GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S D
SENATE BILL DRS15248-MCf-163
Short Title: Clean Energy Workforce & Innovation Act. (Public)
Sponsors: Senators Theodros and Salvador (Primary Sponsors).
Referred to:
*DRS15248 -MCf-163*
A BILL TO BE ENTITLED 1
AN ACT TO ENACT THE CLEAN ENERGY WORKFORCE AND INNOVATION ACT. 2
The General Assembly of North Carolina enacts: 3
SECTION 1.(a) Article 10 of Chapter 143B of the General Statutes is amended by 4
adding a new Part to read: 5
"Part 8A. Clean Energy. 6
"§ 143B-451.2. Clean energy workforce and innovation. 7
(a) Title, purpose. – This Part shall be known and may be cited as "The Clean Energy 8
Workforce and Innovation Act". The purpose of this Act is to accomplish the following: 9
(1) Develop a skilled workforce in this State to support the deployment of 10
advanced nuclear energy, small modular reactors, and related clean energy 11
technologies and facilities. 12
(2) Accelerate clean energy innovation by streamlining regulatory processes for 13
small modular reactors and associated infrastructure, ensuring North Carolina 14
remains a leader in reliable, low-carbon energy. 15
(3) Expand economic opportunities in energy transition by investing in workforce 16
training, apprenticeships, and educational partnerships that equip North 17
Carolinians for high-paying, sustainable careers. 18
(4) Ensure equitable access to clean energy jobs by prioritizing workforce 19
development programs in communities affected by fossil fuel plant closures, 20
economically distressed areas, and underrepresented groups in the energy 21
sector. 22
(b) Definitions. – The following definitions apply in this Part. 23
(1) Department. – The Department of Commerce. 24
(2) Energy sector skilled trade. – Operator certification, welding, precision 25
machining, grid integration and energy storage expertise, nuclear fuel 26
management, electrical work, instrumentation and control systems 27
capabilities, cyber security, reactor maintenance, or any other trade or 28
occupation related to nuclear energy facilities or generation that does not 29
require a four-year college degree. 30
(3) Institution of higher education. – Any public university, community college, 31
or technical training school in North Carolina offering programs in nuclear 32
technology, engineering, or energy-sector skilled trades. 33
(4) Small Modular Reactor (SMR). – A nuclear reactor with a capacity of less 34
than 500 megawatts per unit, designed for modular construction and advanced 35
safety features, including passive safety systems using natural cooling 36
FILED SENATE
Mar 25, 2025
S.B. 546
PRINCIPAL CLERK General Assembly Of North Carolina Session 2025
Page 2 DRS15248-MCf-163
mechanisms to prevent overheating; underground or sealed containment 1
systems; automatic fail-safe shutdown mechanisms; smaller core and lower 2
power density componentry; fuel choices that are accident tolerant or capable 3
of withstanding higher temperatures with lower risk; and security measures 4
reducing risks from sabotage, aircraft impact, or other external threats. 5
(c) Clean Energy Workforce Development Program. – There is established in the 6
Department of Commerce the Clean Energy Workforce Development Program (Program). The 7
Program shall be comprised of the following elements: 8
(1) Workforce development. – In conjunction with The University of North 9
Carolina and the Community Colleges System Office, the Department shall 10
develop a grant program for institutions of higher education in this State to 11
expedite and facilitate the expansion of nuclear technology and clean energy 12
training programs. The Department shall (i) develop guidelines for an 13
application process for institutions of higher education for the allocation of 14
funds granted pursuant to this section and (ii) prioritize awarding funds based 15
on the degree to which the institution has shown in the application the 16
following: 17
a. A viable plan to partner and create learning synergies with industry 18
leaders and employers to align training and real-world clean energy 19
needs. 20
b. The funding will be used for nuclear energy workforce needs, 21
including energy sector skilled trades. 22
(2) Apprenticeship development. – In conjunction with The University of North 23
Carolina and the Community Colleges System Office, the Department shall 24
develop a grant program for subsidizing the costs of qualifying employers for 25
paid apprenticeship positions for students in institutions of higher education 26
in the State in order to promote direct-to-hire pathways for participating 27
students to be prepared for and immediately fill nuclear energy industry 28
workforce needs. A qualifying employer is an employer currently operating 29
nuclear energy facilities in the State or in another state and construction 30
companies and other entities identified by such employers as having the 31
technical capabilities necessary to design, construct, and maintain nuclear 32
reactors and equipment for nuclear energy generation. The Department shall 33
(i) develop guidelines for an application process for qualifying employers for 34
the allocation of funds granted pursuant to this section and (ii) prioritize 35
awarding funds based on the degree to which the employer has shown, in the 36
application or otherwise, the following: 37
