Mar 27, 2017
From KPMG TaxWatch
Senate Bill 325, titled the “Billion Dollar Middle Class Tax Cut,” was recently introduced in North Carolina. While this bill would reduce taxes on individuals, it would also make a few key changes that would affect business taxpayers. On the corporate income tax side, Senate Bill 325 would reduce the current 3.0 percent corporate income tax rate to 2.75 percent for tax years beginning on or after January 1, 2018. The rate would be further reduced to 2.5 percent for tax years beginning on or after January 1, 2019. Another change would be the adoption of market-based sourcing also for tax years beginning on or after January 1, 2018. Under the market-based sourcing provisions, receipts from services would be sourced to the location where the service is delivered and receipts from intangible property would generally be sourced based on location of use. The bill also provides specific and detailed market-based sourcing rules for banks. Recall, North Carolina already has a regulation in place addressing market-based sourcing and, if enacted, Senate Bill 325 would require that the regulation be entered into the North Carolina Administrative Code. Please stay tuned to TWIST for future updates on this and other North Carolina bills.
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The following information is not intended to be "written advice concerning one or more federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.
The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.