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House to Consider Bill Preserving Fair Audits for NC Employers

| Tort Reform & Legal Climate

Members of the House Finance Committee last week gave their approval to Senate Bill 682 (Modify Sunsets Re: Contingent Audits), a bill that will ensure businesses undergoing tax evaluations by local municipalities continue to receive a fair shake in the auditing process. The bill – which previously passed the Senate with unanimous support – is now expected to move to the House floor for consideration. The North Carolina Chamber commends the House Finance Committee for supporting a fair auditing process for employers, and we urge members of the House to lend their approval to this vital JOBS Agenda bill.

We recognize the importance of audits in providing certainty to state and local governments in the evaluation of an organization’s tax liability. North Carolina’s job creators are looking for a fair and predictable auditing process. And until recent years, the state and many local government units engaged the practice of contingency fee audits for tax assessment purposes, a practice that incentivized auditors to extend a taxpayer’s liability as larger settlements could be awarded for higher assessments. Senate Bill 682 protects businesses from contingency audits by extending legislation passed in 2012 requiring counties and municipalities to pay for audits of businesses on a flat-fee or hourly-fee basis.

Objectivity and certainty for both the public and private sectors are essential ingredients for a competitive state economy. Again, we respectfully ask House members to pass Senate Bill 682, preserving a fair and predictable tax auditing process for North Carolina employers. We will continue to update you on the progress of this bill as it advances in the General Assembly.