a. A viable plan to partner and create learning synergies and pre- and 38
post-graduation employment opportunities for student attending 39
institutions of higher education in the State. 40
b. The funding will be used to subsidize the total cost of the paid 41
apprenticeship program created by the qualifying employer and 42
stipends to participating apprentices to offset living costs. 43
c. The funding will be used to benefit economically disadvantaged 44
students. For purposes of this sub-subdivision, an economically 45
disadvantaged student is one that meets any one or more of the 46
following: 47
1. Qualifies for and receives a federal Pell Grant. 48
2. Is a dependent in a household with income below (i) eighty 49
percent (80%) of the state median income or (i) the federal 50
poverty line. 51 General Assembly Of North Carolina Session 2025
DRS15248-MCf-163 Page 3
3. Is a recipient of Supplemental Nutrition Assistance Program 1
(SNAP) or Temporary Assistance for Needy Families (TANF). 2
4. Is a child of parents or guardians who did not earn a 3
postsecondary degree. 4
5. Residing in a development tier one area, as defined in 5
G.S. 143B-437.08. 6
6. Has been displaced, and is transitioning, from a career in coal, 7
oil, or gas industry jobs and is pursuing educational 8
advancement for nuclear energy career needs. 9
d. A history of hiring participating apprentices, economically 10
disadvantaged employment applicants, and students graduating in 11
relevant fields from institutions of higher education. 12
(3) Educational assistance. – In conjunction with The University of North 13
Carolina and the Community Colleges System Office, the Department shall 14
develop a scholarship program for students attending institutions of higher 15
education in this State to offset the cost of tuition and materials for degrees or 16
certifications in nuclear engineering, electrical engineering, energy sector 17
skilled trades, and public health radiation protection programs. The 18
Department shall (i) develop guidelines for an application process for students 19
of institutions of higher education for the allocation of funds granted pursuant 20
to this section and (ii) prioritize awarding funds based the degree of need in 21
the State for the designated coursework, degree, or certification for which the 22
scholarship is sought. The scholarship assistance program shall include 23
financial assistance for workers in the energy sector that have been displaced 24
by the closure of a coal-fired plant that are seeking to transition skills to 25
nuclear energy generation and technologies. 26
(4) Veteran initiative. – In conjunction with The University of North Carolina, the 27
Community Colleges System Office, and the Department of Military and 28
Veterans Affairs, the Department shall develop a fast-track initiative for 29
qualifying veterans to facilitate and expedite training, licensure, and transition 30
into civilian nuclear energy careers. A qualifying veteran is a veteran of a 31
branch of the armed forces of the United States, with priority being given to 32
those having naval or other nuclear operations experience. The initiative shall 33
include a scholarship component for veterans attending institutions of higher 34
education in this State to offset the cost of relocation, tuition and materials for 35
degrees, licensure, or certifications in nuclear engineering and related nuclear 36
technologies, certification exams, and specialized career coaching. The 37
Department shall (i) develop guidelines for an application process for 38
qualifying veterans for the allocation of funds granted pursuant to this section 39
and (ii) prioritize awarding funds based on relevance of nuclear operations in 40
military service and financial- and merit-based factors determined by the 41
Department. 42
SECTION 1.(b) Nuclear Innovation Zones. – The Department of Commerce, in 43
collaboration with the Department of Environmental Quality, the Utilities Commission, and any 44
other State agency or entity the Department of Commerce deems relevant, shall conduct a sbtudy 45
on the feasibility and potential benefits of establishing Nuclear Innovation Zones in the State. 46
This study shall include the following: 47
(1) The feasibility of attracting investment and job creation through regulatory 48
streamlining of permitting nuclear energy production, including related 49
manufacturing sectors. 50
(2) Potential incentives to encourage private-sector participation. 51 General Assembly Of North Carolina Session 2025
Page 4 DRS15248-MCf-163
(3) A review of existing State and federal regulations affecting nuclear energy 1
development and possible reforms to streamline approval processes while 2
ensuring public safety. 3
(4) Site Selection Criteria for potential nuclear energy generating facilities, 4
including identification of key factors in determining suitable locations such 5
as proximity to existing energy infrastructure, workforce availability and 6
training programs, and community impact and local government 7
considerations. 8
(5) A review of environmental best practices and necessary safeguards and an 9
evaluation of potential impacts on air, water, and land use. 10
(6) A survey of other states' efforts, including examination of successful nuclear 11
