reglab/statecodes huggingface dataset:
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter C - CORPORATE INCOME TAX › Section .2000 - EXTENSION OF TIME FOR FILING RETURN › Section 05C .2004 - EXTENSION OF FILING DATE

Current through Register Vol. 39, No. 2, July 15, 2024
For tax years beginning before January 1, 2008, a corporation will
													 receive a seven-month extension of time to file its corporate franchise and income tax return if the
													 corporation timely files Form CD-419, Application for Extension of Time To File Corporate Franchise and
													 Income Tax Return. For tax years beginning on or after January 1, 2008, the extension of time is six months.
													 Payment of tax is not required to obtain an extension; however, interest accrues at the rate set under
													 G.S.
													 105-241.21(a) on the amount not paid by the original due
													 date of the corporate franchise and income tax return and the failure to pay penalty in
													 G.S.
													 105-236(4) applies to the amount not paid by the original
													 due date of the return.
Authority
													 G.S.
													 105-262;
													 105-263;
Eff. April 1, 1999;
Amended
													 Eff. January 1, 2009; July 1, 1999; January 1, 1994;
Pursuant to
													 G.S.
													 150B-21.3A, rule is necessary without substantive public interest Eff.
													 August 19, 2017.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter C - CORPORATE INCOME TAX › Section .2100 - DISSOLUTIONS AND WITHDRAWALS › Section 05C .2101 - REQUIREMENTS WHEN CORPORATION ENDS

Current through Register Vol. 39, No. 2, July 15, 2024
A domestic corporation that is dissolved, whether voluntarily,
													 administratively, or judicially, or a foreign corporation that withdraws from the State or has its
													 certificate of authority revoked must file all tax reports and returns due and pay all taxes due. The final
													 return of a corporation that has been dissolved, has withdrawn, or has had its certificate of authority
													 revoked must include in income any unrealized or unreported profit from installment sales.
Authority
													 G.S.
													 55-14-01;
													 55-14-20;
													 55-14-30;
													 55-15-20;
													 55-15-30;
													 105-130.16;
													 105-262.
Eff. February 1, 1976;
Amended
													 Eff. July 1, 1999; April 1, 1997; January 1, 1995; January 1, 1994; November 1, 1991; April 1,
													 1991;
Pursuant to G.S.
													 150B-21.3A, rule is necessary without substantive public interest Eff.
													 August 19, 2017.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter C - CORPORATE INCOME TAX › Section .2100 - DISSOLUTIONS AND WITHDRAWALS › Section 05C .2102 - REPEALED - WITHDRAWALS/FILING REQUIREMENTS

Current through Register Vol. 39, No. 2, July 15, 2024
Authority
													 G.S.
													 55-15-20;
													 105-130.15;
													 105-262;
Eff. February 1, 1976;
Amended
													 Eff. January 1, 1994; November 1, 1991; April 1, 1991;
Repealed Eff. July 1,
													 1999.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter C - CORPORATE INCOME TAX › Section .2200 - EXEMPT CORPORATIONS › Section 05C .2201-.2207

Current through Register Vol. 39, No. 2, July 15, 2024
Authority
													 G.S.
													 105-130.11;
													 105-130.12;
													 105-262;
Eff. February 1, 1976;
Repealed Eff. October 31, 1981.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter C - CORPORATE INCOME TAX › Section .2300 - REPORTING FEDERAL CHANGES › Section 05C .2301-.2304

Current through Register Vol. 39, No. 2, July 15, 2024
Authority
													 G.S.
													 105-130.20;
													 105-262;
Eff. February 1, 1976;
Repealed Eff. October 31, 1981.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter C - CORPORATE INCOME TAX › Section .2400 - DOMESTIC INTERNATIONAL SALES CORPORATION › Section 05C .2401 - DOING BUSINESS ACTIVITIES OF DISC

Current through Register Vol. 39, No. 2, July 15, 2024
A domestic international sales corporation (DISC) is a domestic
													 corporation whose income is derived from export sales. The DISC transacts business by exporting the products
													 of its parent or related companies with the income earned by the DISC deferred for federal income tax
													 purposes. The Tax Reform Act of 1984 left only the interest charge DISC remaining whose tax benefits are
													 limited with an interest charge for tax deferred amounts imposed on DISC shareholders. Since
													 G.S.
													 105-130.3 imposes an income tax on every corporation unless otherwise
													 exempted, a DISC doing business in this state shall be subject to income tax in this state and subject to the
													 rules in this Subchapter except as provided in this Section.
Authority
													 G.S.
													 105-130.3;
													 105-262;
Eff. December 5, 1976;
Amended
													 Eff. January 1, 1994;
Pursuant to
													 G.S.
													 150B-21.3A, rule is necessary without substantive public interest Eff.
													 August 19, 2017.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter C - CORPORATE INCOME TAX › Section .2400 - DOMESTIC INTERNATIONAL SALES CORPORATION › Section 05C .2402 - REPEALED - DETERMINATION OF DISC NET INCOME

