GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1997

H	1 

HOUSE BILL 326

Short Title:  Subsidiary Dividend Deduction.	(Public)

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Sponsors: Representatives Gamble; and Luebke.

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Referred to:  Finance.

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February 26, 1997

A BILL TO BE ENTITLED
AN ACT TO PROVIDE A UNIFORM RULE FOR PARENT CORPORATIONS TO NET RELATED EXPENSES BEFORE DEDUCTING OR EXCLUDING SUBSIDIARY DIVIDENDS.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 105-130.7(4) reads as rewritten:
"(4)	A corporation may deduct all dividends, less related expenses, received from corporations in which it owns more than fifty percent (50%) of the outstanding voting stock. The amount of direct or indirect expenses related to dividends deductible under this subdivision is presumed to be fifteen percent (15%) of the amount of the dividends, not to exceed the taxpayer's total expenses.  A taxpayer who claims related expenses less than the presumed amount must maintain and make available for inspection by the Secretary all records necessary to determine and verify the amount claimed."
Section 2.  This act is effective for taxable years beginning on or after January 1, 1998.