NC General Statutes

N.C. Gen. Stat. § 105-114 (2026)

Nature of taxes; definitions

✓ current as of July 2026

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(a) Repealed by Session Laws 2017-204, s. 1.1, effective August 11, 2017.

(a1) Scope. - The tax levied in this Article upon corporations is a privilege tax levied upon:

(1) Corporations organized under the laws of this State for the existence of the corporate rights and privileges granted by their charters, and the enjoyment, under the protection of the laws of this State, of the powers, rights, privileges and immunities derived from the State by the form of such existence; and

(2) Corporations not organized under the laws of this State for doing business in this State and for the benefit and protection which these corporations receive from the government and laws of this State in doing business in this State.

(a2) Condition for Doing Business. - If the corporation is organized under the laws of this State, the payment of the tax levied by this Article is a condition precedent to the right to continue in the corporate form of organization. If the corporation is not organized under the laws of this State, payment of this tax is a condition precedent to the right to continue to engage in doing business in this State.

(a3) Tax Year. - The tax levied in this Article is for the income year of the corporation in which the taxes become due.

(a4) No Double Taxation. - G.S. 105-122 does not apply to holding companies taxed under G.S. 105-120.2.

(b) Definitions. - The following definitions apply in this Article:

(1) City. - Defined in G.S. 105-228.90.

(1a) Code. - Defined in G.S. 105-228.90.

(2) Corporation. - A domestic corporation, a foreign corporation, an electric membership corporation organized under Chapter 117 of the General Statutes or doing business in this State, or an association that is organized for pecuniary gain, has capital stock represented by shares, whether with or without par value, and has privileges not possessed by individuals or partnerships. The term includes a mutual or capital stock savings and loan association or building and loan association chartered under the laws of any state or of the United States. The term includes a limited liability company or a partnership that elects to be taxed as a corporation under the Code, but does not otherwise include a limited liability company or a partnership.

(3) Doing business. - Each and every act, power, or privilege exercised or enjoyed in this State, as an incident to, or by virtue of the powers and privileges granted by the laws of this State.

(4) Income year. - Defined in G.S. 105-130.2(10).

(5) Total assets. - The sum of all cash, investments, furniture, fixtures, equipment, receivables, intangibles, and any other items of value owned by a person or a business entity.

(d) Critical Infrastructure Disaster Relief. - A nonresident business that solely performs disaster-related work in this State during a disaster response period at the request of a critical infrastructure company is not considered to be doing business in this State for purposes of this Article. The definitions and provisions in G.S. 166A-19.70A apply in this subsection. (1939, c. 158, s. 201; 1943, c. 400, s. 3; 1945, c. 708, s. 3; 1965, c. 287, s. 16; 1967, c. 286; 1969, c. 541, s. 6; 1973, c. 1287, s. 3; 1983, c. 713, s. 66; 1985, c. 656, s. 7; 1985 (Reg. Sess., 1986), c. 853, s. 1; 1987, c. 778, s. 1; 1987 (Reg. Sess., 1988), c. 1015, s. 2; 1989, c. 36, s. 2; 1989 (Reg. Sess., 1990), c. 981, s. 2; 1991, c. 30, s. 2; c. 689, s. 250; 1991 (Reg. Sess., 1992), c. 922, s. 3; 1993, c. 12, s. 4; c. 354, s. 11; c. 485, s. 5; 1997-118, s. 4; 1998-98, ss. 60, 76; 1999-337, s. 20; 2000-173, s. 8; 2001-327, s. 2(b); 2002-126, s. 30G.2(b); 2005-435, s. 59.2(a); 2006-66, s. 24A.2(a); 2006-162, ss. 3(b), 22; 2008-107, s. 28.7(a); 2014-3, ss. 14.1, 14.26; 2015-6, s. 2.3; 2015-241, s. 32.15(a); 2016-5, s. 1.7(a); 2017-204, s. 1.1; 2018-5, s. 38.2(a); 2019-187, s. 1(e).)

Notes of Decisions

Cited in 8 cases, 1945–2004 · leading case: A & F Trademark, Inc. v. Tolson, 605 S.E.2d 187 (N.C. Ct. App. 2004).

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A & F Trademark, Inc. v. Tolson, 605 S.E.2d 187 (N.C. Ct. App. 2004). · cites it 2× “For franchise tax purposes, “doing business” is defined as “[e]ach and every act, power, or privilege exercised or enjoyed in this State, as an incident to, or by virtue of the powers and privileges granted by the laws of this State.”

Et & Wnc Transp. Co. v. Currie, 104 S.E.2d 403 (N.C. 1958). · cites it 2× “” Section 105-114 of this article explicitly states the nature of this tax: “The taxes levied in this article upon persons and partnerships are for the privilege of engaging in business or doing the act named.”

S. Bell Tel. & Tel. Co. v. Clayton, 147 S.E.2d 195 (N.C. 1966). “G.S. 105-114. The amount of the tax varies with “the nature and magnitude of the privilege taxed, the relative financial returns to be expected of the business or activities under franchise, and the burden put on government in regulating, protecting and fostering the enterprise.”

Duke Power Co. v. Bowles, 48 S.E.2d 287 (N.C. 1948). “Compare G. S., 105-114 (franchise tax) and G. S., 105-33 (license tax).”

Proposed Assessment of Additional Franchise Tax for the Taxable Quarters Ended March 31, 1980 v. Carolina Tel. & Tel. Co., 344 S.E.2d 46 (N.C. Ct. App. 1986). “Subsequently it was specifically defined as a tax on “rentals, other similar charges, and tolls received from business.”

First Carolina Investors v. Lynch, 337 S.E.2d 691 (N.C. Ct. App. 1985). · cites it 7× “In its first assignment of error the plaintiff argues that it does not meet the statutory requirements for assessment of the *585 North Carolina franchise tax because it is not a corporation within the definition of that term in G.S. 105-114, which provides in pertinent part:…”

Fertilizer Co. v. . Gill, Comr. of Revenue, 35 S.E.2d 275 (N.C. 1945). “, which provides for the collection of a franchise tax, the Commissioner of Eevenue is authorized to review any return and assess such additional tax as he may determine to be due at any time within three years after the time when the return was due. However, it is expressly…”

Sec'y OF REV. v. Carolina Tel. & Tel. Co., 344 S.E.2d 46 (N.C. Ct. App. 1986). “Subsequently it was specifically defined as a tax on "rentals, other similar charges, and tolls received from business.”

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