Corporations Required to Allocate Income
A corporation taxable both within and without North Carolina is
required to use the allocation and apportionment provisions of
G.S. 105-130.4 in reporting its net income or net loss to North Carolina.
For purposes of allocation and apportionment, a corporation is taxable
in another state if (1) the corporation's business activity in
that state subjects it to a net income tax or a tax measured by net income,
or (2) that state has jurisdiction based on the corporation's business
activity in that state to subject the corporation to a tax measured
by net income regardless of whether that state exercises its jurisdiction.
"Business activity" includes any activity by a corporation
that would establish a taxable nexus pursuant to 15 United States
Code, Section 381 (P.L. 86-272). The filing of a unitary-combined
return in another state with other related corporations does not,
by itself, constitute "business activity" for purposes
of determining if a corporation subject to income tax in this
state is allowed to allocate and apportion income.
Last modified on:
02/04/08 10:11:58 AM.