Download SL 1971-820 - North Carolina General Assembly

NORTH CAROLINA GENERAL ASSEMBLY
1971 SESSION
CHAPTER 820
HOUSE BILL 1082
AN
ACT TO PROVIDE CORPORATE SHAREHOLDERS OF REGULATED
INVESTMENT COMPANIES THE SAME TREATMENT AS NOW PROVIDED FOR
INDIVIDUAL SHAREHOLDERS, TO ALLOW REGULATED INVESTMENT
COMPANIES TO EXCLUDE DISTRIBUTIONS MADE TO SHAREHOLDERS FROM
INCOME TAX AND TO PROVIDE SAME TREATMENT TO REAL ESTATE
INVESTMENT TRUSTS AS FOR REGULATED INVESTMENT COMPANIES.
The General Assembly of North Carolina enacts:
Section 1. G.S. 105-130.5 is amended by adding a new subdivision in the proper
order at the end of subsection (b), which shall read as follows:
"With respect to a shareholder of a regulated investment company, the portion of
undistributed capital gains of such regulated investment company included in such
shareholder's Federal taxable income and on which the Federal tax paid by the regulated
investment company is allowed as a credit or refund to the shareholder under Section 852 of the
Internal Revenue Code."
Sec. 2. G.S. 105-130.12 is rewritten to read as follows:
"§ 105-130.12. Regulated investment companies and real estate investment trusts. — Any
organization or trust which, in the opinion of the Commissioner of Revenue of North Carolina,
qualifies as either a 'regulated investment company' under the provisions of United States Code
Annotated Title 26, § 851, or as a 'real estate investment trust' under the provisions of United
States Code Annotated Title 26, § 856, and which files with the North Carolina Department of
Revenue its election to be treated as a 'regulated investment company', or as a 'real estate
investment trust' shall be taxed under this division upon only that part of its net income which
is not distributed or declared for distribution to shareholders during the income year or by the
time required by law for the filing of the return for the income year including the period of any
extension of time granted for filing such return."
Sec. 3. The third paragraph of G.S. 105-125 is hereby rewritten to read as follows:
"Provided, that any corporation doing business in North Carolina which in the opinion of the
Commissioner of Revenue of North Carolina qualifies as a 'regulated investment company'
under the provisions of United States Code Annotated Title 26, section 851, or as a 'real estate
investment trust' under the provisions of United States Code Annotated Title 26, § 856, and
which files with the North Carolina Department of Revenue its election to be treated as a
'regulated investment company' or as a 'real estate investment trust,' shall in determining its
basis for franchise tax be allowed to deduct the aggregate market value of its investments in the
stocks, bonds, debentures, or other securities or evidences of debt of other corporations,
municipalities, governmental agencies or governments."
Sec. 4. This act shall become effective with respect to taxable income years
beginning on and after January 1, 1971.
In the General Assembly read three times and ratified, this the 12th day of July,
1971.