After a week of late night sessions and committee meetings with little notice, the General Assembly has adjourned until August 3. Substantial progress was made on SB628 this session. The bill passed both houses and was assigned to a conference committee to work out the differences between the House and Senate versions of the bill. Unfortunately, the conference committee could not agree on the resolution prior to the adjournment at 2:00 this morning. However, the good news is that those differences are likely to be resolved prior to the August 3 session at which time we fully expect SB628 to be passed and signed by the Governor.
NCACPA encourages you to review section 1.14 of the bill, which is an amendment offered by Rep. Jason Saine. It directs the NCDOR to conduct a feasibility and cost study of “allowing the pass-through of a federal extension of time for filing a federal income tax return to serve as an application for a State extension of time for filing a corporate franchise and other income tax returns.”
NCACPA recommended the amendment language. In March, our Association met with Representative Saine about changing the law to accept a federal extension filing as a valid North Carolina tax return extension. NCACPA member John Broadfoot, of Thomas Judy & Tucker, PA, attended the meeting and helped illustrate the burden that the current requirement places on tax professionals during their busiest time of year. We also worked with the Department of Revenue to discuss how eliminating this filing requirement would eventually create efficiencies for both the DOR and CPAs. It was a series of meetings, phone calls, and emails with legislators and the DOR that ultimately brought about the feasibility study referenced above.
Also, in meetings with legislators, NCACPA brought attention to an issue with GS 105-122(d) regarding how a corporation’s franchise tax base was calculated. The Association pointed out that indebtedness related to real estate no longer reduced the taxable base for franchise tax purposes and that this drastically increased the tax for many NC corporations. This was an unintended change in 2015 that is now being corrected.
Again, we expect to have good news to share regarding SB628 soon after the return of the General Assembly on August 3.