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HomeMy WebLinkAboutAgenda - 04-21-20; 8-d - Approval of a Grace Period for the Registration and Renewal Process for Orange County Beverage Licenses through July 15, 2020 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: April 21, 2020 Action Agenda Item No. 8-d SUBJECT: Approval of a Grace Period for the Registration and Renewal Process for Orange County Beverage Licenses through July 15, 2020 DEPARTMENT: Tax Administration ATTACHMENT(S): INFORMATION CONTACT: March 31, 2020 NC Department of Nancy T. Freeman, Tax Administrator, Revenue Notice - COVID-19 (919) 245-2735 Resolution for Beverage License Renewal Grace Period North Carolina General Statute 105- 113.70 North Carolina General Statute 105- 236(a)(2) PURPOSE: To approve a resolution establishing a grace period for the registration and renewal of Orange County Beverage Licenses through July 15, 2020 due to the Covid-19 Pandemic and the State of Emergency issued by Governor Roy Cooper on March 10, 2020, and the Declaration of an Orange County State of Emergency to Order the Public to Stay at Home in order to slow the further spread of COVID-19. BACKGROUND: North Carolina General Statute 105-113.70 requires each person who receives a North Carolina Alcoholic Beverage Control permit to obtain the corresponding local license. All local licenses are issued by the city or county where the establishment is located. The license period is May 1 to April 30 each year, with April 30t" as the standard renewal deadline each year. Under North Carolina General Statute 105-236(a)(2), if a business fails to renew a license timely, a penalty equal to five percent of the amount prescribed for the license per month or fraction thereof until paid, not to exceed twenty-five percent of the amount, but in any event not less than five dollars shall be assessed. Because of COVID-19, the North Carolina Alcoholic Beverage Control Commission has established a grace period for the registration and renewal process for Alcoholic Beverage Control Permits through July 15, 2020. Due to the current crisis and the State's action on providing a grace period for State issued beverage licenses, Tax Administration staff requests approval of a grace period for the local Beverage License registration and renewal process through July 15, 2020. Given the fact that the State license must be obtained prior to the County license being issued, this action will correspond with the state's recent action. In addition, this action will assist small businesses impacted by COVID-19 pandemic. 2 FINANCIAL IMPACT: There will be minimal financial impact to the County. Late license fees for prior years typically have been less than $50 per year. SOCIAL JUSTICE IMPACT: There is no Orange County Social Justice Goal impact associated with this item. ENVIRONMENTAL IMPACT: There is no Orange County Environmental Responsibility Goal impact associated with this item. RECOMMENDATION(S): The Manager recommends that the Board approve the attached resolution establishing a grace period for the registration and renewal of Orange County Beverage Licenses through July 15, 2020. 3 NORTH CAROLINA iliili*ii!!!ilii!!ii DEPARTMENT •#!ii i!i!i!!ii!!i NCDOROF REVENUE 00000000 iiiii i!i March 31, 2020 Important Notice: Department of Revenue Expands Penalty Relief for Taxpayers Affected by Coronavirus Disease 2019 (COVOID-19) On March 10, 2020, Governor Roy Cooper signed Executive Order 116 declaring a state of emergency in response to COVID-19. On March 17, 2020, the North Carolina Department of Revenue ("Department") announced penalty relief for certain taxpayers with returns or payments due between March 15, 2020 and March 31, 2020. Subsequently, on March 20, 2020, the United States Department of the Treasury and the Internal Revenue Service announced that the time for filing certain federal returns was extended under Section 7508A of the Internal Revenue Code to July 15, 2020. On March 23, 2020, the Department announced relief for income and franchise taxpayers with returns and payments due on April 15, 2020. Expansion of North Carolina Tax Penalty Relief from March 15, 2020 through July 15, 2020 The Department expands relief from the following penalties for failing to obtain a license, to file a return, or to pay taxes: • Failure to obtain a license (G.S. 105-236(a)(2)); • Failure to file a return (G.S. 105-236(a)(3)); • Failure to pay tax (G.S. 105-236(a)(4)); and • The penalties regarding