§ 105-129.65. (For delayed repeal, see note) Allocation; cap; makeup; and carryforward. - North Carolina Statutes

§ 105‑129.65.  (Fordelayed repeal, see note) Allocation; cap; makeup; and carryforward.

(a)        Allocation. – Thecredit allowed by this Article may be taken against the franchise taxes leviedunder Article 3 of this Chapter and the income taxes levied under Article 4 ofthis Chapter. When the taxpayer claims a credit under this Article, thetaxpayer must elect the percentage of the credit to be applied against thetaxes levied under Article 3 of this Chapter with any remaining percentage tobe applied against the taxes levied under Article 4 of this Chapter. Thiselection is not binding for the year in which it is made or for anycarryforwards of that credit. A taxpayer may elect a different allocation foreach year in which the taxpayer qualifies for a credit.

(b)        Cap. – The amountof credit claimed in a taxable year under this Article may not exceed thelesser of the amount determined under G.S. 105‑129.64 and the totalamount of tax imposed under Articles 3 and 4 of this Chapter, reduced by thesum of all other credits allowed against those taxes, except tax payments madeby or on behalf of the taxpayer. Credits that may eliminate only a portion ofthe taxpayer's liability must be taken before credits that may eliminate all ofa taxpayer's liability, which in turn must be taken before any credits that arerefundable. This limitation applies to the cumulative amount of the creditallowed in any tax year, including carryforwards claimed by the taxpayer underthis Article for previous tax years.

(c)        Makeup. – In anyyear in which the amount of the credit calculated based on output exceeds theapplicable cap under G.S. 105‑129.64, the excess credit may be creditedto a make up account. Amounts credited to the make up account may remain in theaccount for seven years or until they are used as provided in this subsection,whichever is earlier. In any year in which the amount of the credit calculatedbased on output is less than the applicable cap under G.S. 105‑129.64,the taxpayer may increase the credit allowed for that taxable year to the capamount, as adjusted by any applicable employment level adjustment factor, byusing excess credit available in the make up account. A successor in businessmay take the amounts available in a make up account of a predecessor corporationas if they were excess credits available in a make up account of the successorin business.

(d)        Carryforward. – Anyunused portion of a credit allowed under this Article may be carried forwardfor the next succeeding 25 years. A successor in business may take thecarryforwards of a predecessor corporation as if they were carryforwards of acredit allowed to the successor in business. (2004‑204, 1st Ex. Sess., s. 1.)