NC S589

Allows small businesses to deduct deposits to capital improvement accounts from North Carolina state taxable income, with tiered limits based on adjusted gross income: 5% up to $1,000,000, 2% from $1,000,000 to $2,000,000, and 1% from $2,000,000 to $3,000,000

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

Restricts capital improvement account funds to improvements that add value to real property, extend property useful life by at least 10 years, or adapt property to new uses, and requires accounts be held at federally insured banking institutions

Requires businesses to add back to taxable income any previously deducted amounts that were withdrawn from the capital improvement account and not used for qualified improvements

Effective for taxable years beginning on or after January 1, 2021