informational returns (G.S. 105-236(a)(10)); (collectively, "Late Action Penalties"). The Department will not asses penalties for failure to obtain a license, failure to file a return, or failure to pay a tax that is due on March 15, 2020 through July 15, 2020, if the corresponding license is obtained, return is filed, or tax is paid on or before July 15, 2020. The relief from Late Action Penalties applies to the following tax types: • Income and Franchise Tax (see Important Notice); • Withholding Tax; • Sales and Use Tax; • Scrap Tire Disposal Tax; Tax Administration Page 1 of 3 March 31, 2020 4 • White Goods Disposal Tax; • Motor Vehicle Lease and Subscription Tax; • Solid Waste Disposal Tax; • 911 Service Charge for Prepaid Telecommunications Service; • Dry-Cleaning Solvent Tax; • Primary Forest Products Tax; • Freight Car Line Companies; and • Various Taxes Administered by the Excise Tax Division (See Important Notice). Taxpayers do not need to request a penalty waiver to qualify for this relief. However, if a taxpayer receives a proposed assessment of a penalty covered by the relief granted in this notice, the taxpayer should contact the Department by phone, at 1-877-252-3052, or by writing to the Department at the following address: North Carolina Department of Revenue, Customer Service, P.O. Box 1168, Raleigh, NC 27602. Interest State law prevents the Department from waiving any interest except in the limited case of interest on taxes imposed prior to or during a period for which a taxpayer has declared bankruptcy under Chapter 7 or Chapter 13 of Title 11 of the United State Code. As such, if you owe additional tax, the Department is required to charge interest on any unpaid tax, accruing from the original due date, until the tax is paid. The interest rate is currently 5% per year. This is the minimum rate allowed by statute. Limitations The relief from Late Action Penalties granted herein does not change or extend the due date of any returns or payments. However, on March 23, 2020, the Secretary announced an extension of time to file income and franchise tax returns with due dates of April 15, 2020. See Important Notice. The relief granted herein does not include relief from other criminal and civil penalties imposed by North Carolina law. If you collect money from employees, contractors, or customers that is held in trust for the State and local governments, the use of such money is against the law and subject to civil penalty and criminal liability. Additional Relief In separate notices issued on March 23, 2020 and March 31, 2020, the Department announced relief from Late Action Penalties for other tax types. In addition to the relief granted in this notice, the Secretary of Revenue may waive or reduce any penalties provided for in Subchapter I of Chapter 105. See N.C. Gen. Stat. Tax Administration Page 2 of 3 March 31, 2020 5 § 105-237(a). A taxpayer seeking waiver of penalties not covered by this notice should review the Department's Penalty Policy and complete Form NC-5500, Request to Waive Penalties ("NC-5500"). Questions This Important Notice may be updated as new information becomes available. If you have any questions about this notice, you may call 1-877-252-3052 to speak to a customer service representative or write to Customer Service, PO Box 1168, Raleigh, NC 27602. To the extent there is any change to a statute or regulation, or new case law subsequent to the date of this notice, the provisions in this important notice may be superseded or voided. To the extent that any provisions in any other notice, directive, technical bulletin, or published guidance regarding the subject of this notice and issued prior to this notice conflict with this important notice, the provisions contained in this important notice supersede the previous guidance. Tax Administration Page 3 of 3 March 31, 2020 6 NORTH CAROLINA RES-2020-025 ORANGE COUNTY RESOLUTION to Provide a Grace Period for Registration or Renewal of an Orange County Beverage License through July 15, 2020 Whereas,the novel coronavirus disease-2019 (COVID-19)is a disease spreading across the globe causing flu-like symptoms,but with a significantly higher rate of death,particularly among those who are elderly or medically vulnerable; and Whereas, on March 10,2020, in order to address and mitigate the threat of COVID-19 to vulnerable populations and to slow the spread of COVID-19 in North Carolina,Governor Roy Cooper declared a state of emergency in North Carolina•, and