NC H554

S Corporation shareholders may deduct losses/deductions up to their combined adjusted basis in stock and indebtedness; amounts exceeding basis must be added to taxable income, effective for taxable years beginning on or after January 1, 2025.

North Carolina conforms to the federal Bipartisan Budget Act partnership audit system, allowing partnerships to elect to pay tax at the partnership level for federal audit adjustments and establishing a 90-day reporting requirement for final federal partnership adjustments.

Peer-to-peer vehicle sharing providers (like Turo) are added to the highway use tax framework, requiring them to pay an 8% tax on gross receipts from short-term rentals, effective October 1, 2025.

Updates the Internal Revenue Code reference date from January 1, 2023, to January 1, 2025, and increases the frivolous return penalty maximum from $500 to $2,000.

Clarifies remote seller thresholds by specifying that retailers exceeding $100,000 in gross sales become engaged in business on the first day of the first month occurring at least 60 days after exceeding the threshold.