energy development policies and recommendations based on best practices 12
and lessons learned. 13
(7) A review of potential State-backed financial mechanisms for nuclear 14
deployment. 15
The Department of Commerce shall submit a final report with findings and 16
recommendations to the Joint Legislative Commission on Energy Policy and the General 17
Assembly no later than December 31, 2025. 18
SECTION 2. Article 3J of Chapter 105 of the General Statutes is reenacted as it 19
existed immediately before its repeal and reads as rewritten: 20
"Article 3J. 21
Tax Credits for Growing Businesses. 22
"§ 105-129.80. Legislative findings. 23
The General Assembly finds that: 24
(1) It is the policy of the State of North Carolina to stimulate economic activity 25
and to create new jobs for the citizens of the State by encouraging and 26
promoting the expansion of existing business and industry within the State 27
and by recruiting and attracting new business and industry to the State. 28
(2) Both short-term and long-term economic trends at the State, national, and 29
international levels have made the successful implementation of the State's 30
economic development policy and programs both more critical and more 31
challenging, and the decline in the State's traditional industries, and the 32
resulting adverse impact upon the State and its citizens, have been exacerbated 33
in recent years by adverse national and State economic trends that contribute 34
to the reduction in the State's industrial base and that inhibit the State's ability 35
to sustain or attract new and expanding businesses. 36
(3) The economic condition of the State is not static, and recent changes in the 37
State's economic condition have created economic distress that requires a 38
reevaluation of certain existing State programs and the enactment of a new 39
program as provided in this Article that is designed to stimulate new economic 40
activity and to create new jobs within the State. 41
(4) The enactment of this Article is necessary to stimulate the economy and create 42
new jobs in North Carolina, and this Article will promote the general welfare 43
and confer, as its primary purpose and effect, benefits on citizens throughout 44
the State through the creation of new jobs, an enlargement of the overall tax 45
base, an expansion and diversification of the State's industrial base, and an 46
increase in revenue to the State and its political subdivisions. 47
(5) The purpose of this Article is to stimulate economic activity and to create new 48
jobs within the State. 49
(6) The State is in need of a focused tax credit program that encourages and 50
facilitates economic growth and development within the State. 51 General Assembly Of North Carolina Session 2025
DRS15248-MCf-163 Page 5
(7) The resources of the State are not evenly distributed throughout the State and 1
different communities have different abilities and needs in attracting and 2
maintaining new and expanding business and industry. 3
"§ 105-129.81. (See notes) Definitions. 4
The following definitions apply in this Article: 5
(1) Agrarian growth zone. – Defined in G.S. 143B-437.010. 6
(2) Air courier services. – Defined in G.S. 143B-437.01. 7
(3) Aircraft maintenance and repair. – The provision of specialized maintenance 8
or repair services for commercial aircraft or the rebuilding of commercial 9
aircraft. 10
(4) Business property. – Tangible personal property that is used in a business and 11
capitalized by the taxpayer for tax purposes under the Code. 12
(4a) Clean energy manufacturing. – The manufacture in this State of small modular 13
reactors, small modular reactor components, reactor modules, or nuclear fuel 14
assemblies. 15
(5) Company headquarters. – Defined in G.S. 143B-437.01. 16
(6) Cost. – In the case of property owned by the taxpayer, cost is determined 17
pursuant to regulations adopted under section 1012 of the Code. In the case of 18
property the taxpayer leases from another, cost is value as determined 19
pursuant to G.S. 105-130.4(j)(2). 20
(7) Customer service call center. – The provision of support service by a business 21
to its customers by telephone or other electronic means to support products or 22
services of the business. For the purposes of this definition, an establishment 23
is primarily engaged in providing support services by telephone or other 24
electronic means only if at least sixty percent (60%) of its calls are incoming 25
or at least sixty percent (60%) of its other electronic communications are 26
initiated by its customers. 27
(8) Development tier. – The classification assigned to an area pursuant to 28
G.S. 143B-437.08. 29
(9) Electronic shopping and mail order houses. – An industry in electronic 30
shopping and mail order houses industry group 4541 as defined by NAICS. 31
(9a) Environmental disqualifying event. – Any of the following occurrences: 32
a. During the tax year in which the activity occurred for which a credit is 33
being claimed, a civil penalty was assessed against the taxpayer by the 34
Department of Environmental Quality for failure to comply with an 35
order issued by an agency of the Department to abate or remediate a 36
violation of any program administered by the agency. 37
b. During the tax year in which the activity occurred for which a credit is 38
being claimed or in the prior two tax years, any of the following: 39
