NC H899

Establishes a tiered approach to small business income tax rates in North Carolina, phased in over three years starting in 2011.

For taxable years beginning January 1, 2011: Small business net income tax rate cannot exceed corporate rate by more than 2 percent.

For taxable years beginning January 1, 2012: Reduces the differential to 1 percent above the corporate rate.

For taxable years beginning January 1, 2013: Eliminates the differential entirely, making small business income tax rate equal to the corporate rate under G.S. 105-130.3.

Defines a small business as one with cumulative gross receipts not exceeding $850,000 in a taxable year, excluding passive income.