SECTION .0600 – FRANCHISE TAX RETURN

 

17 NCAC 05F .0601           PROCEDURES FOR FILING A FRANCHISE TAX

RETURN

(a)  The provisions of this Rule apply unless the Secretary

authorizes a combined group to file a combined franchise tax return under G.S.

105-122.  Each corporation that is doing business in this State pursuant to

G.S. 105-114(b)(3) shall file a separate North Carolina franchise tax return

and pay any franchise tax due.  Any corporation that is included in a combined

income tax return but that is not doing business in this State pursuant to G.S.

105-114(b)(3) is not subject to North Carolina franchise tax.

(b)  The principal member shall file its franchise tax

return on the combined group's CD-405.

(c)  All other members' separate returns shall include zero

dollars ($0) on the "Net Taxable Income" and "NC Net Income Tax"

lines on the CD-405 and include a statement with the return that:

(1)           Indicates its income is included in the

combined income tax return filed by the principal member; and

(2)           Identifies the name and Federal Employer

Identification Number of the principal member.

(d)  If the corporation filing a franchise tax return is a

multistate taxpayer, then it shall calculate an apportionment factor to be used

in calculating its capital stock base using its separate entity property,

payroll, and sales before intercompany eliminations.  Schedule O of the CD-405

must reflect the entity's apportionment factor for franchise tax purposes.

 

History Note:        Authority G.S. 105-114(b)(3); 105-122;

105-130.5A; 105-262.1;

Eff. January 31, 2013.