What is the Departments current position regarding Nexus in North Carolina: “Physical Presence” vs. “Economic Presence?
The Department’s current position concerning nexus is to administer the rule as amended November 2, 1992. Except for an amendment effective January 1, 1994, which removed ambiguous language in the first paragraph, North Carolina’s Doing Business Rule, 17 NCAC 5C .0102, has not changed since November 2, 1992. In 1992, the Department clarified the language of the original rule pertaining to income producing property in this state. The original rule dated back to February 1, 1976. Originally, subdivision .0102(5) stated simply that “the owning, renting, or operating of business or income-producing property (real or personal) in North Carolina” would be considered to be doing business in this state. The 1992 revision includes more specific examples of the types of income producing property that create nexus. Those examples include: (i) realty; (ii) tangible personal property; (iii) trademarks, tradenames, franchise rights, computer programs, copyrights, patented processes, and licenses. Ad
