NC H619

Repeals G.S. 105-130.6 and replaces it with G.S. 105-130.5A, establishing the Secretary of Revenue's authority to adjust corporate net income or require combined returns when intercompany transactions lack economic substance or are not at fair market value.

Secretary may require corporations to provide information within 90 days to determine if intercompany transactions have economic substance and fair market value, and may redetermine net income by adjusting transactions or requiring a combined return.

Defines "economic substance" as requiring both reasonable business purposes other than tax benefits and economic effects beyond tax benefits, with exceptions for centralized cash management and tax benefits consistent with legislative intent.

Excludes certain entities from combined return requirements, including S corporations, nonprofits, insurance companies (except captives), foreign corporations, and corporations with at least 80% active foreign business income.

Corporations may request written advice from the Secretary regarding whether redetermination or combined returns would be required; effective January 1, 2012 for assessments proposed for taxable years beginning on or after that date.