NORTH CAROLINA GENERAL ASSEMBLY

1963 SESSION

 

 

CHAPTER 1186

HOUSE BILL 1202

 

 

AN ACT TO AMEND G.S. 105-134 RELATIVE TO CORPORATION INCOME TAX TREATMENT OF INTEREST, DIVIDENDS AND ROYALTIES.

 

The General Assembly of North Carolina do enact:

 

Section 1.  G.S. 105-134 is hereby amended by changing the number of the subparagraph now designated as subparagraph "(2)", on line 33 of the second paragraph of said Section, to "(2)a", and by adding a new subparagraph, to be designated "(2)b", immediately following subparagraph "(2)a", to read as follows:

"(2)b.   Provided, however, that notwithstanding any other provisions of this Section, any corporation receiving dividends from a subsidiary corporation ((as defined in subsection (2)a above)) not having business transactions with or not engaged in the same or similar business as the taxpayer shall allocate such dividends less related expenses and less that portion of such dividends deductible under the provisions of subdivision (7) of G.S. 105-147 directly to the state, states, or other taxing jurisdictions to which the subsidiary is subject to a tax based on net income. If such subsidiary corporation is subject to a tax based on net income in North Carolina, the net amount of such dividends received by the taxpayer corporation from such subsidiary shall be allocated directly to North Carolina by use of the same percentage used in determining the portion of such dividends deductible under the provisions of subdivision (7) of G.S. 105-147. For purposes of this Section, the net amount of dividends shall mean gross dividend income received less related expenses and less that portion of such dividends deductible under the provisions of subdivision (7) of G.S. 105-147."

Sec. 2.  All laws and clauses of laws in conflict with this Act are hereby repealed.

Sec. 3.  This Act shall be effective as to tax years beginning on or after January 1, 1963.

Sec. 4.  This Act shall be in full force and effect upon its ratification.

In the General Assembly read three times and ratified, this the 25th day of June, 1963.