Current through Register Vol. 39, No. 2, July 15, 2024
Authority
													 G.S.
													 105-130.3;
													 105-262;
Eff. December 5, 1976;
Repealed Eff. January 1, 1994.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter C - CORPORATE INCOME TAX › Section .2400 - DOMESTIC INTERNATIONAL SALES CORPORATION › Section 05C .2403 - APPORTIONMENT OF DISC NET INCOME

Current through Register Vol. 39, No. 2, July 15, 2024
The net income of a DISC subject to a tax measured by net income
													 both within and without this state shall be apportioned to this state by use of the applicable apportionment
													 formula set out in G.S.
													 105-130.4. The ratio determined thereunder for apportioning the net income
													 of the DISC shall be computed by including the property, payrolls and sales of the parent corporation and
													 related participants in the respective factors of the DISC.
Authority
													 G.S.
													 105-130.4;
													 105-130.6;
													 105-130.16;
													 105-262;
Eff. December 5, 1976;
Amended
													 Eff. January 1, 1994;
Pursuant to
													 G.S.
													 150B-21.3A, rule is necessary without substantive public interest Eff.
													 August 19, 2017.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter C - CORPORATE INCOME TAX › Section .2400 - DOMESTIC INTERNATIONAL SALES CORPORATION › Section 05C .2404 - DIVIDENDS RECEIVED FROM DISC

Current through Register Vol. 39, No. 2, July 15, 2024
Dividends received by a corporate shareholder from a DISC must be
													 included in the corporate shareholder's taxable income. Dividends received from a DISC by a corporate
													 shareholder taxable in another state must be included in the corporate shareholder's apportionable income and
													 apportioned to North Carolina. The term "dividends" means all amounts currently taxable under the Internal
													 Revenue Code to corporate shareholders of a DISC whether or not distributed.
Authority
													 G.S.
													 105-130.4;
													 105-262;
Eff. December 5, 1976;
Amended
													 Eff. January 1, 2005; August 1, 2002;
Pursuant to
													 G.S.
													 150B-21.3A, rule is necessary without substantive public interest Eff.
													 August 19, 2017.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter C - CORPORATE INCOME TAX › Section .2400 - DOMESTIC INTERNATIONAL SALES CORPORATION › Section 05C .2405 - REPEALED - EARNINGS OF DISC NOT PREVIOUSLY TAXED

Current through Register Vol. 39, No. 2, July 15, 2024
Authority
													 G.S.
													 105-130.1;
													 105-130.6;
													 105-130.15;
													 105-130.16;
													 105-262;
Eff. November 1, 1984;
Repealed Eff. April 1, 1991.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter C - CORPORATE INCOME TAX › Section .2500 - FOREIGN SALES CORPORATION (FSC) › Section 05C .2501-.2504

Current through Register Vol. 39, No. 2, July 15, 2024
Authority
													 G.S.
													 105-130.3;
													 105-130.4;
													 105-130.6;
													 105-130.7;
													 105-130.15;
													 105-130.16;
													 105-262;
Eff. August 1, 1986;
Amended
													 Eff. January 1, 1988;
Repealed Eff. October1, 1992.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter C - CORPORATE INCOME TAX › Section .2600 - REINSTATEMENT OF CORPORATE CHARTER › Section 05C .2601 - REPEALED - REINSTATEMENT OF CORPORATE CHARTER

Current through Register Vol. 39, No. 2, July 15, 2024
Authority
													 G.S.
													 105-230;
													 105-232;
Eff. November 1, 1991;
Repealed Eff. October 1, 1993.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter D - ALTERNATIVE APPORTIONMENT METHOD › Section 05D .0101-.0106

Current through Register Vol. 39, No. 2, July 15, 2024
Authority
											  G.S.
											  105-163.25;
											  105-163.27;
											  105-163.30;
											  105-163.32;
											  105-163.33; 105.262;
Eff. February 1,
											  1976;
Amended Eff. January 1, 1978;
Repealed Eff. October 31,
											  1981.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter D - ALTERNATIVE APPORTIONMENT METHOD › Section 05D .0107 - PURPOSE

Current through Register Vol. 39, No. 2, July 15, 2024
The Secretary of Revenue or his designee will consider requests from
											  corporate taxpayers for use of an alternative apportionment formula in determining tax bases for franchise
											  and income taxes.
Authority
											  G.S.
											  105-122(c1)(2);
											  105-130.4(t1);
											  105-262;
Eff. February 1, 2008;
Pursuant to G.S.
											  150B-21.3A, rule is necessary without substantive public interest Eff.
											  August 19, 2017.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter D - ALTERNATIVE APPORTIONMENT METHOD › Section 05D .0108 - WHO MAY SUBMIT REQUEST

