On December 18, 2015, President Obama signed the Protecting Americans from Tax Hikes (“PATH”) Act of 2015, which includes a provision making permanent the Research & Development (“R&D”) tax credit under Section 41. This is a very significant development, as the R&D credit generally has required annual legislative renewal. A permanent R&D credit will provide businesses and investors the stability needed to enhance long term planning and decision making.
The North Carolina legislature is looking at potentially changing the way corporate taxpayers allocate income to North Carolina. The Revenue Laws Study Committee is looking at the revenue effect of changing the sales factor under current law to a market-based sourcing methodology. To assist the committee in measuring the revenue effect of market-based sourcing, every corporate taxpayer that has apportionable income greater than $10 million must file Form CD-400 with the state by April 15, 2016. There’s a $5,000 penalty if you miss this filing deadline!
According to our recent survey of furniture manufacturers and distributors, new orders increased 1 percent over December 2014 orders. December 2014 orders were 15 percent higher than December 2013 orders so the 1 percent increase this year over December last year was still a pretty decent month. One-half of our participants reported increases this month down slightly from last month.
The North Carolina Department of Revenue has issued three important notices regarding repair, maintenance, and installation charges. Effective March 1, 2016, the general NC sales tax rate will apply to the gross receipts derived from repair, maintenance, and installation services sold at retail. In addition, installation charges by a retailer for tangible personal property, certain digital property, and taxable services, are subject to the applicable sales and use tax rate for the item, even though the installation charges may be separately stated by the retailer. For sales prior to March 1, 2016, a sales and use tax exemption was provided for the separately stated portion of the sales price for installation charges on the invoice.