The N.C. Budget and Tax Center is out with a new brief this morning that critiques a legislative proposal to hamstring the state Department of Revenue and once more makes the case for the enactment of mandatory “combined tax reporting” by large corporations. This is from the news release that accompanied it:
“Undermining state tax enforcement is not the answer, report says
The real solution is mandatory combined reporting, which would protect North Carolina’s small business and stop costly tax avoidance
RALEIGH (June 23, 2010) — Gutting North Carolina’s ability to collect from corporations that deliberately underreport their in-state earnings would hurt small businesses and drain revenue from the state, a new report released this morning says.
Senate Bill 1172, ‘Fair Tax Penalties,’ would eliminate the state Department of Revenue’s ability to levy penalties after determining that the parent company and its affiliates did not accurately report their true earnings.
‘Taking away the Department of Revenue’s authority to levy tax penalties would just encourage aggressive tax avoidance by large, multi-state corporations,’ said Elaine Mejia, director of the NC Justice Center’s Budget & Tax Center and author of the report. ‘This puts North Carolina’s locally-owned small businesses at a major disadvantage.'”
Read the full report here.