North Carolina SB 354: Revise Auditor's Responsibilities.-AB

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 354

Short Title: NC Breakthrough Act. (Public)
Sponsors: Senators Theodros and Blue (Primary Sponsors).
Referred to: Rules and Operations of the Senate
March 20, 2025
*S354-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO REENACT AND MODIFY THE RESEARCH AND DEVELOPMENT TAX 2
CREDIT. 3
The General Assembly of North Carolina enacts: 4
SECTION 1. Article 3F of Chapter 105 of the General Statutes is reenacted as it 5
existed immediately before its repeal and reads as rewritten: 6
"Article 3F. 7
"Research and Development. 8
"§ 105-129.50. Definitions. 9
The definitions in section 41 of the Code apply in this Article. In addition, the following 10
definitions apply in this Article: 11
(1) Development tier one area. – Defined in G.S. 143B-437.08. 12
(2) Full-time job. – Defined in G.S. 105-129.81. 13
... 14
(4) North Carolina university research expenses. – Any amount the taxpayer paid 15
or incurred to a research university for qualified research performed in this 16
State or basic research performed in this State. 17
... 18
(5) Period of measurement. – Defined in the Small Business Size Regulations of 19
the federal Small Business Administration. 20
(6) Qualified North Carolina research expenses. – Qualified research expenses, 21
other than North Carolina university research expenses, for research 22
performed in this State. 23
(7) Receipts. – Defined in the Small Business Size Regulations of the federal 24
Small Business Administration. 25
(8) Related person. – Defined in G.S. 105-163.010.A person described in one of 26
the relationships set forth in section 267(b) or 707(b) of the Code. 27
(9) Research university. – An institution of higher education that meets one or 28
both of the following conditions: 29
a. It is classified as one of the following in the most recent edition of "A 30
Classification of Institutions of Higher Education", the official report 31
of The Carnegie Foundation for the Advancement of Teaching: 32
1. Doctoral/Research Universities, Extensive or Intensive. 33
2. Masters Colleges and Universities, I or II. 34
3. Baccalaureate Colleges, Liberal Arts or General. 35
b. It is a constituent institution of The University of North Carolina. 36

General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 354-First Edition
(10) Small business. – A business whose annual receipts, combined with the annual 1
receipts of all related persons, for the applicable period of measurement did 2
not exceed one million dollars ($1,000,000). 3
"§ 105-129.51. Taxpayer standards and sunset. 4
(a) Taxpayer Standards. – A taxpayer is eligible for a credit allowed in this Article if it 5
satisfies the requirements of G.S. 105-129.83(c), subsections (d), (e), (f), and (g) and (h) of this 6
section relating to wage standard, health insurance, environmental impact, safety and health 7
programs, and overdue tax debts, respectively. 8
(b) Sunset. – This Article is repealed for taxable years beginning on or after January 1, 9
2016.2040. 10
(c) Repealed by Session Laws 2004-124, s. 32D.4, effective for taxable years beginning 11
on or after January 1, 2006. 12
(d) Wage Standard. – A taxpayer is eligible for a credit under this Article in a 13
development tier two or three area only if the taxpayer satisfies a wage standard. The taxpayer is 14
not required to satisfy a wage standard if the activity occurs in a development tier one area. Jobs 15
that are located within an urban progress zone, a port enhancement zone, or an agrarian growth 16
zone but not in a development tier one area satisfy the wage standard if they pay an average 17
weekly wage that is at least equal to ninety percent (90%) of the lesser of the average wage for 18
all insured private employers in the State and the average wage for all insured private employers 19
in the county. All other jobs satisfy the wage standard if they pay an average weekly wage that 20
is at least equal to the lesser of one hundred ten percent (110%) of the average wage for all 21
insured private employers in the State and ninety percent (90%) of the average wage for all 22
insured private employers in the county. The Department of Commerce shall annually publish 23
the wage standard for each county. 24
In making the wage calculation, the taxpayer shall include any jobs that were filled for at 25
least 1,600 hours during the calendar year the taxpayer engages in the activity that qualifies for 26
the credit even if those jobs are not filled at the time the taxpayer claims the credit. For a taxpayer 27
with a taxable year other than a calendar year, the taxpayer shall use the wage standard for the 28
calendar year in which the taxable year begins. Only full-time jobs are included when making 29
the wage calculation. 30
(e) Health Insurance. – A taxpayer is eligible for a credit under this Article only if the 31
taxpayer provides health insurance for all of the full-time jobs at the establishment with respect 32
to which