Current through Register Vol. 39, No. 2, July 15, 2024
(a) Any C-Corporation, S-Corporation, or Limited
										Liability Company electing to be treated as either a C-Corporation or S-Corporation for federal income tax
										purposes, which believes that the method of allocation or apportionment as administered by the Secretary of
										Revenue has operated or will so operate as to subject it to taxation on a greater portion of its income than
										is reasonably attributable to business or earnings may request an alternative apportionment method.
(b) Any C-Corporation, S-Corporation, or Limited Liability Company electing
										to be treated as a C-Corporation for federal income tax purposes, which believes that the method of
										allocation or apportionment as administered by the Secretary of Revenue has operated or will so operate as to
										subject it to taxation on a greater portion of its capital stock, surplus and undivided profits than is
										reasonably attributed to business within the state may also request an alternative apportionment
										method.
Authority
											  G.S.
											  105-122(c1)(2);
											  105-130.4(t1);
											  105-262;
Eff. February 1, 2008;
Pursuant to G.S.
											  150B-21.3A, rule is necessary without substantive public interest Eff.
											  August 19, 2017.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter D - ALTERNATIVE APPORTIONMENT METHOD › Section 05D .0110 - TIME FOR FILING

Current through Register Vol. 39, No. 2, July 15, 2024
The request shall be filed with the Secretary not later than 90 days
											  after the regular or extended due date of the tax return.
Authority
											  G.S.
											  105-122(c1)(2);
											  105-130.4(t1);
											  105-262;
Eff. February 1, 2008;
Pursuant to G.S.
											  150B-21.3A, rule is necessary without substantive public interest Eff.
											  August 19, 2017.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter D - ALTERNATIVE APPORTIONMENT METHOD › Section 05D .0111 - NOTICE OF CONFERENCE

Current through Register Vol. 39, No. 2, July 15, 2024
The Secretary shall schedule a conference to hear the corporation's
											  request and will give notice of the time, date and place of the conference to the taxpayer at least 30 days
											  prior thereto. Notice will be by United States Mail sent to the taxpayer's last known address. The date set
											  for the conference must be within 90 days after the timely request of the conference or at a later date
											  mutually agreed upon by the Taxpayer and the Secretary. The date set for the conference may be postponed once
											  at the request of the Taxpayer and once at the request of the Secretary for up to 90 days or for a longer
											  period mutually agreed upon by the Taxpayer and the Secretary.
Authority
											  G.S.
											  105-122(c1)(2);
											  105-130.4(t1);
											  105-262;
Eff. February 1, 2008;
Pursuant to G.S.
											  150B-21.3A, rule is necessary without substantive public interest Eff.
											  August 19, 2017.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter D - ALTERNATIVE APPORTIONMENT METHOD › Section 05D .0112 - WHO SHALL ATTEND THE CONFERENCE

Current through Register Vol. 39, No. 2, July 15, 2024
The Secretary or their designee and the Director of the Corporate Tax
											  Division or their designee, along with any other Department personnel the Secretary or Director shall deem
											  appropriate, shall attend any conference pursuant to a request for an alternative apportionment formula. The
											  taxpayer is not required to personally appear or be represented at the conference. Legal counsel or other tax
											  practitioner may appear with or without the taxpayer on the taxpayer's behalf.
Authority
											  G.S.
											  105-122(c1)(2);
											  105-130.4(t1);
											  105-262;
Eff. February 1, 2008;
Readopted Eff. May 1, 2018.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter D - ALTERNATIVE APPORTIONMENT METHOD › Section 05D .0113 - CONDUCT OF THE CONFERENCE

Current through Register Vol. 39, No. 2, July 15, 2024
(a) If the corporation or its representative
										fails to appear after proper service of notice, the Secretary may proceed with the conference and make his
										decision in the absence of the party.
(b) The taxpayer shall be
										given an opportunity to present arguments on issues of law and policy and an opportunity to present evidence
										on issues of fact.
(c) The rules of evidence as applied in the
										trial division of the General Court of Justice do not apply.
(d)
										An informal record containing in substance the evidence, contentions and arguments presented at the
										conference shall be made.
Authority
											  G.S.
											  105-122(c1)(2);
											  105-130.4(t1);
											  105-262;
Eff. February 1, 2008;
Pursuant to G.S.
											  150B-21.3A, rule is necessary without substantive public interest Eff.
											  August 19, 2017.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter D - ALTERNATIVE APPORTIONMENT METHOD › Section 05D .0114 - REMEDY

Current through Register Vol. 39, No. 2, July 15, 2024
(a) If the Secretary finds that
										the statutory formula does not fairly represent the corporation's business activity in North Carolina, he may
										require:
(1) separate accounting;
(2) the exclusion of any one or more of the factors;
(3) the inclusion of one or more additional factors which will fairly
										represent the taxpayer's business activity in this State, or
(4)
										the employment of any other method to effectuate and equitable allocation and apportionment of the taxpayer's
										income.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter D - ALTERNATIVE APPORTIONMENT METHOD › Section 05D .0115 - FINAL DECISION

