Establishes that market based sourcing will be used for multistate income tax apportionment.

Amends GS 105-130.4, Allocation and apportionment of income for corporations, by eliminating subsubsections (l)(2) and (l)(3), leaving only the sales factor (was, (l)(1)) under subsection (l).  Establishes that recipients are in this state if the taxpayer’s market for the receipts is in this state, and if the market for a receipt cannot be determined, the state or states of assignment are to be reasonably approximated. Provides that when a taxpayer cannot ascertain the state to which the receipts are to be assigned using reasonable approximation, then the receipts must be excluded from the denominator of the sales factor. Provides six criteria, GS 105-130.4(l)(1) through (6), to determine a taxpayer’s market for receipts in this state. Adds and defines broadcasters and banks. 

Enacts new GS 105-130.4A, Market based sourcing for broadcasters. Sets out and defines terms for use in the statute. Provides that if the audience factor for a receipt cannot be determined, the state or states of assignment are to be reasonably approximated. Audience factor is defined in the act as the factor determined by the ratio specified in the statute for television stations, radio stations, and cable or satellite program and channel broadcasts. Provides that when a taxpayer is delivering advertising or licensed content directly or indirectly to a known list of subscribers, the taxpayer must reasonably approximate the receipts attributable to this state's market using a percentage that reflects the ratio of North Carolina subscribers to the total number of subscribers; if the taxpayer is delivering that content through an intermediary and does not have access to the list of subscribers, the taxpayer must reasonably approximate the receipts attributable to this state's market using a percentage that reflects the ratio of the North Carolina population to the total population in the specific geographic area where the advertisement or licensed content is materially used. Sets out provisions concerning when material is used in a foreign country. Allows the Department of Revenue to authorize an alternate approach that reflects an attempt to obtain the most accurate assignment of receipts when the specified rules of reasonable approximation fail to reasonably approximate the percentage of receipts attributable to this state's market. Specifies that the a broadcaster's receipts factor is a fraction, the numerator of which is the sum of the broadcaster's gross receipts from sources within the state and the denominator of which is the sum of the broadcaster's gross receipts from transactions and activity in the regular course of its trade or business everywhere. Specifies how advertising gross receipts and license fees for audio or video programming in release, and gross receipts from subscriber fees, rents, sales, or similar charges from audio or video programming in release, are to be attributed. 

Enacts new GS 105-130.4B, Market based sourcing for banks.  Establishes GS 105-130.4A(a) that provides definitions that apply to the new statute. Creates a general rule that states the receipts factor of a bank is a fraction, with the numerator being the total receipts of the taxpayer in this state during the income year and the denominator being the total receipts of the taxpayer everywhere during the income year, and lists five receipts that are excluded from both the numerator and denominator of the receipts factor. Sets out provisions for calculations concerning: (1) receipts from the sale, lease, or rental of real property; (2) receipts from the sale, lease, or rental of tangible personal property; (3) interest, fees, and penalties from loans secured by real property; (4) interest, fees, and penalties from loans not secured by real property; (5) net gains from the sale of loans; (6) receipts from interest, fees, and penalties from card holders; (7) net gains from the sale of credit card receivables; and (8) miscellaneous receipts.

The above provisions are effective for taxable years beginning on or after January 1, 2018.

Enacts new GS 105-262.2, Rules to implement market based sourcing.  Establishes that it is the policy of the state to provide necessary guidance on a timely basis to corporate taxpayers subject to allocation and apportionment of income under GS 105-130.4, and that the expedited procedure for the adoption of rules under GS 105-262.1, which sets out rules to exercise authority under GS 105-130.5A (which discusses Secretary’s authority to adjust net income or require a combined return) apply to the adoption of rules needed to administer market based sourcing of receipts.  Directs that the Office of State Budget and Management is not required to prepare a fiscal note for a proposed rule under this new statute, and that the Secretary of Revenue is not subject to the fiscal note requirement under GS 105-262(c) or GS 105-262.1(c).

Requires the Utilities Commission (Commission) to adjust the rates for public utilities, excluding water public utilities with less than $200,000 in annual operating revenues, for the tax changes in Section 1 of this act (which amends GS 105-130.4). Requires each utility to calculate the cumulative net effect of the tax changes and file the calculations with proposed rate changes to reflect the net prospective tax changes in utility customer rates within 60 days of the enactment of this act. Requires any adjustments that are required to existing tax assets or liabilities to be reflected in the utility's books and records by the tax changes are to be deferred and reflected in customer rates in either the utility's next rate case or earlier if deemed appropriate by the Commission.