Discussion:NC Credit for Donated Oyster Shells
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Discussion Forum Index --> Tax Questions --> NC Credit for Donated Oyster Shells
| 9 December 2006 | |
| Anyone familiar with this "strange" credit?
G.S. 105-151.30 states "A taxpayer who claims the credit must add back to taxable income any amount deducted under the Code for the donation of the oyster shell." I'm confused about what this means. | |
| 9 December 2006 | |
| Maybe it's like the fuel tax credit, where you take the credit one year and it's income the next? Or, remember the NC Business Tax Credit (The B one) where you could take a credit one year but had to include it in income the next (I think this only applied to C corps)? | |
| 9 December 2006 | |
| It means you don't get both a deduction and a credit for the same expenditure.
Here's a link to an article describing what they do with these oyster shells: http://www.ncfisheries.net/shellfish/recycle1.htm North Carolina allows a credit against the corporate or personal income tax of $1 per bushel of oyster shells donated to the Division of Marine Fisheries for recycling. To prevent a double benefit, a taxpayer claiming the credit must add back to federal taxable income the market value of the donated shell (which, I suppose, could be more or less than $1 per bushel). NCGS Sec. 105-134.6(5a). Also, the taxpayer may not claim a charitable contribution deduction for the value of the shells. The addback is similar in concept to the federal income tax rules requiring addback of research and experimental costs to the extent of the credit claimed -- so the taxpayer doesn't get BOTH a deduction AND a credit for the same expense. | |
| 9 December 2006 | |
| Thanks LJA. I was also thinking it may be handled like the fuel tax credit. Only difference though is that total fuel cost is deducted on federal, then TP gets refund of tax from NC, so I understand (and hopefully have gotten my clients to finally understand that principle), BUT, there will be no ded. on the federal for the oyster shell donation. So why would that have to be added back to income. I probably don't have any clients who have actually donated shells in 06 but wanted to be clear on how it will work. | |
| 11 December 2006 | |
| I may have to quit responding to these since I seem to be getting so much wrong. Anyway, I think I/you confused what I was saying. The fuel tax credit and the NC Bus Tax Credit are two different issues. The fuel tax credit is federal and the 103B credits for NC are NC only, credit and add-back. Too confusing, always was. | |