Current through Register Vol. 39, No. 2, July 15, 2024
A final decision shall be furnished to the requesting corporation within
											  60 days from the date of the conference or within 60 days after the date any additional information requested
											  by the Secretary during the conference is provided.
Authority
											  G.S.
											  105-122(c1)(2);
											  105-130.4(t1);
											  105-262;
Eff. February 1, 2008;
Pursuant to G.S.
											  150B-21.3A, rule is necessary without substantive public interest Eff.
											  August 19, 2017.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter E - INSURANCE PREMIUMS TAX AND REGULATORY SURCHARGE › Section .0100 - GENERAL PROVISIONS › Section 05E .0101 - REDUCED INSTALLMENT PAYMENTS

Current through Register Vol. 39, No. 2, July 15, 2024
The Secretary may reduce the installment payment requirements for
													 the quarterly insurance gross premiums tax and the regulatory surcharge if an insurer submits a written
													 statement to the Department indicating that the insurer reasonably believes that its total estimated payments
													 made for the current year will exceed the anticipated tax liability for the year.
This written statement must contain the basis for the insurer's
													 belief that its installment payments should be reduced and state the factors supporting that belief, such as
													 changes in the law or a reduction in the insurer's writings. The statement must be submitted at least 45 days
													 before the due date of an installment payment. An insurer that files a timely statement may reduce its next
													 installment payment in accordance with the statement unless the insurer receives written notice from the
													 Department that its request has been denied or adjusted.
Authority
													 G.S.
													 105-228.5;
													 105-262;
Eff. January 1, 1989;
Transferred and Recodified from 11 NCAC
													 11E .0110 Eff. January 15, 1998;
Amended Eff. August 1,
													 1998;
Pursuant to G.S.
													 150B-21.3A, rule is necessary without substantive public interest Eff.
													 August 19, 2017.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter E - INSURANCE PREMIUMS TAX AND REGULATORY SURCHARGE › Section .0100 - GENERAL PROVISIONS › Section 05E .0102 - REPEALED - ADDITIONAL FIRE AND LIGHTNING TAXES

Current through Register Vol. 39, No. 2, July 15, 2024
Authority
													 G.S.
													 105-228.5;
													 105-262;
Eff. February 1, 1976;
Readopted Eff. February 28, 1978;
Transferred and Recodified from
													 11 NCAC 11E
													 .0202 Eff. January 15, 1998;
Amended Eff. August 1, 1998;
Repealed Eff. February 1, 2008.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter E - INSURANCE PREMIUMS TAX AND REGULATORY SURCHARGE › Section .0100 - GENERAL PROVISIONS › Section 05E .0103 - PREMIUM FINANCE CHARGES AND OTHER CHARGES

Current through Register Vol. 39, No. 2, July 15, 2024
Gross premiums from business in this State include premium finance
													 charges and installment payment charges or other charges received as a result of the partial payment of
													 premiums by a policyholder. These charges are therefore subject to tax.
Authority
													 G.S.
													 105-228.5;
													 105-262;
Eff. April 1, 1993;
Transferred and Recodified from 11 NCAC
													 11E .0203 Eff. January 15, 1998;
Amended Eff. August 1,
													 1998;
Pursuant to G.S.
													 150B-21.3A, rule is necessary without substantive public interest Eff.
													 August 19, 2017.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter E - INSURANCE PREMIUMS TAX AND REGULATORY SURCHARGE › Section .0100 - GENERAL PROVISIONS › Section 05E .0104 - DIVIDENDS APPLIED TO PURCHASE ADDITIONAL PAID UP LIFE

Current through Register Vol. 39, No. 2, July 15, 2024
Dividends applied to purchase additional paid-up life insurance are
													 not taxable under G.S.
													 105-228.5 since gross premiums are deemed to be the amounts specified in
													 the life insurance policy contracts when issued.
Authority
													 G.S.
													 105-228.5;
													 105-262;
Eff. February 1, 1976;
Readopted Eff. February 28, 1978;
Transferred & Recodified from
													 11 NCAC 11E
													 .0302 Eff. January 15, 1998;
Pursuant to
													 G.S.
													 150B-21.3A, rule is necessary without substantive public interest Eff.
													 August 19, 2017.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter E - INSURANCE PREMIUMS TAX AND REGULATORY SURCHARGE › Section .0100 - GENERAL PROVISIONS › Section 05E .0105 - REPEALED - GROUP PREMIUMS

Current through Register Vol. 39, No. 2, July 15, 2024
Authority
													 G.S.
													 105-228.5;
													 105-262;
Eff. February 1, 1976;
Readopted Eff. February 28, 1978;
Transferred and Recodified from
													 11 NCAC 11E
													 .0304 Eff. January 15, 1998;
Amended Eff. August 1, 1998;
Repealed Eff. February 1, 2008.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter E - INSURANCE PREMIUMS TAX AND REGULATORY SURCHARGE › Section .0100 - GENERAL PROVISIONS › Section 05E .0106 - EMPLOYEE BENEFIT PLAN CONTRIBUTIONS

