North Carolina adopts rules regarding Secretary's authority to adjust income or require combined returns

January 2013


The North Carolina Department of Revenue adopted regulations regarding the Secretary of Revenue's authority to adjust net income or require combined returns when intercompany transactions lack economic substance or are not at fair market value. The regulations are promulgated in response to H.B. 619, enacted 6/30/11, conferring combination authority upon the Secretary and S.B. 824, enacted 6/20/12, requiring the Department to adopt rules before the Secretary may exercise such authority. The regulations are applicable for taxable years beginning on or after January 1, 2012. [Secretary's Authority to Adjust Net Income or Require a Combined Return, 17 NCAC 05F.0100, North Carolina Department of Revenue, effective 1/31/13]

Our understanding is that the final adopted regulations have been submitted to the North Carolina Office of Administrative Hearings (OAH) for publication in the North Carolina Register. The regulations should soon be available on the OAH website.

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