North Carolina business tax reform | KPMG | GLOBAL

North Carolina: “Contingent” business tax reform is enacted

Business tax reform, North Carolina

In North Carolina, the governor on September 18, 2015, signed House Bill 97—the long-delayed budget bill—that includes tax reform measures affecting business taxpayers. In general, assuming companion legislation is enacted, the measures are effective January 1, 2016. Hence, these provisions are “contingent.”


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Among the changes affecting business taxpayers are measures providing for:

  • A corporate income tax rate reduction to 3% if a threshold amount in the “general fund” is satisfied by taxes collected for the preceding fiscal year
  • A phase-in of the single sales factor apportionment over a three-year period
  • A required study of market-based sourcing and information reporting by certain taxpayers 
  • Related member interest disallowance rules 
  • Changes to the adjustments to federal taxable income
  • Franchise tax base changes
  • Repeal of the bank privilege tax 
  • Sales tax base expansion and other related measures  
  • A historic preservation tax credit

Read a September 2015 report [PDF 83 KB] prepared by KPMG LLP: Contingent North Carolina Tax Reform Enacted


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