Current through Register Vol. 39, No. 2, July 15, 2024
Insurance company contributions or subsidies in the self-insurance
													 of life and accident and health insurance coverage as an employee benefit plan are not taxable under
													 G.S.
													 105-228.5.
Authority
													 G.S.
													 105-228.5;
													 105-262;
Eff. February 1, 1976;
Readopted Eff. February 28, 1978;
Transferred & Recodified from
													 11 NCAC 11E
													 .0305 Eff. January 15, 1998;
Pursuant to
													 G.S.
													 150B-21.3A, rule is necessary without substantive public interest Eff.
													 August 19, 2017.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter F - SECRETARY'S AUTHORITY TO ADJUST NET INCOME OR TO REQUIRE A COMBINED RETURN › Section .0100 - GENERAL › Section 05F .0101 - SCOPE

Current through Register Vol. 39, No. 2, July 15, 2024
The rules in this Subchapter apply to the Secretary's authority
													 under G.S.
													 105-130.5A to adjust net income or to require a combined return for taxable
													 years beginning on or after January 1, 2012.
Authority
													 G.S.
													 105-130.5A;
													 105-262.1;
Eff. January 31, 2013;
Pursuant to G.S.
													 150B-21.3A, rule is necessary without substantive public interest Eff.
													 August 19, 2017.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter F - SECRETARY'S AUTHORITY TO ADJUST NET INCOME OR TO REQUIRE A COMBINED RETURN › Section .0100 - GENERAL › Section 05F .0102 - DEFINITIONS

Current through Register Vol. 39, No. 2, July 15, 2024
As used in
													 G.S.
													 105-130.5A and this Subchapter, the following definitions shall
													 apply:
(1) "Centralized cash management" means a process by which an
											  affiliated group of businesses makes all or most cash management decisions from one location, such as a
											  headquarters or designated subsidiary, that results in individual affiliates having little autonomy in making
											  decisions concerning how cash is managed.
(2) "Economic position"
											  means the status of a taxpayer's assets, liabilities, and equity (whether those items are actual, contingent,
											  or potential) and their interrelationship to one another.
(3)
											  "Material benefit" means an improvement in the economic position of the taxpayer on a pre-tax
											  basis.
(4) "Material business activity" means an activity that is
											  both:
(a) An integral part of the unitary group's business; and
(b) Performed on a regular and continuous basis.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter F - SECRETARY'S AUTHORITY TO ADJUST NET INCOME OR TO REQUIRE A COMBINED RETURN › Section .0200 - ECONOMIC SUBSTANCE › Section 05F .0201 - ECONOMIC SUBSTANCE TEST BURDEN OF PROOF

Current through Register Vol. 39, No. 2, July 15, 2024
The taxpayer has the burden of proving that a transaction meets both
													 prongs of the economic substance test as specified in
													 G.S.
													 105-130.5A(g).
Authority
													 G.S.
													 105-130.5A;
													 105-262.1;
Eff. January 31, 2013;
Pursuant to G.S.
													 150B-21.3A, rule is necessary without substantive public interest Eff.
													 August 19, 2017.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter F - SECRETARY'S AUTHORITY TO ADJUST NET INCOME OR TO REQUIRE A COMBINED RETURN › Section .0200 - ECONOMIC SUBSTANCE › Section 05F .0202 - REASONABLE BUSINESS PURPOSES

Current through Register Vol. 39, No. 2, July 15, 2024
(a) In proving that a transaction, or series of
											  transactions of which the transaction is a part, has one or more reasonable business purposes other than the
											  creation of State income tax benefits, the taxpayer must show:
(1) The
											  business purpose asserted was valid and realistic;
(2) The
											  transaction was a reasonable and realistic means to accomplish the asserted business purpose;
(3) Evidence exists that shows the taxpayer took steps to achieve the
											  asserted business purpose; and
(4) The value of the non-State
											  income tax benefits reasonably anticipated by the taxpayer from the transaction exceeds the additional cost
											  associated with the transaction.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter F - SECRETARY'S AUTHORITY TO ADJUST NET INCOME OR TO REQUIRE A COMBINED RETURN › Section .0200 - ECONOMIC SUBSTANCE › Section 05F .0203 - ECONOMIC EFFECTS

Current through Register Vol. 39, No. 2, July 15, 2024
(a) In proving that a transaction, or series of
											  transactions of which the transaction is a part, has economic effects beyond the creation of State income tax
											  benefits, the taxpayer must show by objective evidence that a reasonable likelihood of material benefit,
											  other than State income tax benefits, from the transaction existed at the time the transaction was initiated
											  and there was a material benefit to the transaction apart from State income tax benefits.
(b) In analyzing whether a transaction has an economic effect, the
											  Secretary shall analyze the economic effect on the taxpayer and on the aggregate economic effect on the
											  parties to the transaction.
Authority
													 G.S.
													 105-130.5A;
													 105-262.1;
Eff. January 31, 2013;
Pursuant to G.S.
													 150B-21.3A, rule is necessary without substantive public interest Eff.
													 August 19, 2017.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter F - SECRETARY'S AUTHORITY TO ADJUST NET INCOME OR TO REQUIRE A COMBINED RETURN › Section .0200 - ECONOMIC SUBSTANCE › Section 05F .0204 - ECONOMIC SUBSTANCE DOCTRINE