1. A finding was made by the Department of Environmental 40
Quality that the taxpayer knowingly and willfully, as defined 41
in G.S. 143-215.6B, including all limitations thereto, 42
committed a violation of any program implemented by an 43
agency of the Department. 44
2. An assessment for damages to fish or wildlife pursuant to 45
G.S. 143-215.3(a)(7) was made against the taxpayer. 46
3. A judicial order for injunctive relief was issued against the 47
taxpayer in connection with a violation of any program 48
implemented by an agency of the Department of 49
Environmental Quality. 50 General Assembly Of North Carolina Session 2025
Page 6 DRS15248-MCf-163
c. During the tax year in which the activity occurred for which the credit 1
is being claimed or in the prior four tax years, a criminal penalty was 2
imposed on the taxpayer in connection with a violation of any program 3
implemented by an agency of the Department of Environmental 4
Quality. 5
(10) Establishment. – Defined in 29 C.F.R. § 1904.46, as it existed on January 1, 6
2002. 7
(11) Full-time job. – A position that requires at least 1,600 hours of work per year 8
and is intended to be held by one employee during the entire year. A full-time 9
employee is an employee who holds a full-time job. 10
(12) Hub. – Defined in G.S. 105-164.3. 11
(13) Information technology and services. – Defined in G.S. 143B-437.01. 12
(14) Long-term unemployed worker. – An individual that has been totally 13
unemployed for at least the preceding 26 consecutive weeks as evidenced by 14
records maintained by the Division of Employment Security (DES) of the 15
Department of Commerce. 16
(15) Manufacturing. – Defined in G.S. 143B-437.01. 17
(16) Motorsports facility. – A motorsports racetrack classified in the United States 18
racetrack national industry 711212, as defined by NAICS. 19
(17) Motorsports racing team. – A professional racing team primarily engaged in 20
the research and development, design, manufacture, repair, maintenance, and 21
operation of motor vehicles used in live motorsports racing events before a 22
paying audience. 23
(18) NAICS. – Defined in G.S. 105-228.90. 24
(19) New job. – A full-time job that represents a net increase in the number of the 25
taxpayer's employees statewide. A new employee is an employee who holds 26
a new job. The term does not include a job currently located in this State that 27
is transferred to the business from a related member of the business. 28
(20) Overdue tax debt. – Defined in G.S. 105-243.1. 29
(20a) Port enhancement zone. – Defined in G.S. 143B-437.013. 30
(21) Purchase. – Defined in section 179 of the Code. 31
(21a) Qualifying clean energy manufacturer. – A manufacturer of small modular 32
reactors, small modular reactor components, reactor modules, or nuclear fuel 33
assemblies located in this State. 34
(22) Related member. – Defined in G.S. 105-130.7A. 35
(23) Research and development. – An industry in scientific research and 36
development services industry group 5417 as defined by NAICS. 37
(24) Urban progress zone. – The classification assigned to an area pursuant to 38
G.S. 143B-437.09. 39
(25) Warehousing. – Defined in G.S. 143B-437.01. 40
(26) Wholesale trade. – Defined in G.S. 143B-437.01. 41
"§ 105-129.82. (See notes) Sunset; studies. 42
(a) Sunset. – This Article is repealed effective for business activities that occur on or after 43
January 1, 2014. 44
(b) Equity Study. – The Department of Commerce shall study the effect of the tax 45
incentives provided in this Article on tax equity. This study shall include the following: 46
(1) Reexamining the formula in G.S. 143B-437.08 used to define development 47
tiers, to include consideration of alternative measures for more equitable 48
treatment of counties in similar economic circumstances. 49
(2) Considering whether the assignment of tiers and the applicable thresholds are 50
equitable for smaller counties. 51 General Assembly Of North Carolina Session 2025
DRS15248-MCf-163 Page 7
(3) Compiling any available data on whether expanding North Carolina 1
businesses receive fewer benefits than out-of-State businesses that locate to 2
North Carolina. 3
(c) Impact Study. – The Department of Commerce shall study the effectiveness of the tax 4
incentives provided in this Article. This study shall include: 5
(1) Studying the distribution of tax incentives across new and expanding 6
businesses and industries. 7
(2) Examining data on economic recruitment for the period from 2005 through 8
the most recent year for which data are available by county, by industry type, 9
by size of investment, and by number of jobs, and other relevant information 10
to determine the pattern of business locations and expansions before and after 11
the enactment of this Article. 12
(3) Measuring the direct costs and benefits of the tax incentives. 13
(4) Compiling available information on the current use of incentives by other 14
states and whether that use is increasing or declining. 15
(d) Report. – The Department of Commerce shall report the results of these studies and 16
its recommendations to the General Assembly biennially with the first report due by June 1, 17
2009.2026. 18
"§ 105-129.83. Eligibility; forfeiture. 19
(a) Eligible Business. – A taxpayer is eligible for a credit under this Article only with 20
