NC H909

Requires corporations that are part of an affiliated group engaged in a unitary business to file combined income tax reports with the state, eliminating intercompany transactions between group members.

Defines key terms including "affiliated group" (corporations with over 50% common ownership), "combined group" (affiliated members in a unitary business), and "unitary business" (related organizations with unity of ownership, operation, or interdependence).

Allows combined groups to elect "water's edge" treatment to exclude foreign corporation members conducting 80% or more of business activity outside the United States, with 10-year election periods automatically renewable unless withdrawn.

Establishes that each combined group member's share of apportionable income apportioned to North Carolina is determined by the member's state apportionment factors relative to the combined group's aggregate factors.

Becomes effective for taxable years beginning on or after January 1, 2012.