Current through Register Vol. 39, No. 2, July 15, 2024
The Secretary shall rely on general principles of the common law
													 economic substance doctrine as established under federal and state case law in applying each prong of the two
													 pronged test under G.S.
													 105-130.5A(g), except where case law conflicts with the
													 statute. General principles of the economic substance doctrine include the following:
(1) Economic substance is a prerequisite to any provision allowing
											  deductions;
(2) A taxpayer has the burden of proving that a
											  transaction has both purpose and substance;
(3) A taxpayer has
											  the burden of showing that the form of the transaction accurately reflects its substance and that deductions
											  claimed are permissible;
(4) The economic substance of a
											  transaction shall be determined based on documentation and data rather than the subjective opinions of the
											  taxpayer; and
(5) The transactions, not the entities, shall be
											  examined for economic substance.
Authority
													 G.S.
													 105-130.5A;
													 105-262.1;
Eff. January 31, 2013;
Pursuant to G.S.
													 150B-21.3A, rule is necessary without substantive public interest Eff.
													 August 19, 2017.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter F - SECRETARY'S AUTHORITY TO ADJUST NET INCOME OR TO REQUIRE A COMBINED RETURN › Section .0200 - ECONOMIC SUBSTANCE › Section 05F .0205 - ECONOMIC SUBSTANCE FACTORS

Current through Register Vol. 39, No. 2, July 15, 2024
Determining whether or not a transaction has economic substance is a
													 fact-intensive inquiry that is dependent upon the facts and circumstances of each transaction made by a
													 taxpayer. The Secretary shall consider or analyze all the facts and circumstances including the
													 following:
(1) The reasons for the transaction;
(2) Whether the transaction was a reasonable means to accomplish the
											  asserted purposes;
(3) Expectations of benefits obtained from the
											  transactions;
(4) The effects the transaction had on the
											  taxpayer's profits;
(5) The existence of a reasonable or
											  realistic potential for profit from making the transaction;
(6)
											  The objective economic impact of the transaction other than State income tax savings;
(7) The transaction's effect on the taxpayer's State income tax
											  liability;
(8) The transaction's effect on the taxpayer's tax
											  liability in other states;
(9) The transaction's effect on the
											  taxpayer's federal tax liability;
(10) Whether the method of
											  determining the amount of payment is an industry practice;
(11)
											  The change in the business operations of the parties, if any, after the transaction;
(12) Whether assets were transferred between or among related
											  parties;
(13) Whether the business operations related to specific
											  assets changed after any transfer of those assets;
(14) Whether
											  the entity transferring assets retained control over the assets;
(15) The tax consequences of the transfer of assets;
(16) The party or parties who created or developed the ideas which led to
											  the transaction;
(17) The party or parties who presented the
											  ideas concerning the transaction to the taxpayer;
(18) Whether
											  the contemporaneous documentation explaining the transaction to the taxpayer discussed profit potential in
											  addition to tax benefits;
(19) The party or parties that drafted
											  the agreements relating to the transaction;
(20) The party or
											  parties that negotiated the agreements relating to the transaction;
(21) The party or parties that dictated the terms of the agreements
											  relating to the transaction;
(22) Cost-benefit analyses or other
											  studies conducted related to the transaction;
(23) Non-tax
											  benefits obtained by the taxpayer as a result of the transaction; and
(24) Whether the intercompany transaction resulted in a circular cash
											  flow.
Authority
													 G.S.
													 105-130.5A;
													 105-262.1;
Eff. January 31, 2013;
Pursuant to G.S.
													 150B-21.3A, rule is necessary without substantive public interest Eff.
													 August 19, 2017.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter F - SECRETARY'S AUTHORITY TO ADJUST NET INCOME OR TO REQUIRE A COMBINED RETURN › Section .0200 - ECONOMIC SUBSTANCE › Section 05F .0206 - WHEN STATE INCOME TAX BENEFITS ARE CONSIDERED

Current through Register Vol. 39, No. 2, July 15, 2024
(a) State income tax benefits
											  resulting from a transaction are considered by the Secretary in determining whether a transaction has
											  reasonable business purposes and economic substance when the State income tax benefits are consistent with
											  legislative intent, such as when the transaction is made in accordance with laws enacted by the General
											  Assembly to encourage engagement in certain types of activities through tax deductions or tax
											  credits.
(b) When a transaction that generates targeted tax
											  incentives is, in form and substance, consistent with the State income tax benefits designed by the General
											  Assembly, the State income tax benefits shall be considered by the Secretary in determining whether the
											  transaction has reasonable business purposes and economic substance.
Authority
													 G.S.
													 105-130.5A;
													 105-262.1;
Eff. January 31, 2013;
Pursuant to G.S.
													 150B-21.3A, rule is necessary without substantive public interest Eff.
													 August 19, 2017.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter F - SECRETARY'S AUTHORITY TO ADJUST NET INCOME OR TO REQUIRE A COMBINED RETURN › Section .0200 - ECONOMIC SUBSTANCE › Section 05F .0207 - CENTRALIZED CASH MANAGEMENT