respect to activities occurring at an establishmenta location whose primary activity is listed in 21
this subsection. clean energy manufacturing. The primary activity of an establishmenta location 22
is determined based on the establishment's location's principal product or group of products 23
produced or distributed, or services rendered. 24
(1) Air courier services hub. 25
(2) Aircraft maintenance and repair. 26
(3) Company headquarters, but only if the additional eligibility requirements of 27
subsection (b) of this section are satisfied. 28
(4) Customer service call centers. 29
(5) Electronic shopping and mail order houses. 30
(6) Information technology and services. 31
(7) Manufacturing. 32
(8) Motorsports facility. 33
(9) Motorsports racing team. 34
(10) Research and development. 35
(11) Warehousing. 36
(12) Wholesale trade. 37
(b) Company Headquarters Eligibility. – A taxpayer is eligible for a credit under this 38
Article with respect to a company headquarters only if the taxpayer creates at least 75 new jobs 39
at the company headquarters within a 24-month period. A taxpayer that meets this job creation 40
requirement is eligible for credits under this Article with respect to the company headquarters for 41
three taxable years beginning with the year in which the job creation requirement is satisfied. A 42
taxpayer that creates an additional 75 new jobs at the company headquarters in a 24-month period 43
during a three-year eligibility period does not qualify for any extended eligibility period. 44
However, a taxpayer that creates an additional 75 new jobs at the company headquarters in a 45
24-month period after the completion of a three-year eligibility period is eligible for credits with 46
respect to the company headquarters for an additional three taxable years beginning in the year 47
in which the additional job creation requirement is satisfied. 48
(c) Wage Standard. – A taxpayer is eligible for a credit under this Article in a 49
development tier two or three area only if the taxpayer satisfies a wage standard. The taxpayer is 50
not required to satisfy a wage standard if the activity occurs in a development tier one area. Jobs 51 General Assembly Of North Carolina Session 2025
Page 8 DRS15248-MCf-163
that are located within an urban progress zone, a port enhancement zone, or an agrarian growth 1
zone but not in a development tier one area satisfy the wage standard if they pay an average 2
weekly wage that is at least equal to ninety percent (90%) of the lesser of the average wage for 3
all insured private employers in the State and the average wage for all insured private employers 4
in the county. All other jobs satisfy the wage standard if they pay an average weekly wage that 5
is at least equal to the lesser of one hundred ten percent (110%) of the average wage for all 6
insured private employers in the State and ninety percent (90%) of the average wage for all 7
insured private employers in the county. The Department of Commerce shall annually publish 8
the wage standard for each county. 9
In making the wage calculation, the taxpayer shall include any jobs that were filled for at 10
least 1,600 hours during the calendar year the taxpayer engages in the activity that qualifies for 11
the credit even if those jobs are not filled at the time the taxpayer claims the credit. For a taxpayer 12
with a taxable year other than a calendar year, the taxpayer shall use the wage standard for the 13
calendar year in which the taxable year begins. Only full-time jobs are included when making 14
the wage calculation. 15
(d) Health Insurance. – A taxpayer is eligible for a credit under this Article only if the 16
taxpayer provides health insurance for all of the full-time jobs at the establishment location with 17
respect to which the credit is claimed when the taxpayer engages in the activity that qualifies for 18
the credit. For the purposes of this subsection, a taxpayer provides health insurance if it pays at 19
least fifty percent (50%) of the premiums for health care coverage that equals or exceeds the 20
minimum provisions of the basic health care plan of coverage recommended by the Small 21
Employer Carrier Committee pursuant to G.S. 58-50-125.requirements for small group health 22
benefit plans under State or federal law. 23
Each year that a taxpayer claims a credit or carryforward of a credit allowed under this 24
Article, the taxpayer shall provide with the tax return the taxpayer's certification that the taxpayer 25
continues to provide health insurance for all the jobs at the establishment location with respect 26
to which the credit was claimed. If the taxpayer ceases to provide health insurance for the jobs 27
during a taxable year, the credit expires, and the taxpayer may not take any remaining installment 28
or carryforward of the credit.expires. 29
(e) Environmental Impact. – A taxpayer is eligible for a credit allowed under this Article 30
only if the taxpayer certifies that, at the time the taxpayer claims the credit, there has not been a 31
final determination unfavorable to the taxpayer with respect to an environmental disqualifying 32
event. For the purposes of this section, a "final determination unfavorable to the taxpayer" occurs 33
when there is no further opportunity for the taxpayer to seek administrative or judicial appeal, 34
