The 2013 Legislature partially decoupled from the IRS code section 179 expense deduction for tax years 2010 through 2013. As a result some businesses that invested in technologies, upgrades, and new facilities are facing sizable tax bites from the state.
However the development seems to have been caused by a “drafting error” and the state revenue department is advising companies affected to consider filing 2013 tax returns under an extension.
The intent of the lawmakers was to adjust the deduction to 85 per cent of the federal limit of $800,000. However the draft lowered the NC amount to $125,000.
“The department expects the General Assembly to make a technical change during the 2014 session,” State Revenue Department has advised.
The Hosiery and Textiles Governmental Affairs Council is contacting lawmakers to push for retaining the deductions at the federal level. Companies are advised to contact their accountants if extensions are merited … and to contact legislators and urge changes to IRS Code 179.