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North Carolina's Transfer Pricing Initiative: Deal or No Deal?

Tax Notes State

    Publications
  • September 14, 2020

Kay Hobart wrote a column in Tax Notes State magazine on the North Carolina Department of Revenue's new initiative to resolve complex disputes over corporations' state tax liability.

"As a separate-entity state, North Carolina requires each corporation to file a separate corporate income tax return and generally does not permit consolidated or unitary combined reporting," Kay wrote. "Under its chosen method, intercompany transactions between members of an affiliated group are not eliminated, as occurs in combined reporting states."

"North Carolina has a long history of adjusting intercompany transactions between related companies, which has had some twists and turns along the way," she continued. "The Department of Revenue recently announced a program designed to 'expedite the resolution of intercompany pricing issues.' There is more to the program than first meets the eye, however. Corporate taxpayers should carefully consider whether participation may be beneficial based on their own unique facts and ability to quickly navigate the program’s guidelines and the state’s distinctive approach to intercompany pricing."

Subscribers can read the full column here. Tax Notes State has been a leading magazine on state tax issues for nearly 30 years.