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.

Property Factor

Payroll Factor

Sales Factor