Current through Register Vol. 39, No. 2, July 15, 2024
Although the existence of a centralized cash management system among
													 members of an affiliated group is not conclusive evidence that a transaction lacks economic substance, the
													 Secretary shall analyze the transactions for reasonable business purposes and economic effects. If the cash
													 management transaction, or series of transactions of which the transaction is a part, results in the creation
													 of unreasonably excessive interest expense when compared to industry practice, shifting of assets, or the
													 reclassification of income as nonapportionable or nonallocable, the transaction may be deemed to lack
													 economic substance.
Authority
													 G.S.
													 105-130.5A;
													 105-262.1;
Eff. January 31, 2013;
Pursuant to G.S.
													 150B-21.3A, rule is necessary without substantive public interest Eff.
													 August 19, 2017.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter F - SECRETARY'S AUTHORITY TO ADJUST NET INCOME OR TO REQUIRE A COMBINED RETURN › Section .0300 - FAIR MARKET VALUE › Section 05F .0301 - DETERMINATION OF FAIR MARKET VALUE

Current through Register Vol. 39, No. 2, July 15, 2024
(a) For purposes of determining whether or not transactions between members
											  of an affiliated group were made at fair market value under the standards contained in the regulations
											  adopted under section 482 of the Internal Revenue Code pursuant to
											  G.S.
											  105-130.5A(h), the Secretary shall consider all facts and
											  circumstances relative to the transactions, including any transfer pricing studies provided by the
											  taxpayer.
(b) In determining whether or not transactions were
											  made at fair market value, the Secretary will also apply any federal or state case law developed under
											  section 482 of the Internal Revenue Code and its regulations.
(c)
											  The fact that a taxpayer has a transfer pricing study will not in and of itself be sufficient to establish
											  that a transaction was made at fair market value.
Authority
													 G.S.
													 105-130.5A;
													 105-262.1;
Eff. January 31, 2013;
Pursuant to G.S.
													 150B-21.3A, rule is necessary without substantive public interest Eff.
													 August 19, 2017.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter F - SECRETARY'S AUTHORITY TO ADJUST NET INCOME OR TO REQUIRE A COMBINED RETURN › Section .0400 - ADJUSTMENTS › Section 05F .0401 - ADJUSTMENTS TO STATE NET INCOME

Current through Register Vol. 39, No. 2, July 15, 2024
Adjustments the Secretary may make to intercompany transactions that
													 are found to lack economic substance or not to be at fair market value include the following:
(1) Disallowing deductions in whole or in part;
(2) Attributing income to related corporations;
(3) Disregarding transactions; and
(4) Reclassifying income as apportionable or allocable.
Authority
													 G.S.
													 105-130.5A;
													 105-262.1;
Eff. January 31, 2013;
Pursuant to G.S.
													 150B-21.3A, rule is necessary without substantive public interest Eff.
													 August 19, 2017.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter F - SECRETARY'S AUTHORITY TO ADJUST NET INCOME OR TO REQUIRE A COMBINED RETURN › Section .0500 - COMBINED RETURNS › Section 05F .0502 - PROCEDURES FOR FILING A COMBINED INCOME TAX RETURN

Current through Register Vol. 39, No. 2, July 15, 2024
(a) The principal member shall file
											  Form CD-405, The North Carolina C Corporation Tax Return, and all required schedules. The combined tax return
											  replaces the separate entity corporate income tax returns filed by the members of the group that are doing
											  business in this State.
(b) The principal member shall include
											  the following schedules:
(1) A computation of the North Carolina taxable
											  income of each corporation in the combined return that would have been reported if the member had filed a
											  North Carolina income tax return on a separate company basis;
(2)
											  A schedule detailing all intercompany eliminations made by and between the members of the unitary
											  group;
(3) A schedule of all North Carolina income tax estimated
											  payments made by each member of the group;
(4) A schedule
											  reflecting the computation of the combined apportionment factor as required in
											  17 NCAC 05F
											  .0501(6). Taxpayers shall not use Schedule O of the
											  CD-405;
(5) A schedule of eligible net economic losses and the
											  use of same by member entities and the combined group; and
(6) A
											  schedule of eligible tax credits and the use of same by member entities and the combined group.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter F - SECRETARY'S AUTHORITY TO ADJUST NET INCOME OR TO REQUIRE A COMBINED RETURN › Section .0500 - COMBINED RETURNS › Section 05F .0503 - COMBINED RETURN TAX CREDITS

