Throughout the week, we highlight selected developments involving state tax legislative, judicial, and administrative matters. The alerts provide a brief summary of specific multistate developments relevant to taxpayers, tax professionals, and other interested persons. Read the recent alerts below or visit the archive.
North Carolina enacts PET election On November 18, 2021, the North Carolina governor signed Senate Bill 105 (S.B. 105), which includes a new elective pass-through entity tax (PET). S.B. 105 allows pass-through entities, including entities taxed as a partnership or S corporation, to elect to pay an entity level state income tax for taxable years beginning on or after January 1, 2022. Correspondingly, in computing North Carolina taxable income, a partner or shareholder of an electing pass-through entity must deduct their pro rata share of income subject to the PET. Alternatively, in computing North Carolina taxable income, a partner or shareholder of an electing pass-through entity must add their pro rata share of loss subject to the PET.
This Multistate Tax Alert summarizes some of the provisions of the North Carolina PET election. [Issued: December 2, 2021] More
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