§ 105-151. Tax credits for income taxes paid to other states by individuals. - North Carolina Statutes

§105‑151.  Tax credits for income taxes paid to other states byindividuals.

(a)        An individual whois a resident of this State is allowed a credit against the taxes imposed bythis Part for income taxes imposed by and paid to another state or country on incometaxed under this Part, subject to the following conditions:

(1)        The credit isallowed only for taxes paid to another state or country on income derived fromsources within that state or country that is taxed under its laws irrespectiveof the residence or domicile of the recipient, except that whenever a taxpayerwho is deemed to be a resident of this State under the provisions of this Partis deemed also to be a resident of another state or country under the laws ofthat state or country, the Secretary may allow a credit against the taxesimposed by this Part for taxes imposed by and paid to the other state orcountry on income taxed under this Part.

(2)        The fraction of thegross income, as calculated under the Code and adjusted as provided in G.S. 105‑134.6and G.S. 105‑134.7, that is subject to income tax in another state orcountry shall be ascertained, and the North Carolina net income tax beforecredit under this section shall be multiplied by that fraction. The creditallowed is either the product thus calculated or the income tax actually paidthe other state or country, whichever is smaller.

(3)        Receipts showing thepayment of income taxes to another state or country and a true copy of a returnor returns upon the basis of which the taxes are assessed shall be filed withthe Secretary when the credit is claimed. If credit is claimed on account of adeficiency assessment, a true copy of the notice assessing or proposing toassess the deficiency, as well as a receipt showing the payment of the deficiency,shall be filed.

(b)        If any taxes paidto another state or country for which a taxpayer has been allowed a creditunder this section are at any time credited or refunded to the taxpayer, a taxequal to that portion of the credit allowed for the taxes so credited orrefunded is due and payable from the taxpayer and is subject to the penaltiesand interest provided in Subchapter I of this Chapter. (1939,c. 158, s. 325; 1941, c. 50, s. 5; c. 204, s. 1; 1943, c. 400, s. 4; 1957, c.1340, s. 4; 1963, c. 1169, s. 2; 1967, c. 1110, s. 3; 1973, c. 476, s. 193;1989, c. 728, s. 1.5; 1989 (Reg. Sess., 1990), c. 814, s. 17; 1998‑98, s.92.)