North Carolina § 105-164 - 13B. Food exempt from tax.

§ 105-164. 13B. Food exempt from tax.

State Exemption. - Food is exempt from the taxes imposed by this Article unless the food is included in one of the subdivisions in this subsection. The following food items are subject to tax: Repealed by Session Laws 2005-276, s. 33.10, effective October 1, 2005. Dietary supplements. Food sold through a vending machine. Prepared food, other than bakery items sold without eating utensils by an artisan bakery. The term "bakery item" includes bread, rolls, buns, biscuits, bagels, croissants, pastries, donuts, danish, cakes, tortes, pies, tarts, muffins, bars, cookies, and tortillas. An artisan bakery is a bakery that meets all of the following requirements: It derives over eighty percent (80%) of its gross receipts from bakery items. Its annual gross receipts, combined with the gross receipts of all related persons, do not exceed one million eight hundred thousand dollars ($1,800,000). For purposes of this subdivision, the term "related person" means a person described in one of the relationships set forth in section 267(b) or 707(b) of the Code. Soft drinks. Repealed by Session Laws 2003-284, s. 45.6B, effective January 1, 2004. Candy. Administration of Local Food Tax. - The Secretary must administer local sales and use taxes imposed on food as if they were imposed under this Article. This applies to local taxes on food imposed under Subchapter VIII of this Chapter and under Chapter 1096 of the 1967 Session Laws. History (1998-212, s. 29A.1(b); 2001-347, s. 2.13; 2001-489, s. 3(b); 2003-284, ss. 45.6, 45.6A, 45.6B; 2003-416, s. 22; 2005-276, s. 33.10; 2008-107, s. 28.19(a); 2009-445, s. 42; 2015-6, s. 2.21.) Cross References. - As to applicability of this section to local government sales and use tax for beach nourishment, see Editor's note under G.S. 105-522 . Editor's Note. - Session Laws 2003-284, s. 45.1, provides: "The Streamlined Sales and Use Tax Agreement is an historic multistate agreement designed to simplify and modernize sales and use tax collection and administration. The states and businesses involved in the Streamlined Sales Tax Project recognize that a simplified and uniform system saves businesses compliance and audit costs, while also saving states administrative costs and improving voluntary compliance, which should increase state collections. To participate in the Agreement, North Carolina must amend or modify some of its sales and use tax law to conform to the simplifications and uniformity in the Agreement. This part [Part XLV of Session Laws 2003-284] makes those necessary changes." Session Laws 2003-284, s. 45.12, provides that the rewriting and redesignation of the former provisions of this section as subsection (a) by s. 45.6 is effective July 15, 2003, the addition of subsection (b) by s. 45.6A is effective October 1, 2003, and the repeal of subdivision (a)(6) by s. 45.6B is effective January 1, 2004. Session Laws 2003-284, s. 1.2, provides: "This act shall be known as the 'Current Operations and Capital Improvements Appropriations Act of 2003'." Session Laws 2003-284, s. 49.3, provides: "Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 2003-2005 fiscal biennium, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 2003-2005 fiscal biennium." Session Laws 2003-284, s. 49.5 is a severability clause. Session Laws 2003-284, s. 48.1, provides: "Parts 32 through 47 of this act do not affect the rights or liabilities of the State, a taxpayer, or another person arising under a statute amended or repealed by those parts before the effective date of its amendment or repeal; nor do they affect the right to any refund or credit of a tax that accrued under the amended or repealed statute before the effective date of its amendment or repeal." Session Laws 2005-276, s. 1.2, provides: "This act shall be known as the 'Current Operations and Capital Improvements Appropriations Act of 2005'." Session Laws 2005-276, s. 33.34, provides in part: "For prepayments of telecommunications and direct-to-home satellite services, the first billing period is considered to start on or after November 1, 2005. For prepayments of satellite digital audio radio services or cable services, the first billing period is considered to start on or after February 1, 2006." Session Laws 2005-276, s. 46.5 is a severability clause. Session Laws 2009-445, s. 42, made a technical correction to the prefatory language of Session Laws 2008-107, s. 28.19(a). Session Laws 2015-6, 2.13(b), as amended by Session Laws 2016-5, s. 3.12(b), provides in part: "A contractor who paid sales and use tax on an item exempt from sales and use tax pursuant to G.S. 105-164.13 E(c), as enacted by this section, may request a refund from the retailer, and the retailer may, upon issuance of the refund or credit, request a refund for the overpayment of tax under G.S. 105-164.11(a)(1) ." Effect of Amendments. - Session Laws 2003-284, ss. 45.6, 45.6A, and 45.6B, rewrote and redesignated the former provisions of the section as subsection (a); repealed subdivision (a)(6); and added subsection (b). See Editor's note for effective dates. Session Laws 2003-416, s. 22, effective August 14, 2003, inserted "G.S." in subdivision (1)a. Session Laws 2005-276, s. 33.10, effective October 1, 2005, repealed subdivision (a)(1), which read: "Alcoholic beverages, as defined in G.S. 105 113.68."; and added subdivision (a)(7). Session Laws 2008-107, s. 28.19(a), as amended by Session Laws 2009-445, s. 42, effective January 1, 2009, and applicable to sales made on or after that date, rewrote subdivision (a)(4). Session Laws 2015-6, s. 2.21, effective April 9, 2015, in sub-subdivision (a)(4)b. deleted "as defined in G.S. 105-163.010 " following "related persons" in the first sentence and added the second sentence.