Use tax on contractors; and to provide an effective date.
Impact
If enacted, HB1546 will modify existing North Dakota tax law, particularly enhancing the provisions regarding contractor taxes. The most significant alteration is the introduction of a streamlined process aimed at exempting contractors' purchases from state sales and use tax, specifically when these acquisitions are intended for public property improvements. This legislation signifies an effort to support infrastructure development within the state by making it more economically viable for contractors to engage in public projects.
Summary
House Bill 1546 proposes a sales and use tax exemption for contractors, subcontractors, and builders purchasing materials for projects on behalf of the state of North Dakota. This bill aims to reduce the financial burden on contractors who are engaged in state projects by eliminating the sales tax applicable to tangible personal property used in such contracts. The proposed exemption is contingent upon the contractor obtaining a purchasing agent authorization letter from the state and an exemption certificate issued by the tax commissioner prior to acquiring the property.
Contention
Key points of contention surrounding HB1546 include concerns regarding the implications for local governments, as the exemption does not apply to taxes levied under home rule authority by municipalities. Critics may express worry that the bill will result in reduced revenue streams for local entities that depend on these taxes, thereby complicating budget management for cities and counties. Furthermore, discussions may arise regarding the feasibility of monitoring compliance with the new rules and determining which purchases qualify for the exemption.
The salary of the state tax commissioner, property assessment increase notices, and use tax exemptions; to provide an exemption; to provide for a transfer; to provide an effective date; and to provide an expiration date.
A use tax exemption for materials used to construct, expand, or upgrade a hospice care facility owned by a hospice program; and to provide an effective date.
Evaluation of economic development tax incentives and a sales and use tax exemption for raw materials, single-use product contact systems, and reagents used for biologic manufacturing; to provide for a legislative management report; to provide an effective date; and to provide an expiration date.
Evaluation of economic development tax incentives, a sales and use tax exemption for materials used to construct or expand a coal processing facility that utilizes coal as a feedstock, and severance and sales and use tax exemptions for coal used in a coal processing facility that utilizes coal as a feedstock; and to provide an effective date.
A sales tax exemption for a fertilizer plant and allocation of sales tax revenue; to provide a continuing appropriation; to provide for a legislative management report; and to provide an expiration date.
The sales tax exemption for raw materials, single-use product contact systems, and reagents used for biologic manufacturing; and to provide an effective date.
The carbon dioxide pipeline exemption, payments in lieu of taxes for certain carbon dioxide pipeline property, and the carbon dioxide capture and injection sales tax exemption; and to provide an effective date.
Labor: hours and wages; prevailing wage; require on certain solar and wind energy projects, and require contractors to obtain a registration to perform work on certain projects. Amends secs. 1, 2, 8 & 22 of 2023 PA 10 (MCL 408.1101 et seq.) & adds secs. 2a & 25a.