review, certiorari, or rehearing of the environmental disqualifying event and the disqualifying 35
event has not been reversed or withdrawn. No later than January 31 of each year, the Secretary 36
of Environmental Quality shall provide an annual report to the Department listing all 37
environmental disqualifying events for which a final determination unfavorable to the taxpayer 38
was made in the prior calendar year and shall provide the name of the taxpayer involved and the 39
date that the disqualifying event occurred. 40
(f) Safety and Health Programs. – A taxpayer is eligible for a credit allowed under this 41
Article only if the taxpayer certifies that, as of the time the taxpayer claims the credit, at the 42
establishment location with respect to which the credit is claimed, the taxpayer has no citations 43
under the Occupational Safety and Health Act that have become a final order within the past 44
three years for willful serious violations or for failing to abate serious violations. For the purposes 45
of this subsection, "serious violation" has the same meaning as in G.S. 95-127. The 46
Commissioner of Labor shall notify the Department of Revenue annually of all employers who 47
have had these citations become final orders within the past three years. 48
(g) Overdue Tax Debts. – A taxpayer is not eligible for a credit allowed under this Article 49
if, at the time the taxpayer claims the credit or an installment or carryforward of the credit, the 50 General Assembly Of North Carolina Session 2025
DRS15248-MCf-163 Page 9
taxpayer has received a notice of an overdue tax debt and that overdue tax debt has not been 1
satisfied or otherwise resolved. 2
(h) Expiration. – If, during the period that installments of a credit under this Article 3
accrue, the taxpayer is no longer engaged in one of the types of the business described in 4
subsection (a) of this section at the establishment location for which the credit was claimed, the 5
credit expires. If, during the period that installments of a credit under this Article accrue, the 6
number of jobs of an eligible company headquarters falls below the minimum number required 7
under subsection (b) of this section, any credit associated with that company headquarters 8
expires. When a credit expires, the taxpayer may not take any remaining installments of the 9
credit. The taxpayer may, however, take the portion of an installment that accrued in a previous 10
year and was carried forward to the extent permitted under G.S. 105-129.84. A change in the 11
development tier designation of the location of an establishmenta location does not result in 12
expiration of a credit under this Article. 13
(i) Forfeiture. – A taxpayer forfeits a credit allowed under this Article if the taxpayer was 14
not eligible for the credit for the calendar year in which the taxpayer engaged in the activity for 15
which the credit was claimed. A taxpayer forfeits a credit previously allowed under this Article 16
if a final determination unfavorable to the taxpayer with respect to an environmental 17
disqualifying event is made that is applicable to the year in which the activity occurred for which 18
the credit was claimed. In addition, a taxpayer forfeits a credit for investment in real property 19
under G.S. 105-129.89 if the taxpayer fails to timely create the number of required new jobs or 20
to timely make the required level of investment.investment under G.S. 105-129.89(b). A taxpayer 21
that forfeits a credit under this Article is liable for all past taxes avoided as a result of the credit 22
plus interest at the rate established under G.S. 105-241.21, computed from the date the taxes 23
would have been due if the credit had not been allowed. The past taxes and interest are due 30 24
days after the date the credit is forfeited; a taxpayer that fails to pay the past taxes and interest by 25
the due date is subject to the penalties provided in G.S. 105-236. 26
(j) Change in Ownership of Business. – As used in this subsection, the term "business" 27
means a taxpayer or an establishment.a location. The sale, merger, consolidation, conversion, 28
acquisition, or bankruptcy of a business, or any transaction by which an existing business 29
reformulates itself as another business, does not create new eligibility in a succeeding business 30
with respect to credits for which the predecessor was not eligible under this Article. A successor 31
business may, however, take any credit or carried-over portion of a credit that its predecessor 32
could have taken if it had a tax liability. The acquisition of a business is a new investment that 33
creates new eligibility in the acquiring taxpayer under this Article if any of the following 34
conditions are met: 35
(1) The business closed before it was acquired. 36
(2) The business was required to file a notice of plant closing or mass layoff under 37
the federal Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 38
2101, before it was acquired. 39
(3) The business was acquired by its employees directly or indirectly through an 40
acquisition company under an employee stock option transaction or another 41
similar mechanism. For the purpose of this subdivision, "acquired" means that 42
as part of the initial purchase of a business by the employees, the purchase 43
included an agreement for the employees through the employee stock option 44
