GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1997

H	2 

HOUSE BILL 1157
Senate Finance Committee Substitute Adopted 7/10/97

Short Title:  Various Corporate Tax Law Changes.	(Public)

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Sponsors:

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Referred to:

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April 24, 1997

A BILL TO BE ENTITLED
AN ACT TO CLARIFY THE CORPORATE INCOME TAX ON CERTAIN TAX-EXEMPT OBLIGATIONS AND TO DELETE THE CAP ON CORPORATE INCOME TAX DEDUCTIONS OF DIVIDENDS RECEIVED FROM REGULATED INVESTMENT COMPANIES.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 105-130.5(b) is amended by adding a new subdivision to read:
"(1a)	Interest upon the obligations of any of the following, net of related expenses, to the extent included in federal taxable income:
a.	This State, a political subdivision of this State, or a commission, an authority, or another agency of this State or of a political subdivision of this State.
b.	A nonprofit educational institution organized or chartered under the laws of this State."
Section 2.  G.S. 105-130.7 reads as rewritten:
"§ 105-130.7.  Deductible portion of dividends.
(a)	Regulated Investment Companies. – A corporation may deduct the proportionate part of dividends received by it from a regulated investment company or a real estate investment trust, as defined in G.S. 105-130.12, as represents and corresponds to income received by the regulated investment company or real estate investment trust that would not be taxed by this State if received directly by the corporation.
(b)	Subsidiary Dividends. – A corporation that, at the close of its taxable year, has its commercial domicile within North Carolina may deduct all dividends received from corporations in which it owns more than fifty percent (50%) of the outstanding voting stock.
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Section 3.  This act is effective for taxable years beginning on or after January 1, 1997.