Bill > S455

This bill provides a new tax deduction for small businesses in North Carolina, allowing them to deduct up to $75,000 of net business income from their state tax returns. To qualify as a "small business" under this legislation, a company must be independently owned and operated, have 50 or fewer total employees (including employees of related persons), and have annual revenues below $5 million. For married couples filing joint tax returns, each spouse can claim up to $75,000 in deductions, with a total maximum deduction of $150,000. Importantly, the bill specifies that passive income is not eligible for this deduction. The tax relief provision will become effective for taxable years beginning on or after January 1, 2026, giving small businesses a potentially significant tax break that could help improve their financial resilience and encourage economic growth at the local level.

https://www.ncleg.gov/BillLookUp/2025/S455