GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1997

H	1 

HOUSE BILL 19

Short Title:  Expand Corporate Charitable Deduction. 	(Public)

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Sponsors: Representatives McMahan; Baker, Cansler, Davis, Dockham, Gardner, Grady, Hall, Hardy, Miner, Morris, Preston, Rayfield, Russell, Sherrill, Shubert, Starnes, Thompson, and Watson.

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Referred to:  Finance.

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February 3, 1997

A BILL TO BE ENTITLED
AN ACT TO INCREASE GIVING TO CHARITABLE NONPROFIT ORGANIZATIONS BY EXPANDING THE STATE CORPORATE INCOME TAX DEDUCTION FOR CHARITABLE CONTRIBUTIONS.
The General Assembly of North Carolina enacts:
Section 1.  G. S. 105-130.9 reads as rewritten:
"§ 105-130.9.  Contributions.
 (a) North Carolina Corporations. – Corporations that do not allocate a part of their total net income outside this State may deduct the following contributions to the extent allowed in this section:
(1)	Most Charitable Contributions. – Charitable contributions as defined in section 170(c) of the Code, other than contributions allowed in subdivision (2) of this section, up to a maximum deduction of ten percent (10%) of the corporation's net income as computed without the benefit of this subdivision or subdivision (2) of this section. 
(2)	Contributions to North Carolina Governments and Educational Institutions. – Contributions to the following entities: the State of North Carolina, any of its institutions, instrumentalities, or agencies, any county of this State, its institutions, instrumentalities, or agencies, any municipality of this State, its institutions, instrumentalities, or agencies, and any educational institutions located within North Carolina, no part of the net earnings of which inures to the benefit of any private stockholders or dividend.  For the purpose of this subdivision, the term ‘educational institution' includes only an educational institution that normally maintains a regular faculty and curriculum and normally has a regularly organized body of students in attendance at the place where the educational activities are carried on. The term includes all of the institution's departments, schools, and colleges, a group of educational institutions, and an organization organized and operated exclusively to receive, hold, invest, and administer property and to make expenditures to or for the sole benefit of an educational institution.
(b)	Interstate Corporations. – Corporations allocating a part of their total net income outside North Carolina under G.S. 105-130.4 may deduct from total income allocable to North Carolina contributions made to North Carolina donees qualified under subdivision (1) or (2) of subsection (a) of this section or made through North Carolina offices or branches of other donees qualified under those subdivisions.  The deduction for contributions made to North Carolina donees qualified under subdivision (1) of this section may not exceed ten percent (10%) of the total income allocated to North Carolina as computed without the benefit of this subsection.
Corporations allocating a part of their total net income outside North Carolina may deduct from net income before allocation under G.S. 105-130.4 contributions made to other donees qualified under subdivision (1) of subsection (a) of this section.  This deduction may not exceed ten percent (10%) of the corporation's net income before allocation under G.S. 105-130.4, as computed without the benefit of this subsection.
(c)	Carryforward. – If a corporation's deductions allowed under subdivision (a)(1) or subsection (b) of this section exceed the applicable percentage limitation, the corporation may carry the excess forward for the succeeding five years to the extent the amounts carried forward under this subsection plus the amounts deductible under subdivision (a)(1) or subsection (b) of this section for each taxable year do not exceed the percentage limitation for that taxable year.  Amounts deductible under subdivision (a)(1) or subsection (b) of this section for the current taxable year shall be taken into account before amounts carried forward under this subsection.
	(d)	Double Benefit Disallowed. – The amount of a contribution for which the taxpayer claimed a tax credit pursuant to G.S. 105-130.34 shall not be eligible for a deduction under this section. The amount of the credit claimed with respect to the contribution is not, however, required to be added to income under G.S. 105-130.5(a)(10)."
Section 2.  G.S. 105-130.5(b)(5) reads as rewritten:
"(5)	Contributions or gifts made by any corporation to the extent provided under G.S. 105-130.9."
Section 3.  This act is effective for taxable years beginning on or after January 1, 1998.