Whereas, on March 25, 2020 Orange County issued a Stay-At-Home Order effective March 27,2020 in order to slow the further spread of COVID-19; and Whereas,under North Carolina General Statute 105-236(a)(2)if a business fails to renew a license timely a penalty equal to five percent of the amount prescribed for the license per month or fraction thereof until paid,not to exceed twenty-five percent of the amount so prescribed,but not be less than five dollars shall be assessed; and Whereas, on March 31, 2020 Governor Roy Cooper expanded the North Carolina Tax Penalty Relief from March 15,2020 through July 15,2020,which includes relief from the penalties for failing to obtain a license pursuant to G.S. 105-236(a)(2). Therefore,the North Carolina Alcoholic Beverage Control Commission will not asses penalties for failure to obtain a license that is due on March 15,2020 through July 15,2020, if the corresponding license is obtained on or before July 15,2020; and Whereas, a requirement of obtaining and Orange County Beverage License is first obtaining a beverage license from the North Carolina Alcoholic Beverage Control Commission, making a corresponding grace period a necessary action. NOW,THEREFORE,IT IS RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF ORANGE COUNTY THAT the request for a corresponding grace 7 period for the registration and renewal of Orange County Beverage Licenses through July 15, 2020 is approved. Upon motion duly made and seconded,the foregoing resolution was passed by the following votes: Ayes: Commissioners Noes: I,Donna Baker, Clerk to the Board of Commissioners for the County of Orange,North Carolina,DO HEREBY CERTIFY that the foregoing has been carefully copied from the recorded minutes of the Board of Commissioners for said County at a business meeting of said Board held on , said record having been made in the Minute Book of the minutes of said Board, and is a true copy of so much of said proceedings of said Board as relates in any way to the passage of the resolution described in said proceedings. WITNESS my hand and the corporate seal of said County,this day of 2020. Clerk to the Board of Commissioners 8 North Carolina General Statute § 105-113.70. Issuance, duration, transfer of license. (a) Issuance, Qualifications. - Each person who receives an ABC permit shall obtain the corresponding local license, if any, under this Article. All local licenses are issued by the city or county where the establishment for which the license is sought is located. No documentation shall be required of the applicant except as provided in this section. Issuance of a local license is mandatory if the applicant holds the corresponding ABC permit and provides all of the following: (i) a copy of the most recently completed State application form for an ABC permit exclusive of any attachments, (ii)the ABC permit for visual inspection, and (iii) payment of the prescribed tax. No local license may be issued under this Article until the applicant has received from the ABC Commission the applicable permit for that activity, and no county license may be issued for an establishment located in a city in that county until the applicant has received from the city the applicable license for that activity. (b) Duration. -All licenses issued under this section are annual licenses for the period from May 1 to April 30. (c) Transfer. -A license may not be transferred from one person to another or from one location to another. (d) License Exclusive. -A local government may not require a license for activities related to the manufacture or sale of alcoholic beverages other than the licenses stated in this Article. (1985, c. 114, s. 1; 1998-95, s. 16; 2017-87, s. 17.) 9 § 105-236. Penalties; situs of violations; penalty disposition. (a) Penalties. -The following civil penalties and criminal offenses apply: (2) Failure to Obtain a License. - For failure to obtain a license before engaging in a business,trade or profession for which a license is required,the Secretary shall assess a penalty equal to five percent(5%) of the amount prescribed for the license per month or fraction thereof until paid, not to exceed twenty-five percent (25%) of the amount so prescribed, but in any event shall not be less than five dollars ($5.00). In cases in which the taxpayer, after written notification by the Department, fails to obtain a license as required under G.S. 105-449.65 or G.S. 105-449.131, the Secretary may assess a penalty of one thousand dollars ($1,000).