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The North Carolina sales and use tax of 2.6% on sales of electricity to manufacturing industries and plants, and 2.83% on sales to farmers will be gradually phased out beginning October 1, 2007, and eventually eliminated effective July 1, 2010. In addition, the privilege tax levied on purchases of fuel by manufacturing industries or plants will be repealed on the same schedule. (C.H. 397 (S.B. 3), Laws 2007, effective as noted)


North Dakota has amended the definitions of “power plant” and “repowering” to include plants that process or convert coal. The definitions previously only addressed plants that processed or converted lignite. The legislation also provides for an exemption for the sale or production of environmental upgrade equipment that is used exclusively in power plants and delivered on or after January 1, 2007. Oil refinery or gas processing plant environmental upgrade equipment are eligible for a reduced rate and exemption for any eligible equipment purchased after June 30, 2007. (H.B. 1365, Laws 2007, Effective March 30, 2007)


In a sales tax newsletter, the North Dakota Office of the State Tax Commissioner discussed internet sales. They stated that internet sellers located in North Dakota are required to collect state and applicable local sales taxes on internet sales made to customers in North Dakota. The taxable base includes all delivery charges. Additionally, receipts from sales made and products shipped to customers outside of North Dakota were not subject to tax. These transactions are viewed as “sales in interstate commerce” and are not subject to North Dakota sales tax. (North Dakota Sales Tax Newsletter, March 31, 2005)


In an amendment to current North Dakota law, environmental upgrade equipment used in power plants or for repowering existing power plants that began construction after June 30, 1991 is exempt from sales and use tax. An “environmental upgrade” is defined as “an investment greater than twenty-five million dollars or one hundred thousand dollars per megawatt of installed nameplate capacity, whichever is less ... for reducing emissions or increasing efficiency at an existing power plant.” These changes to the existing law are effective after June 30th, 2005. (North Dakota H.B. 1268, Laws 2005)


On February 28, 2005 North Dakota submitted a petition to the Governing Board of the Streamlined Sales and Use Tax Agreement for membership into the Agreement. Provided in conjunction with the petition was a compliance checklist, which will be used to determine if North Dakota’s legislation sufficiently conforms to the rules set forth under the Agreement. All effective dates for North Dakota’s conforming legislation are set for January 1, 2006. Under current rules, North Dakota would not qualify toward the 20% of population threshold necessary to enact the Agreement until its legislation is in effect. North Dakota would therefore not be eligible to qualify toward the July 1, 2005 anticipated enactment. However, on April 16, 2005 the SST Implementing States are expected to vote on an amendment which would allow states to qualify toward the threshold level once necessary legislation is enacted, regardless of the effective date. (Petition for Membership and Certificate of Compliance, Office of North Dakota Tax Commissioner, February 28, 2005; Proposed Amendment to Section 702 of the Streamlined Sales Tax Agreement, Secretary Gary R. Viken, South Dakota Department of Revenue and Regulation, February 14, 2005.)



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