GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1989

H	1 

HOUSE BILL 2067*

Short Title:  Adopt 1990 Code and Index.	(Public)
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Sponsors: Representatives Lilley, Abernethy, Brawley, Craven, Hasty, and Wiser.
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Referred to:  Finance.
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May 24, 1990

A BILL TO BE ENTITLED
AN ACT TO UPDATE THE REFERENCE TO THE INTERNAL REVENUE CODE USED TO DETERMINE CERTAIN TAXABLE INCOME AND TAX EXEMPTIONS AND TO ADOPT THE FEDERAL STANDARD DEDUCTION AND PERSONAL EXEMPTION AMOUNTS FOR 1990.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 105-134.1(1) reads as rewritten:
"(1)	Code.  The Internal Revenue Code as enacted as of January 1, 1990, including any provisions enacted as of that date which become effective either before or after that date."
Sec. 2.  G.S. 105-134.6(c) reads as rewritten:
"(c)	Additions.  The following additions to taxable income shall be made in calculating North Carolina taxable income, to the extent each item is not included in gross income:
(1)	Interest upon the obligations of states, other than this State, and their political subdivisions.
(2)	Any amount allowed as a deduction from gross income under the Code that is taxed under the Code by a separate tax other than the tax imposed in section 1 of the Code.  The Secretary shall report to the 1991 General Assembly all provisions under the Code for taxing certain amounts separately and shall recommend whether those amounts should be taxed separately under this Division or should be added to taxable income in calculating North Carolina taxable income.
(3)	Any amount deducted from gross income under section 164 of the Code as State, local, or foreign income tax to the extent that the taxpayer's total itemized deductions deducted under the Code for the taxable year exceed the standard deduction allowable to the taxpayer under the Code reduced by the amount by which the taxpayer's allowable standard deduction has been increased under section 63(c)(4) of the Code for taxable years beginning on or after January 1, 1991.
(4)	The amount by which the taxpayer's standard deduction has been increased under section 63(c)(4) of the Code for taxable years beginning on or after January 1, 1991, and the amount by which the taxpayer's personal exemptions have been increased under section 151(d)(3) of the Code for taxable years beginning on or after January 1, 1991."
Sec. 3.  G.S. 105-134.2 reads as rewritten:
"§ 105-134.2.  Individual income tax imposed.
(a)	A tax is imposed upon the North Carolina taxable income of every individual.  The tax shall be levied, collected, and paid annually and shall be computed at the following percentages of the taxpayer's North Carolina taxable income.
(1)	For married individuals who file a joint return under G.S. 105-152.1 and for surviving spouses, as defined in section 2(a) of the Code:
		On the North Carolina taxable income up to fourteen thousand five hundred dollars ($14,500), six percent (6%); and
		On the excess over fourteen thousand five hundred dollars ($14,500), seven percent (7%).
(2)	For heads of households, as defined in section 2(b) of the Code:
		On the North Carolina taxable income up to eleven thousand six hundred dollars ($11,600), six percent (6%); and
		On the excess over eleven thousand six hundred dollars ($11,600), seven percent (7%).
(3)	For unmarried individuals other than surviving spouses and heads of households:
		On the North Carolina taxable income up to eight thousand seven hundred dollars ($8,700), six percent (6%); and
		On the excess over eight thousand seven hundred dollars ($8,700), seven percent (7%).
(4)	For married individuals who do not file a joint return under G.S. 105-152.1:
		On the North Carolina taxable income up to seven thousand two hundred fifty dollars ($7,250), six percent (6%); and
		On the excess over seven thousand two hundred fifty dollars ($7,250), seven percent (7%)."
Sec. 4.  G.S. 105-2.1 reads as rewritten:
"§ 105-2.1. Internal Revenue Code definition.
As used in this Article, the term ‘Code' means the Internal Revenue Code as enacted as of January 1, 1990, and includes any provisions enacted as of that date which become effective either before or after that date."
Sec. 5.  G.S. 105-114 reads as rewritten:
"§ 105-114. Nature of taxes; definitions.
(a)	Nature of Taxes.  The taxes levied in this Article upon persons and partnerships are for the privilege of engaging in business or doing the act named.  The taxes levied in this Article upon corporations are privilege or excise taxes levied upon:
(1)	Corporations organized under the laws of this State for the existence of the corporate rights and privileges granted by their charters, and the enjoyment, under the protection of the laws of this State, of the powers, rights, privileges and immunities derived from the State by the form of such existence; and
(2)	Corporations not organized under the laws of this State for doing business in this State and for the benefit and protection which such corporations receive from the government and laws of this State in doing business in this State.
If the corporation is organized under the laws of this State, the payment of the taxes levied by this Article shall be a condition precedent to the right to continue in such form of organization; and if the corporation is not organized under the laws of this State, payment of these taxes shall be a condition precedent to the right to continue to engage in doing business in this State.  The taxes levied in this Article or schedule shall be for the fiscal year of the State in which the taxes become due; except that the taxes levied in G.S. 105-122 and G.S. 105-123 shall be for the income year of the corporation in which the taxes become due.
(b)	Definitions.  The following definitions apply in this Article:
(1)	The term ‘Code' means the Internal Revenue Code as enacted as of January 1, 1990, and includes any provisions enacted as of that date which become effective either before or after that date.
(2)	The term ‘corporation' shall, unless the context clearly requires another interpretation, mean and include not only corporations but also associations or joint-stock companies and every other form of organization for pecuniary gain, having capital stock represented by shares, whether with or without par value, and having privileges not possessed by individuals or partnerships; and whether organized under, or without, statutory authority.  The term ‘corporation' shall also mean and include any electric membership corporation organized under Chapter 117, and any electric membership corporation, whether or not organized under the laws of this State, doing business within the State.
(3)	The term ‘doing business' shall mean and include each and every act, power or privilege exercised or enjoyed in this State, as an incident to, or by virtue of the powers and privileges acquired by the nature of such organizations whether the form of existence be corporate, associate, joint-stock company or common-law trust.
(4)	The term ‘income year' shall mean an income year as defined in G.S. 105-130.2(5)."
Sec. 6.  G.S. 105-130.2(1) reads as rewritten:
"(1)	‘Code' means the Internal Revenue Code as enacted as of January 1, 1990, and includes any provisions enacted as of that date which become effective either before or after that date."
Sec. 7.  G.S. 105-131(b)(1) reads as rewritten:
"(1)	‘Code' means the Internal Revenue Code as enacted as of January 1, 1990, and includes any provisions enacted as of that date which become effective either before or after that date."
Sec. 8.  G.S. 105-163.1(11) reads as rewritten:
"(11)	‘Code' means the Internal Revenue Code as enacted as of January 1, 1990, and includes any provisions enacted as of that date which become effective either before or after that date."
Sec. 9.  G.S. 105-212(f) reads as rewritten:
"(f)	As used in this section, the term ‘Code' means the Internal Revenue Code as enacted as of January 1, 1990, and includes any provisions enacted as of that date which become effective either before or after that date."
Sec. 10.  This act is effective for taxable years beginning on or after January 1, 1990.