Bill > S627

This bill creates a new tax deduction for small businesses in North Carolina that deposit money into a designated capital improvement account. Specifically, the bill allows small businesses (defined as businesses with annual gross receipts up to $10 million) to deduct a percentage of their deposits to a capital improvement account from their state income taxes. The deduction is tiered: businesses can deduct 5% of deposits up to $1 million of adjusted gross income, 2% of deposits between $1-2 million, and 1% of deposits between $2-3 million. The capital improvement account must be at a federally insured bank and can only be used for specific property improvements that add value, extend the property's useful life by at least 10 years, or adapt the property for new business uses. If funds are withdrawn and not used for these approved improvements, the previously claimed tax deduction must be added back to the business's taxable income. The bill will take effect for tax years beginning on or after January 1, 2025, providing a new financial incentive for small businesses to invest in their physical infrastructure and property.

https://www.ncleg.gov/BillLookUp/2025/S627