TAX NEWS - June 2010

North Carolina House passes bill to boost renewable energy

A bill creating a 25 percent tax credit for the construction of facilities used to manufacture renewable energy cleared the North Carolina House on Thursday and now heads to the Senate Finance Committee.

The credit, to be taken against state income or business franchise taxes, applies to the construction of a wide variety of renewable energy projects, including biomass, hydro-generation, solar, wind and geothermal heat pumps.

There was no immediate assessment of the probable fiscal impact from the credit.

The same legislation also included a number of other tax changes, some business related.

One section would reduce the number of retailers required to make sales tax prepayments to the North Carolina Department of Revenue. Under current law, a retailer taxpayer who is consistently liable for at least $10,000 or more a month in state and local sales and use taxes must file a monthly return and make a prepayment of a portion of the next month's tax liability. The bill expands the reporting threshold to $20,000 or more monthly.

A third section of the bill would give the Department of Revenue the authority to apply a scheduled business tax refund against its outstanding state debt. The measure would raise at least $3 million more a year, General Assembly researchers estimate.