Section 105-153.4 - [Effective for taxable years beginning on or after January 1, 2015] North Carolina taxable income defined(a) Residents. - For an individual who is a resident of this State, the term "North Carolina taxable income" means the taxpayer's adjusted gross income as modified in G.S. 105-153.5 and G.S. 105-153.6.(b) Nonresidents. - For a nonresident individual, the term "North Carolina taxable income" means the taxpayer's adjusted gross income as modified in G.S. 105-153.5 and G.S. 105-153.6, multiplied by a fraction the denominator of which is the taxpayer's gross income as modified in G.S. 105-153.5 and G.S. 105-153.6, and the numerator of which is the amount of that gross income, as modified, that is derived from North Carolina sources and is attributable to the ownership of any interest in real or tangible personal property in this State, is derived from a business, trade, profession, or occupation carried on in this State, or is derived from gambling activities in this State.(c) Part-year Residents. - If an individual was a resident of this State for only part of the taxable year, having moved into or removed from the State during the year, the term "North Carolina taxable income" has the same meaning as in subsection (b) of this section except that the numerator includes gross income, as modified under G.S. 105-153.5 and G.S. 105-153.6, derived from all sources during the period the individual was a resident.(d) S Corporations and Partnerships. - In order to calculate the numerator of the fraction provided in subsection (b) of this section, the amount of a shareholder's pro rata share of S Corporation income, as modified in G.S. 105-153.5 and G.S. 105-153.6, that is includable in the numerator is the shareholder's pro rata share of the S Corporation's income attributable to the State, as defined in G.S. 105-131(b)(4). In order to calculate the numerator of the fraction provided in subsection (b) of this section for a member of a partnership or other unincorporated business that has one or more nonresident members and operates in one or more other states, the amount of the member's distributive share of the total net income of the business, as modified in G.S. 105-153.5 and G.S. 105-153.6, that is includable in the numerator is determined in accordance with the provisions of G.S. 105-130.4. As used in this subsection, total net income means the entire gross income of the business less all expenses, taxes, interest, and other deductions allowable under the Code that were incurred in the operation of the business.(d1) Sole Proprietorships. - In order to calculate the numerator of the fraction provided in subsection (b) of this section for an individual that operates a business in one or more other states, the amount of an individual's total net income of the business, as modified in G.S. 105-153.5 and G.S. 105-153.6, that is includable in the numerator is determined in accordance with the provisions of G.S. 105-130.4. As used in this subsection, total net income means the entire gross income of the business less all expenses, taxes, interest, and other deductions allowable under the Code that were incurred in the operation of the business.(e) Tax Year. - A taxpayer must compute North Carolina taxable income on the basis of the taxable year used in computing the taxpayer's income tax liability under the Code.N.C. Gen. Stat. § 105-153.4
Amended by 2023 N.C. Sess. Laws 12, s. 1.3, eff. 4/3/2023.Amended by 2017 N.C. Sess. Laws 204, s. 1.9-d, eff. 8/11/2017, and applicable to taxable years beginning on or after 1/1/2014.Amended by 2015 N.C. Sess. Laws 6, s. 2.22-a, eff. for taxable years beginning on or after 1/1/2015.Amended by 2013 N.C. Sess. Laws 316, s. 1.3-c, eff. 1/1/2014.Renumbered from 105-134.5 by 2013 N.C. Sess. Laws 316, s. 1.1-a, eff. 1/1/2014.Amended by 2013 N.C. Sess. Laws 414, s. 55, eff. 8/23/2013.Amended by 2012 N.C. Sess. Laws 79, s. 1.2, eff. 6/26/2012.Amended by 2011 N.C. Sess. Laws 145, s. 31A.1-b, eff. 7/1/2011, and effective for taxable years beginning on or after 1/1/2012.Amended by 2005 N.C. Sess. Laws 276, s. 31.1.(aa), eff. 7/1/2005, which added a new section numbered 10.4 to 2005 N.C. Sess. Laws 344, eff. 8/31/2005. 1989 , c. 728, s. 1.4; 1995 , c. 17, s. 4.This section is set out twice. See also §105-153.4, effective for taxable years beginning on or after 1/1/2014 and before 1/1/2015.