Current through Register Vol. 39, No. 2, July 15, 2024
(a) Any member of the combined group that has
											  activities that qualify for a North Carolina income tax credit shall provide all required information to
											  determine and support the amount of the credit on a separate company basis. This information shall be
											  included with the combined return in each year the qualifying member becomes eligible to claim a credit or an
											  installment of a credit, even if the group's income tax liability for that tax year is not sufficient for the
											  combined group to benefit from the income tax credit.
(b)
											  Combined groups eligible to claim income tax credits shall complete Form CD-425, Corporate Tax Credit
											  Summary, on a combined basis and file it with the group's income tax return. If a member of the combined
											  group is eligible to claim an income tax credit limited by statute to 50 percent of tax, the combined group
											  shall also complete Form NC-478, Summary of Tax Credits Limited to 50 Percent of Tax.
Authority
													 G.S.
													 105-130.5A;
													 105-262.1;
Eff. January 31, 2013;
Pursuant to G.S.
													 150B-21.3A, rule is necessary without substantive public interest Eff.
													 August 19, 2017.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter F - SECRETARY'S AUTHORITY TO ADJUST NET INCOME OR TO REQUIRE A COMBINED RETURN › Section .0600 - FRANCHISE TAX RETURN › Section 05F .0601 - PROCEDURES FOR FILING A FRANCHISE TAX RETURN

Current through Register Vol. 39, No. 2, July 15, 2024
(a) The provisions of this Rule apply unless
											  the Secretary authorizes a combined group to file a combined franchise tax return under
											  G.S.
											  105-122. Each corporation that is doing business in this State pursuant to
											  G.S.
											  105-114(b)(3) shall file a separate North Carolina
											  franchise tax return and pay any franchise tax due. Any corporation that is included in a combined income tax
											  return but that is not doing business in this State pursuant to
											  G.S.
											  105-114(b)(3) is not subject to North Carolina franchise
											  tax.
(b) The principal member shall file its franchise tax return
											  on the combined group's CD-405.
(c) All other members' separate
											  returns shall include zero dollars ($0) on the "Net Taxable Income" and "NC Net Income Tax" lines on the
											  CD-405 and include a statement with the return that:
(1) Indicates its
											  income is included in the combined income tax return filed by the principal member; and
(2) Identifies the name and Federal Employer Identification Number of the
											  principal member.
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter G - MARKET-BASED SOURCING FOR APPORTIONMENT OF INCOME › Section .0100 - GENERAL RULES › Section 05G .0101 - SCOPE

Current through Register Vol. 39, No. 2, July 15, 2024
The rules in this Subchapter shall not apply to receipts from the
													 sale of tangible personal property. Other receipts are in North Carolina when the taxpayer's market for the
													 sales is in North Carolina. The rules of this Subchapter establish uniform rules for:
(1) determining to what extent the market for a sale is in North
											  Carolina;
(2) reasonably approximating the state or states of
											  assignment where the state or states cannot be determined;
(3)
											  excluding receipts from the sale of intangible property from the numerator and denominator of the sales
											  factor pursuant to G.S.
											  105-130.4(l); and
(4) excluding receipts from the denominator of the sales factor where the
											  state or states of assignment cannot be determined or reasonably approximated.
Authority
													 G.S.
													 105-130.4; S.L. 2016-94;
Eff. January 1, 2020 (See S.L.
													 2019-246, s. 3).
North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter G - MARKET-BASED SOURCING FOR APPORTIONMENT OF INCOME › Section .0100 - GENERAL RULES › Section 05G .0102 - DEFINITIONS

Current through Register Vol. 39, No. 2, July 15, 2024
In addition to the definitions in
													 G.S.
													 105-130.4, as used in this Subchapter, the following definitions shall
													 apply:
(1) "Billing address" means the location stated in the books
											  and records of the taxpayer as the primary mailing address relating to a customer's account as of the time of
											  the transaction as kept in good faith in the regular course of business and not for tax avoidance
											  purposes.
(2) "Business customer" means a customer that is a
											  business operating in any form, including a sole proprietorship. Sales to a non-profit organization; a trust;
											  the U.S. Government; a foreign, state or local government; or to an agency or instrumentality of that
											  government are treated as sales to a business customer.
(3)
											  "Code" means as defined in G.S.
											  105-228.90.
(4) "Department"
											  means the North Carolina Department of Revenue.
(5) "Good faith"
											  means a state of mind consisting in honesty in belief or purpose, faithfulness to one's duty or obligation,
											  observance of reasonable commercial standards of fair dealing in a given trade or business, or absence of
											  intent to defraud or to seek unconscionable advantage.
(6)
											  "Individual customer" means a customer that is not a business customer.
(7) "Intangible property" means property that is not physical or whose
											  representation by physical means is incidental and includes:
(a)
											  copyrights;
(b) patents;
(c) trademarks;
(d) trade
											  names;
(e) brand names;
(f) franchises;
(g)
											  licenses;
(h) trade secrets;
(i) trade dress;
(j)
											  information;
(k) know-how;
(l) methods;
(m)
											  programs;
(n) procedures;
(o) systems;
(p)
											  formulae;
(q) processes;
(r) technical data;
(s)
											  designs;
(t) literary,
(u) musical, or artistic compositions;
(v) information;
(w)
											  ideas;
(x) contract rights including broadcast rights;
(y) agreements not to compete;
(z) goodwill and going concern value;
(aa) securities; and
(bb)
											  except as otherwise provided in these Rules, computer software.