NC S627

Creates a state income tax deduction for small businesses (gross receipts up to $10 million) that deposit funds into a designated capital improvement account at a federally insured bank

Deduction limits are tiered: 5% of adjusted gross income up to $1 million, 2% of AGI from $1-2 million, and 1% of AGI from $2-3 million

Funds must be used solely for improvements that add value to real property owned and used exclusively by the business, extend the property's useful life by at least 10 years, or adapt the property to new business uses

Withdrawals not used for qualifying capital improvements must be added back to taxable income in the year of withdrawal

Effective for taxable years beginning on or after January 1, 2025