North Carolina SB 351: Raise Out-of-State/Lower In-State UNC Tuition.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 351

Short Title: Right to Start Act. (Public)
Sponsors: Senator Chaudhuri (Primary Sponsor).
Referred to: Rules and Operations of the Senate
March 20, 2025
*S351-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO ALLOW CORPORATIONS LESS THAN FIVE YEARS OLD AND HAVING A 2
NET INCOME OF LESS THAN FIVE THOUSAND DOLLARS TO DEFER INCOME 3
TAXES FOR ONE YEAR AND TO PROVIDE THAT STATE AGENCIES ARE 4
ENCOURAGED TO USE IN-STATE CONTRACTORS WHO HAVE BEEN IN 5
OPERATION FOR LESS THAN FIVE YEARS AND THE DEPARTMENT OF 6
ADMINISTRATION SHALL COLLECT AND REPORT DATA ON THE USE OF THOSE 7
CONTRACTORS TO THE GENERAL ASSEMBLY. 8
The General Assembly of North Carolina enacts: 9
SECTION 1.(a) G.S. 105-130.19 reads as rewritten: 10
"§ 105-130.19. When tax must be paid. 11
(a) Except as provided in subsection (a1) of this section and Article 4C of this Chapter, 12
the full amount of the tax payable as shown on the return must be paid to the Secretary within 13
the time allowed for filing the return. 14
(a1) A corporation may defer the full amount of tax payable under this Part to the next 15
taxable year if the corporation has been in existence less than five years and files a return under 16
this Part showing a State net income of less than five thousand dollars ($5,000) for the taxable 17
year. 18
...." 19
SECTION 1.(b) G.S. 105-131.1A reads as rewritten: 20
"§ 105-131.1A. Taxation of S Corporation as a taxed pass-through entity. 21
... 22
(b) Taxable Income of Taxed S Corporation. – A tax is imposed for the taxable period on 23
the North Carolina taxable income of a taxed S Corporation. The tax shall be levied, collected, 24
and paid annually. annually, unless otherwise provided for by this section. The tax is imposed on 25
the North Carolina taxable income at the rate levied in G.S. 105-153.7. The North Carolina 26
taxable income of a taxed S Corporation is determined as follows: 27
... 28
(g) Payment of Tax. – Except as provided in subsection (g1) of this section and Article 29
4C of this Chapter, the full amount of the tax payable as shown on the return of the taxed S 30
Corporation must be paid to the Secretary within the time allowed for filing the return. In the 31
case of any overpayment by a taxed S Corporation of the tax imposed under this section, only 32
the taxed S Corporation may request a refund of the overpayment. If the taxed S Corporation 33
files a return showing an amount due with the return and does not pay the amount shown due, 34
the Department may collect the tax from the taxed S Corporation pursuant to G.S. 105-241.22(1). 35
The Secretary must issue a notice of collection for the amount of tax debt to the taxed S 36

General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 351-First Edition
Corporation. If the tax debt is not paid to the Secretary within 60 days of the date the notice of 1
collection is mailed to the taxed S Corporation, the shareholders of the S Corporation are not 2
allowed the deduction provided in G.S. 105-153.5(c3)(1). The Secretary must send the 3
shareholders a notice of proposed assessment in accordance with G.S. 105-241.9. For purposes 4
of this subsection, the term "tax debt" has the same meaning as defined in G.S. 105-243.1(a). 5
(g1) An S Corporation may defer the full amount of tax payable under this Part to the next 6
taxable year if the S Corporation has been in existence less than five years and files a return under 7
this Part showing a State net income of less than five thousand dollars ($5,000) for the taxable 8
year. 9
...." 10
SECTION 1.(c) G.S. 105-157 reads as rewritten: 11
"§ 105-157. When tax must be paid. 12
(a) Except as otherwise provided in this section and in Article 4A of this Chapter, the full 13
amount of the tax payable as shown on the return must be paid to the Secretary within the time 14
allowed for filing the return. If the amount shown to be due is less than one dollar ($1.00), no 15
payment need be made. 16
(b) Repealed by Session Laws 1993, c. 450, s. 4. 17
(c) A business entity may defer the full amount of tax payable under this Part to the next 18
taxable year if the business entity has been in existence less than five years and files a return 19
under this Part showing a State net income of less than five thousand dollars ($5,000) for the 20
taxable year. For purposes of this subsection, a "business entity" includes all of the following: 21
(1) A limited liability company. 22
(2) A partnership. 23
(3) A taxed partnership." 24
SECTION 2.(a) G.S. 143-48 reads as rewritten: 25
"§ 143-48. State policy; cooperation in promoting the use of small contractors, minority 26
contractors, physically handicapped contractors, and women contractors; goods 27
and services contracts; purpose; required annual reports. 28
(a) Policy. – It is the policy of this State to encourage and promote the use of small 29
contractors, minority contractors, physically handicapped contractors, and women contracto