Bill Summary for H 998 (2013-2014)

Summary date: 

Apr 18 2013
S.L. 2013-316

Bill Information:

View NCGA Bill Details2013-2014 Session
House Bill 998 (Public) Filed Wednesday, April 17, 2013
A BILL TO BE ENTITLED AN ACT TO SIMPLIFY THE NORTH CAROLINA TAX STRUCTURE AND TO REDUCE INDIVIDUAL AND BUSINESS TAX RATES.
Intro. by Lewis, Setzer, Moffitt, Szoka.

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Bill summary

Amends Part I (Corporation Income Tax)of GS Chapter 105, Article 4,by creating new section GS 105-153.6 (Adjustments when State decouples from federal accelerated depreciation and expensing), providing a special accelerated depreciation clause, which specifies that placing certain property into use and taking a special accelerated depreciation requires that taxpayer to add to the taxpayer's federal taxable income or adjusted gross income 85% of the amount taken for that year.

Taxpayer is allowed to deduct 20% of the add-back in each of the first five taxable years following the year the taxpayer is required to include the add-back in income. Includes a table which indicates applicable periods.Specifies a 2009 Depreciation Exception, relating to property placed in service during the 2009 taxable year and whose taxable income reflects a special accelerated depreciation deduction. Provides that for this subdivision, the definition of section 179 property has the same meaning as section 179 of the Code as of January 2011. A taxpayer placing section 179 property into service during a taxable year will have to add to the taxpayer's taxable income85% ofthe amount by which the taxpayer's expense deduction under section 179of the Code exceeds the amount that would have been allowed for that taxable year under section 179 of the Code as of May 1, 2010.

Also amends Part 2 (Individual Income Tax) of GS Chapter 105, Article 4 by creating new section GS 105-134.6A that is identical to the provisions of new section GS 105-153.6 (1) except that it applies to individual income tax instead of corporation income tax, and (2) provides that placing certain property into use and taking a special accelerated depreciationrequiring thetaxpayer to add to the taxpayer's federal taxable income or adjusted gross income 85% of the amount taken for that year, necessitates that for taxable years before 2013, the amount must be added to the taxpayer's federal taxable income. For years after 2013, the amount must be added to the taxpayer's adjusted gross income.

Amends GS 105-130.5(a) to provide that the amount required to be added under GS 105-130.5B when the state decouples from federal accelerated depreciation and expensing is an addition to be made to federal tax income in determining state net income.

Amends GS 105-130.5(b) to add as a deduction from federal taxable income to determine state net income, the amount allowed as a deduction under GS 105-130.5B as a result of an add-back for federal accelerated depreciation and expensing.

Amends GS 105-134.6(b) to provide for the following deduction in calculating North Carolina taxable income, to the extent each item is included in taxable income: the amount allowed as deduction under GS 105-134.6A as a result of an add-back for federal accelerated depreciation and expensing.

Amends GS 105-134.6(c) to provide that the following additions to taxable income are to be made in calculating North Carolina taxable income, to the extent that each item is not included in taxable income: the amount required to be added under GS 105-134.6A when the state decouples from federal accelerated depreciation and expensing.

Makes conforming changesrepealing the following subdivisionsto GS 105-130.5(a), additions to federal taxable income to be made in determining state net income: (15), (15a), (15b), (23), and (23a). Also repeals the following subdivisions to GS 105-130.5(b), deductions from federal taxable income to be made in determining state net income: (21), (21a), (21b), (26), and (26a).

Makes conforming changes, deleting GS 105-134.6(b)(17), (17a), (17b), (21), and (21a), subsections concerning allowable deductions in calculating North Carolina taxable income.

Makes conforming changes, deleting GS 105-134.6(c)(8),(8a), (8b), (15), and (15a), subsections concerning required additions to income in calculating North Carolina taxable income.

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