Amends GS 105-130.6, clarifying that if the Secretary of Revenue finds that a corporation’s report of net income does not disclose the corporation’s true earnings in NC, due to payments to or charges by the parent, subsidiary, or affiliated corporation in excess of fair market value in intercompany transactions, then the Secretary may require the corporation to file a consolidated return of all operations of the parent corporation and all subsidiaries and affiliates, which eliminates those payments or charges. Clarifies that the Secretary’s findings and conclusions, relating to determinations of income earned by a corporation, are presumed correct (currently, are presumed correct and will not be set aside unless shown to be plainly wrong).
Further amends GS 105-130.6, as amended by this act, allowing any parent, subsidiary, or affiliated corporation to elect to file a consolidated return of all operations of the parent corporation and all subsidiaries and affiliates, as specified. Provides that the return will be adjusted only if the Secretary determines that the return does not disclose the corporation’s true earnings in the state due to payments to or charges by the parent, subsidiary, or affiliated corporation in excess of fair market value in intercompany transactions. Effective for taxable years beginning on or after January 1, 2012.
Directs the Secretary to propose rules specifying facts and circumstances under which the Secretary will require a corporation to file a consolidated or combined return, before September 1, 2011.
Unless otherwise indicated, the act is effective when it becomes law, and applies to current contested administrative law cases without a final decision.