AN ACT to restore the sales tax refund authorized for local school administrative units.

The General Assembly of North Carolina enacts:

SECTION 1.  Subdivision (2b) of subsection (c) of G.S. 105‑164.14 is reenacted as it existed immediately before its repeal.

SECTION 2.  Subdivision (2c) of subsection (c) of G.S. 105‑164.14 is reenacted as it existed immediately before its repeal.

SECTION 3.  G.S. 105‑467(b) reads as rewritten:

(b)      Exemptions and Refunds. – The State exemptions and exclusions contained in Article 5 of Subchapter I of this Chapter, except for the exemption for food in G.S. 105‑164.13B, apply to the local sales and use tax authorized to be levied and imposed under this Article. The State refund provisions contained in G.S. 105‑164.14 and G.S. 105‑164.14A apply to the local sales and use tax authorized to be levied and imposed under this Article. A refund of an excessive or erroneous State sales tax collection allowed under G.S. 105‑164.11 and a refund of State sales tax paid on a rescinded sale or cancelled service contract under G.S. 105‑164.11A apply to the local sales and use tax authorized to be levied and imposed under this Article. The aggregate annual local refund amount allowed an entity under G.S. 105‑164.14(b) for the State's fiscal year may not exceed thirteen million three hundred thousand dollars ($13,300,000). A

Except as provided in this subsection, a taxing county may not allow an exemption, exclusion, or refund that is not allowed under the State sales and use tax. A local school administrative unit and a joint agency created by interlocal agreement among local school administrative units pursuant to G.S. 160A‑462 to jointly purchase food service‑related materials, supplies, and equipment on their behalf is allowed an annual refund of sales and use taxes paid by it under this Article on direct purchases of tangible personal property and services. Sales and use tax liability indirectly incurred by the entity as part of a real property contract for real property that is owned or leased by the entity and is a capital improvement for use by the entity is considered a sales or use tax liability incurred on direct purchases by the entity for the purpose of this subsection. The refund allowed under this subsection does not apply to purchases of electricity, telecommunications service, ancillary service, piped natural gas, video programming, or a prepaid meal plan. A request for a refund is due in the same time and manner as provided in G.S. 105‑164.14(c). Refunds applied for more than three years after the due date are barred.

SECTION 4.  Effective July 1, 2024, G.S. 105‑164.44H is repealed, and the Director of the Budget shall adjust the budget of the State Public School Fund accordingly.

SECTION 5.  There is appropriated from the General Fund to the State Public School Fund a recurring amount equal to the amount of the adjustment in Section 4 of this act.

SECTION 6.  Except as otherwise provided, this act becomes effective July 1, 2024, and applies to sales made on or after that date.