In a bill being discussed in the House Finance Committee meeting today, a new targeted tax break would go into effect to benefit one company. Senate Bill 575, sponsored by Sen David Hoyle (D-Gaston), would change the apportionment formula for eligible taxpayers so that only the sales factor would be considered in apportioning income (and the amount of tax to be paid) that would provide a tax reduction to a corporation with relatively large shares of its nationwide property and payroll in NC but a relatively small share of its nationwide sales in NC. Current law apportions the tax liability based on three factors: property, payroll (each weighted 25 percent) and sales (weighted at 50 percent).
According to the NC Dept of Revenue, no company currently meets these criteria for the tax break but a potential facility by Apple being proposed in Iredell County would. A fiscal note on the bill anticipates that the tax break would result in a revenue loss of $3M per year beginning in 2011-12. If the total property investment reaches $1 billion, the annual loss would be about $12.5 M annually beginning in 2018-19.
