NC S738

Allows banks to exclude interest, fees, and penalties received from certain loans when calculating total receipts for North Carolina state income tax purposes.

Exempts loans secured by agricultural land as defined in G.S. 105-277.2 from the exclusion.

Exempts loans secured by single-family residences that serve as the principal residence of occupants and meet three criteria: located in a rural area as defined by the United States Department of Agriculture, not within a metropolitan statistical area, and have a population of 2,500 or fewer based on State Demographer estimates.

Applies to loans where 50% or more of the aggregate collateral value is real property, valued at fair market value at the time the original loan was incurred.

Effective for taxable years beginning on or after January 1, 2023.