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5/18/2018 <br />https://www.ncleg. net /gascripts/ statutes /statutelookup.pI ?statute= 105 -275 <br />(34) <br />Inventories owned by retail and wholesale merchants. 32 <br />(35) <br />Severable development rights, as defined in G.S. 136- 66,11(a), when severed and evidenced <br />by a deed recorded in the office of the register of deeds pursuant to G.S. 136- 66.11(c). <br />(36) <br />Repealed by Session Laws 2001 -474, s. 8, effective November 29, 2001. <br />(37) <br />Poultry and livestock and feed used in the production of poultry and livestock. <br />(38) <br />Repealed by Session Laws 2001 -474, s. 8, effective November 29, 2001. <br />(39) <br />Real and personal property that is: (i) owned by a nonprofit corporation organized upon the <br />request of a State or local government unit for the sole purpose of financing projects for <br />public use, (ii) leased to a unit of State or local government whose property is exempt from <br />taxation under G.S. 105 - 278.1, and (iii) used in whole or in part for a public purpose by the <br />unit of State or local government. If only part of the property is used for a public purpose, <br />only that part is excluded from the tax. This subdivision does not apply if any distributions are <br />made to members, officers, or directors of the nonprofit corporation. <br />(39a) <br />A correctional facility, including construction in progress, that is located on land owned by <br />the State and is constructed pursuant to a contract with the State, and any leasehold interest in <br />the land owned by the State upon which the correctional facility is located. <br />(40) <br />Computer software and any documentation related to the computer software. As used in this <br />subdivision, the term "computer software" means any program or routine used to cause a <br />computer to perform a specific task or set of tasks. The term includes system and application <br />programs and database storage and management programs. <br />The exclusion established by this subdivision does not apply to computer software and its <br />related documentation if the computer software meets one or more of the following <br />descriptions: <br />a. It is embedded software. "Embedded software" means computer instructions, known <br />as microcode, that reside permanently in the internal memory of a computer system or <br />other equipment and are not intended to be removed without terminating the operation <br />of the computer system or equipment and removing a computer chip, a circuit, or <br />another mechanical device. <br />b. It is purchased 'or licensed from a person who is unrelated to the taxpayer and it is <br />capitalized on the books of the taxpayer in accordance with generally accepted <br />accounting principles,-including financial accounting standards issued by the Financial <br />Accounting Standards Board. A person is unrelated to a taxpayer if (i) the taxpayer <br />and the person are not subject to any common ownership, either directly or indirectly, <br />and (ii) neither- the taxpayer nor the person has any ownership interest, either directly <br />or indirectly, in the other. The foregoing does not include development of software or <br />any modifications to software, whether done internally by the taxpayer or externally <br />by a third party, to meet the customer's specified needs. <br />This subdivision does not affect the value or taxable status of any property that is <br />otherwise subject to taxation under this Subchapter. <br />The provisions of the exclusion established by this subdivision are not severable. If any <br />provision of this subdivision or its application is held invalid, the entire subdivision is <br />repealed. <br />(41) <br />Repealed by Session Laws 2012 -120, s. 1(a), effective October 1, 2012. <br />(42) <br />A vehicle that is offered at retail for short-term lease or rental and is owned or leased by an <br />entity engaged in the business of leasing or renting vehicles to the general public for short- <br />term lease or rental. For the purposes of this subdivision, the term "short -term lease or rental" <br />shall have the same meaning as in G.S. 105- 187.1, and the term "vehicle" shall have the same <br />meaning as in G.S. 153A- 156(e) and G.S. 160A- 215.1(e). A gross receipts tax as set forth by <br />G.S. 153A -156 and G.S. 160A- 215.1 is substituted for and replaces the ad valorem tax <br />previously levied on these vehicles. <br />(42a) <br />Heavy equipment on which a gross receipts tax may be imposed under G.S. 153A -156.1 and <br />G.S. 160A- 215.2. <br />(43) <br />Real or tangible personal property that is subject to a capital lease pursuant to G.S. 115C -531. <br />https : / /www.ncleg.net/gascripts / statutes /statutelookup.pl ?statute= 105 -275 6/7 <br />