uponreceipt by the Secretary of Revenue of a written demand for such refund fromthe taxpayer. Provided further, that no overpayment shall be refundedirrespective of whether upon discovery or receipt of written demand if suchdiscovery is not made or such demand is not received within three years fromthe filing date of the return or within six months of the payment of the taxalleged to be an overpayment, whichever date is the later.

(i)         The provisions ofArticle 9 of this Chapter apply to this Article.

(j)         The provisions ofthis Article shall apply to all freight line gross earnings accruing from andafter June 30, 1943. (1943, c. 400, s. 8; 1957, c. 1340, s. 14; 1973, c.476, s. 193; 1998‑212, s. 29A.14(j).)