GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1997

S	3 

SENATE BILL 841
Finance Committee Substitute Adopted 8/4/97
Third Edition Engrossed 8/18/97

Short Title:  Modify Corporate Dividend Taxation.	(Public)

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April 15, 1997

A BILL TO BE ENTITLED
AN ACT TO ALLOW FOREIGN CORPORATIONS TO DEDUCT EXPENSES RELATED TO DEDUCTIBLE SUBSIDIARY DIVIDENDS TO THE SAME EXTENT AS NORTH CAROLINA CORPORATIONS AND TO CLARIFY THE TREATMENT OF DIVIDENDS AS BUSINESS OR NONBUSINESS INCOME.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 105-130.7(b), as amended by House Bill 1157, 1997 General Assembly, reads as rewritten:
"(b)	Subsidiary Dividends. – A corporation may deduct all dividends received from corporations in which it owns more than fifty percent (50%) of the outstanding voting stock."
Section 2.  G.S. 105-130.4(a)(1) reads as rewritten:
"(1)	'Business income' means income arising from transactions and activity in the regular course of the corporation's trade or business and includes income from tangible and intangible property if the acquisition, management, or disposition of the property constitutes an integral part of the corporation's regular trade or business operations.  Dividend income, like other income from intangible property, is business income if it meets the requirements of this definition."
Section 3.  This act is effective for taxable years beginning on or after January 1, 1997.