NC S745

Allows small businesses to deduct deposits to a capital improvement account from North Carolina state taxable income at tiered rates: 5% of adjusted gross income up to $1,000,000, 2% above $1,000,000 up to $2,000,000, and 1% above $2,000,000 up to $3,000,000.

Defines a small business as one with cumulative gross receipts not exceeding $10,000,000 for the taxable year.

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

Requires taxpayers to add back any previously deducted amounts that were withdrawn and not used for qualifying improvements in subsequent tax years.

Effective for taxable years beginning on or after January 1, 2020.