NC General Assembly Enacts NCACPA’s Proposed Changes to SB 628

The General Assembly reconvened on August 3 for a one-day session to consider veto overrides and adopt conference reports. During the session, the House and the Senate voted to adopt the conference report for SB 628, Various Changes to Revenue Laws, which makes numerous technical changes to the North Carolina tax code. NCACPA was highly involved in the drafting of this legislation and worked very closely with the bill sponsors during the regular session and the conferees throughout the recess to ensure the final language included provisions supported by our members. The bill now heads to the Governor’s desk for him to sign, veto, or allow to become law without his signature.

NCACPA CEO Sharon Bryson discusses the provisions supported by the association that were included in the final version of the bill:

Income Tax Extension Study
Our members proposed the elimination of the State’s requirement to file a request for an extension of time for filing income tax returns. The General Assembly has directed the NC Department of Revenue (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.” The NCDOR must work with the IRS and consult with other states in compiling the study, and report its findings and any recommendations to the General Assembly on or before January 1, 2018 for the potential elimination of the state filing extension for corporate franchise and other income tax returns beginning January 1, 2019, for the tax year 2018.

RMI Changes
Thanks to the hard work of our Tax Modernization Task Force, the bill contains provisions that clarify recent changes to the sales tax laws related to RMI services. Our task force provided the language found in the bill with recommended changes to the sales taxation of RMI services.

Franchise Tax Base Calculation
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 was corrected in the legislation.
“I am extremely pleased with the accomplishments achieved in this session of the General Assembly, and would like to extend my sincere gratitude for your constant support. Your suggestions, feedback, and grassroots efforts helped shape our legislative agenda and allowed us to advise the General Assembly on important issues that impact members. We will build on this success and further nurture relationships with legislators to ensure NCACPA continues to be recognized as a trusted resource. Thank you!”

-Sharon Bryson, CEO