A BILL TO BE ENTITLED
AN ACT to ensure that FUNDS used for highway construction and maintenance are not inadvertently diverted to the general fund.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 105‑164.13 reads as rewritten:
"§ 105‑164.13.  Retail sales and use tax.
The sale at retail and the use, storage, or consumption in this State of the following tangible personal property, digital property, and services are specifically exempted from the tax imposed by this Article:
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(61a)	The sales price of or the gross receipts derived from the repair, maintenance, and installation services and service contracts listed in this subdivision are exempt from tax. Except as otherwise provided in this subdivision, property and services used to fulfill either a repair, maintenance, or installation service or a service contract exempt from tax under this subdivision are taxable. The list of repair, maintenance, and installation services and service contracts exempt from tax under this subdivision is as follows:
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e.	Services on driveways, parking lots, sidewalks, and roads, including services performed within the rights‑of‑way of roads where related to road construction, maintenance, or repair.
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(71)	Services provided and property leased or rented as part of a contract to provide the following with respect to driveways, parking lots, sidewalks, roads, and rights‑of‑way of roads:
a.	Lane closure and traffic diversion services.
b.	Flagging services.
c.	Rental and installation of road signs or signals, arrowboards, work zone lighting and light towers, and radar speed devices.
d.	Rental and installation of barrier devices, including cones, barrels, sentry walls, and guardrails."
SECTION 2.  G.S. 105‑164.14 is amended by adding a new subsection to read:
"(e1)	Department of Transportation. – The Department of Transportation 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 Department on building materials, supplies, fixtures, and equipment that become a part of or annexed to any building or structure owned or leased by the Department and erected, altered, or repaired for use by the Department is considered a sales or use tax liability incurred on direct purchases by the Department for purposes of this subsection. The administrative procedures specified in subsection (e) of this section apply to a refund under this subsection."
SECTION 3.  This act becomes effective July 1, 2019, and applies to sales made on or after that date.