Tax Law Changes - North Carolina Department Of Revenue - 2012 Page 13
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SECTION
CORPORATE TAX
FRANCHISE TAX
G.S. 105-120.2(c) – Clarifying Change; Definition of Holding Company: A holding
company is a corporation that receives during its taxable year more than 80% of its
gross income from corporations in which it owns directly or indirectly more than 50% of
the outstanding voting stock or voting capital interests. In performing the holding
company test, if the holding company receives no income during the year, the
denominator of the ratio is zero, which is mathematically undefined. Therefore, the
corporation technically does not meet the 80% test. To provide a remedy for this
scenario, the subsection was amended to add a second condition under which a
corporation may qualify as a holding company. A corporation will also qualify for
holding company status if it has no assets other than ownership interests in
corporations in which it owns, directly or indirectly, more than 50% of the outstanding
stock or voting capital interests.
(Effective June 26, 2012, SB 826, s. 2.3, S.L. 12-79.)
G.S. 105-122(b1) – Conforming Change; Definitions: This subsection was amended
to replace references to G.S. 105-130.6 with G.S. 105-130.2. The definitions of the
terms “affiliate”, “parent” and “subsidiary”, previously codified under G.S. 105-130.6,
which was repealed by S.L. 11-390, were re-codified under G.S. 105-130.2.
(Effective June 26, 2012, SB 826, s. 1.14.(a), S.L. 12-79.)
BUSINESS AND ENERGY TAX CREDITS
G.S. 105-129.16D(d) – Extend Sunset for Credit for Constructing Renewable Fuel
Facilities: This subsection was amended to extend the sunset date for the credit for
constructing renewable fuel facilities to January 1, 2014. The sunset date had been
January 1, 2013.
(Effective June 20, 2012, HB 1025, s. 2, S.L. 12-36.)
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