North Carolina HB 13: Repeal Franchise Tax Initial Return.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA 
1991 SESSION 
 
 
CHAPTER 30 
HOUSE BILL 13 
 
AN  ACT  TO  ELIMINATE  THE  FRANCHISE  TAX  INITIAL  RETURN  AND  TO  
INCREASE THE MINIMUM FRANCHISE TAX. 
 
The General Assembly of North Carolina enacts: 
 
Section 1.  G.S. 105-123 is repealed. 
Sec. 2.  G.S. 105-114(a) reads as rewritten: 
"(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." 
Sec. 3.  G.S. 105-120.1 reads as rewritten: 
"§   105-120.1.      Franchise   or   privilege   tax   on   street   bus   or   similar   street   
transportation system for the transportation of passengers for hire. 
(a) Every person, firm or corporation, domestic or foreign, other than municipal 
corporations,  owning  and/or  operating  a  street  railway,  street  bus  or  similar  street  
transportation system for the transportation of passengers for hire shall on or before the 
first  day  of  June  of  each  year  pay  to  the  Secretary  of  Revenue  an  annual  franchise  or  
privilege tax in the amount of twenty
-five dollars ($25.00).  thirty-five dollars ($35.00). 

 
Page 2 S.L. 1991-30 House  Bill 13 
(b) Businesses taxed under this section shall not be required to pay the franchise 
tax  imposed  by  G.S.  105-122  or  105
-123 and  no  county,  city  or  town  shall  impose  a  
franchise, license or privilege tax upon the business taxed under this section." 
Sec. 4.  G.S. 105-120.2(b)(1) reads as rewritten: 
"(b)(1)  Every  corporation  taxed  under  this  section  shall  annually  pay  to  the  
Secretary  of  Revenue,  at  the  time  the  report  and  statement  are  due,  a  
franchise  or  privilege  tax,  which  is  hereby  levied,  at  the  rate  of  one  
dollar and fifty cents ($1.50) per one thousand dollars ($1,000) of the 
amount determined under subsection (a) of this section, but in no case 
shall the tax be more than seventy-five thousand dollars ($75,000) nor 
less than twenty
-five dollars ($25.00). thirty-five dollars ($35.00)." 
Sec. 5.  G.S. 105-122(d) reads as rewritten: 
"(d)    After  determining  the  proportion  of  its  total  capital  stock,  surplus  and  
undivided  profits  as  set  out  in  subsection  (c)  of  this  section,  which  amount  so  
determined shall in no case be less than fifty-five percent (55%) of the appraised value 
as  determined  for  ad  valorem  taxation  of  all  the  real  and  tangible  personal  property  in  
this State of each such corporation plus the total appraised value of intangible property 
returned for taxation of intangible personal property as herein specified nor less than its 
total actual investment in tangible property in this State, every corporation taxed under 
this  section  shall  annually  pay  to  the  Secretary  of  Revenue,  at  the  time  the  report  and  
statement are due, a franchise or privilege tax, which is hereby levied at the rate of one 
dollar  and  fifty  cents  ($1.50)  per  one  thousand  dollars  ($1,000)  of  the  total  amount  of  
capital stock, surplus and undivided profits as herein provided.  The tax imposed in this 
section  shall  in  no  case  be  less  than  twenty
-five  dollars  ($25.00)  thirty-five  dollars  
($35.00) and  shall  be  for  the  privilege  of  carrying  on,  doing  business,  and/or  the  
continuance  of  articles  of  incorporation  or  domestication  of  each  such  corporation  in  
this  State.    Appraised  value  of  tangible  property  including  real  estate  shall  be  the  ad  
valorem va