Reporting and Tax Filing Requirements for Corporations in North Carolina

If you have set up a corporation in North Carolina, each year you need to file an annual report, a state franchise and corporate income tax return, in addition to a federal corporate tax return.

You can file the annual report with the North Carolina Secretary of State online. The annual report must be filed by the 15^th of the fourth month after the close of the corporation's fiscal year. As indicated by the North Carolina Secretary of State, professional corporations and non-profit corporations are not required to file an annual report.

The North Carolina Secretary of State provides A Guide to Online Filings for Annual Reports. The annual report consists of general information on the corporation, the registered agent, the corporation's principal office, and the officers, members and managers. The annual report can be electronically signed by the president, one of the corporate officers, or an incorporator. The fee for filing an annual report online is $18 plus a $2 electronic transaction fee.

Corporations in North Carolina are subject to annual state income tax and a state franchise tax. All active and inactive domestic corporations in North Carolina are subject to the franchise tax. And foreign corporations with a Certificate of Authority to do business in North Carolina or that are actually doing business in North Carolina are also subject to the franchise tax.

The franchise tax applies on the largest of three tax bases: the total or allocated capital stock, surplus and undivided profits; 55% of the appraised ad valorem tax value of all tangible property the corporation has in North Carolina; or the actual investment in tangible property in North Carolina.

Corporations doing business inside and outside North Carolina can allocate their capital stock, surplus and undivided profits to their North Carolina business according to a specified formula. But the franchise tax is still applied on the largest of the three tax bases mentioned above.

The franchise tax rate is 0.0015, with a minimum tax of $35, and is filed on Form CD-405 for C Corporations, along with the North Carolina corporate income tax. S corporations file Form CD-401S.

All corporations chartered in North Carolina and corporations doing business in North Carolina are subject to the North Carolina state corporate income tax. The North Carolina Department of Revenue defines what it means to be doing business in North Carolina under Who Should File.

The corporate tax rate in North Carolina is 6.9% on net taxable income. Net taxable income in North Carolina is calculated starting with net taxable income for federal tax purposes and adding and subtracting certain adjustments.

Corporations that expect to have an income tax liability to North Carolina of at least $500 must file a declaration of estimated taxes. Estimated taxes can be filed and paid online using Form CD-429.

Sources:

A Guide to Online Filings for Annual Reports, North Carolina Secretary of State

Corporate Income Tax Information, North Carolina Department of Revenue

Online Filing and Payments, CD-429 Corporate Estimated Income Tax, North Carolina Department of Revenue

Form CD-401S, S Corporation Tax Return, North Carolina Department of Revenue

Form CD-405, C Corporation Tax Return, North Carolina Department of Revenue

Franchise Tax Information, North Carolina Department of Revenue