Senate Bill 557—Various Finance Law Changes

Historically, the North Carolina Department of Revenue has been unable to track or maintain a record of valid POAs filed by taxpayers, causing the Department to often communicate with taxpayers directly, instead of their representatives. This has led to advocates not receiving important documents. The Association worked diligently with the legislature and Department to support updating internal systems and processes in order to resolve the issue. On November 8, 2019, the North Carolina General Assembly passed Senate Bill 557, which included a provision stipulating the Department of Revenue report to the Joint Legislative Oversight Committee on General Government on its progress in updating its electronic tax systems to store and recognize POA registrations by January 31, 2020.

Additionally, NCACPA championed the adoption of market-based sourcing for multi-state taxpayers in allocating income tax on services and intangibles, which is necessary to allow North Carolina to remain competitive in attracting infrastructure and employer investments in the state. On November 8, 2019, the NC General Assembly enacted market-based sourcing for apportioning the corporate income tax and the franchise tax net worth base, effective for taxable years beginning on or after January 1, 2020. Under the new market-based sourcing rules, receipts from intangibles will be sourced based on where the intangible is used. Special market-based sourcing rules are provided for broadcasters, banks, natural gas pipeline companies, and electric power companies.

November 2019