NC S652

Allow small businesses with cumulative gross receipts not exceeding $10,000,000 to deduct deposits to a capital improvement account from North Carolina taxable income.

Limit deductions to 5% of adjusted gross income up to $1,000,000, 2% of adjusted gross income between $1,000,000 and $2,000,000, and 1% of adjusted gross income between $2,000,000 and $3,000,000.

Require capital improvement account deposits be held at federally insured banking institutions and used solely for improvements that add value to real property, prolong useful life at least 10 years, or adapt property to new uses exclusively for the small business.

Require taxpayers to add back to income any previously deducted amounts that were withdrawn and not used for qualifying capital improvements.

Make the act effective for taxable years beginning on or after January 1, 2019.