A BILL TO BE ENTITLED
AN ACT TO MODIFY THE EXPENSE ATTRIBUTION LAW AS IT APPLIES TO DEDUCTIBLE DIVIDENDS.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 105‑130.6A reads as rewritten:
"§ 105‑130.6A.  Adjustment for expenses related to dividends.
(a)	Definitions. – The following definitions apply in this section:
	(2)	Bank holding company. – A holding company with an affiliate that is subject to the privilege tax on banks levied in G.S. 105‑102.3.
(3)	Dividends. – Dividends received that are not taxed under this Part.
(4)	Electric power holding company. – A holding company with an affiliate or a subsidiary that is subject to the franchise tax on electric power companies levied in G.S. 105‑116.
(5)	Expense adjustment. – The adjustment required by G.S. 105‑130.5(c)(3) for expenses related to dividends not taxed under this Part.
(6)	Holding company. – Defined in G.S. 105‑120.2.
(b)	Uniform Rule. – The adjustment under G.S. 105‑130.5(c)(3) for expenses related to dividends not taxed under this Part must be computed pursuant to guidelines adopted by the Department of Revenue. The guidelines adopted by the Department must apply equally to bank holding companies, electric power holding companies, and other corporations.
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SECTION 2.  This act is effective for taxable years beginning on or after January 1, 2003. Notwithstanding G.S. 105‑163.41, no addition to tax may be made under that statute for a taxable year beginning on or after January 1, 2003, and before January 1, 2004, with respect to an underpayment of corporation tax to the extent the underpayment was created or increased by this act.