transaction or another similar mechanism to obtain one of the following: 45
a. Ownership of more than fifty percent (50%) of the business. 46
b. Ownership of not less than forty percent (40%) of the business within 47
seven years if the business has tangible assets with a net book value in 48
excess of one hundred million dollars ($100,000,000) and has the 49
majority of its operations located in a development tier one area. 50 General Assembly Of North Carolina Session 2025
Page 10 DRS15248-MCf-163
(k) Advisory Ruling. – A taxpayer may request in writing from the Secretary of Revenue 1
specific advice regarding eligibility for a credit under this Article. G.S. 105-264 governs the 2
effect of this advice. A taxpayer may not legally rely upon advice offered by any other State or 3
local government official or employee acting in an official capacity regarding eligibility for a 4
credit under this Article. 5
(l) Planned Expansion. – A taxpayer that signs a letter of commitment with the 6
Department of Commerce, after the Department has calculated the development tier designations 7
for the next year but before the beginning of that year, to undertake specific activities at a specific 8
site within the next two years may calculate the credit for which it qualifies based on the 9
establishment's location's development tier designation and urban progress zone, port 10
enhancement zone, or agrarian growth zone designation in the year in which the letter of 11
commitment was signed by the taxpayer. If the taxpayer does not engage in the activities within 12
the two-year period, the taxpayer does not qualify for the credit; however, if the taxpayer later 13
engages in the activities, the taxpayer qualifies for the credit based on the development tier and 14
urban progress zone, port enhancement zone, or agrarian growth zone designations designation 15
in effect at that time. 16
(m) Qualified Capital Intensive Corporations. – A corporation that is a qualified capital 17
intensive corporation under G.S. 105-130.4(s1) is not eligible for any credit under this Article 18
with respect to the facility that satisfies the condition of subdivision (2) of that subsection. 19
"§ 105-129.84. (See notes) Tax election;liability eligibility; cap; carryforwards; limitations. 20
(a) Tax Election. –Liability Limitation. – The credits provided in this Article are allowed 21
against the franchise tax levied in Article 3 of this Chapter, the income taxes levied in Article 4 22
of this Chapter, and the gross premiums tax levied in Article 8B of this Chapter. The taxpayer 23
may divide a credit between the taxes against which it is allowed. Carryforwards of a credit may 24
be divided between the taxes against which it is allowed without regard to the original election 25
regarding the division of the credit. 26
(b) Cap. – The credits allowed under this Article may not exceed fifty percent (50%) of 27
the cumulative amount of taxes against which they may be claimed for the taxable year, reduced 28
by the sum of all other credits allowed against those taxes, except tax payments made by or on 29
behalf of the taxpayer. This limitation applies to the cumulative amount of credit, including 30
carryforwards, claimed by the taxpayer under this Article for the taxable year. 31
(c) Carryforward. – Unless a longer carryforward period applies, any unused portion of 32
a credit allowed under G.S. 105-129.87 or G.S. 105-129.88 may be carried forward for the 33
succeeding five years, and any unused portion of a credit allowed under G.S. 105-129.89 may be 34
carried forward for the succeeding 15 years. If the Secretary of Commerce makes a written 35
determination that the taxpayer is expected to purchase or lease, and place in service in 36
connection with an eligible business within a two-year period, at least one hundred fifty million 37
dollars ($150,000,000) worth of business and real property, any unused portion of a credit under 38
this Article with respect to the establishment that satisfies that condition may be carried forward 39
for the succeeding 20 years. If the taxpayer does not make the required level of investment, the 40
taxpayer shall apply the standard carryforward period rather than the 20-year carryforward 41
period. 42
(d) Statute of Limitations. – Notwithstanding Article 9 of this Chapter, a taxpayer shall 43
claim a credit under this Article within six months after the date set by statute for the filing of the 44
return, including any extensions of that date. 45
(e) Credit Treated as Tax Payment. – The owner of a pass-through entity that claims a 46
credit under this Article may treat some or all of the credit claimed as a tax payment made by or 47
on behalf of the taxpayer. A credit claimed that is treated as a tax payment is subject to all 48
provisions of this section. A credit claimed that is treated as a tax payment does not accrue interest 49
under G.S. 105-241.21 if the payment is determined to be an overpayment. A taxpayer that elects 50 General Assembly Of North Carolina Session 2025
DRS15248-MCf-163 Page 11
to have a credit claimed under this Article treated as a tax payment must make this election when 1
the return is filed. 2
"§ 105-129.85. (See notes) Fees and reports. 3
(a) Fee. – When filing a return for a taxable year in which the taxpayer engaged in activity 4
