A BILL TO BE ENTITLED
AN ACT to UPDATE THE REFERENCE TO THE INTERNAL REVENUE CODE USED IN DEFINING AND DETERMINING CERTAIN STATE TAX PROVISIONS.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 105‑228.90(b)(1b) reads as rewritten:
"(b)	Definitions. – The following definitions apply in this Article:
…
(1b)	Code. – The Internal Revenue Code as enacted as of January 1, 2005, including any provisions enacted as of that date which become effective either before or after that date, but not including the amendments made to Section 164 of the Code by Section 501 of P.L. 108‑357."
SECTION 2.  G.S. 105‑130.5(a) reads as rewritten:
"(a)	The following additions to federal taxable income shall be made in determining State net income:
…
(16)	The amount excluded from gross income under Subchapter R of Chapter 1 of the Code."
SECTION 3.  Notwithstanding Section 1 of this act, any amendments to the Internal Revenue Code enacted after May 1, 2004, that increase North Carolina taxable income for the 2004 taxable year become effective for taxable years beginning on or after January 1, 2005.
SECTION 4.  G.S. 105‑228.90(b), as amended by Section 1 of this act, reads as rewritten:
"(b)	Definitions. – The following definitions apply in this Article:
…
(1b)	Code. – The Internal Revenue Code as enacted as of January 1, 2005, including any provisions enacted as of that date which become effective either before or after that date."
SECTION 5.  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 taxable income:
…
(3)	Any amount deducted from gross income under section 164 of the Code as state, local, or foreign income tax or as state or local general sales 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 the taxpayer is required to add to taxable income under subdivision (4) of this subsection.
…."
SECTION 6.  Notwithstanding any other provision of law, a taxpayer whose federal taxable income for 2004 is reduced due to a charitable contribution of cash made in January 2005 for Indian Ocean tsunami relief efforts in accordance with P.L. 109‑1 is not required to add back the amount of the deduction related to that contribution in determining North Carolina taxable income for 2004.
SECTION 7.  Sections 4 and 5 of this act become effective for taxable years beginning on or after January 1, 2005.  The remainder of this act is effective when it becomes law.