for which the taxpayer is eligible for a credit under this Article, the taxpayer shall pay the 5
Department of Revenue a fee of five hundred dollars ($500.00) for each type ofthe credit the 6
taxpayer claims or intends to claim with respect to an establishment.a location. The fee is due at 7
the time the return is due for the taxable year in which the taxpayer engaged in the activity for 8
which the taxpayer is eligible for a credit. No credit is allowed under this Article for a taxable 9
year until all outstanding fees have been paid. Fees collected under this section shall be credited 10
to the General Fund. 11
(b) Report. – The Department must include in the economic incentives report required by 12
G.S. 105-256 the following information itemized by credit and by taxpayer: 13
(1) The number and amount of credits generated and taken for each credit allowed 14
in this Article. 15
(2) The number and development tier area of new jobs with respect to which 16
credits were generated and to which credits were taken. 17
(3) The cost and development tier area of business property with respect to which 18
credits were generated and to which credits were taken. 19
(4) The cost and development tier area of real property investment with respect 20
to which credits were generated and to which credits were taken. 21
"§ 105-129.86. (See notes) Substantiation. 22
(a) Records. – To claim a credit allowed by this Article, the taxpayer shall provide any 23
information required by the Secretary of Revenue. Every taxpayer claiming a credit under this 24
Article shall maintain and make available for inspection by the Secretary of Revenue any records 25
the Secretary considers necessary to determine and verify the amount of the credit to which the 26
taxpayer is entitled. The burden of proving eligibility for the credit and the amount of the credit 27
shall rest upon the taxpayer, and no credit shall be allowed to a taxpayer that fails to maintain 28
adequate records or to make them available for inspection. 29
(b) Documentation. – Each taxpayer shall provide with the tax return qualifying 30
information for each credit claimed under this Article. The qualifying information shall be in the 31
form prescribed by the Secretary and shall be signed and affirmed by the individual who signs 32
the taxpayer's tax return. The information required by this subsection is information 33
demonstrating that the taxpayer has met the conditions for qualifying for a credit and any 34
carryforwards and includes the following: 35
(1) The physical location of the jobs and investment with respect to which the 36
credit is claimed, including the street address and the development tier 37
designation of the establishment.location. 38
(2) The type of business with respect to which the credit is claimed and the 39
average weekly wage at the establishment location with respect to which the 40
credit is claimed. 41
(3) Any other qualifying information related to a specific credit allowed under 42
this Article. 43
"§ 105-129.87. (See notes) Credit for creating jobs. 44
(a) Credit. – A taxpayer that meets the eligibility requirements set out in G.S. 105-129.83 45
and satisfies the threshold requirement for new job creation in this State under subsection (b) of 46
this section during the taxable year is allowed a credit for creating jobs. The amount of the credit 47
for each new job created is set out in the table below and is based on the development tier 48
designation of the county in which the job is located. If the job is located in an urban progress 49
zone, a port enhancement zone, or an agrarian growth zone, the amount of the credit is increased 50
by one thousand dollars ($1,000) per job. In addition, if a job located in an urban progress zone, 51 General Assembly Of North Carolina Session 2025
Page 12 DRS15248-MCf-163
a port enhancement zone, or an agrarian growth zone is filled by a resident of that zone or by a 1
long-term unemployed worker, the amount of the credit is increased by an additional two 2
thousand dollars ($2,000) per job. 3
Area Development Tier Amount of Credit 4
Tier One $12,500 5
Tier Two 5,000 6
Tier Three 750 7
(b) Threshold. – The applicable threshold is the appropriate amount set out in the 8
following table based on the development tier designation of the county where the new jobs are 9
created during the taxable year. If the taxpayer creates new jobs at more than one eligible 10
establishment in a county during the taxable year, the threshold applies to the aggregate number 11
of new jobs created at all eligible establishments within the county during that year. If the 12
taxpayer creates new jobs at eligible establishments in different counties during the taxable year, 13
the threshold applies separately to the aggregate number of new jobs created at eligible 14
establishments in each county. If the taxpayer creates new jobs in an urban progress zone, a port 15
enhancement zone, or an agrarian growth zone, the applicable threshold is the one for a 16
development tier one area. New jobs created in an urban progress zone, a port enhancement zone, 17
or an agrarian growth zone are not aggregated with jobs created at any other eligible 18
establishments regardless of county. 19
Area Development Tier Threshold 20
Tier One 5 21
Tier Two 10 22
Tier Three 15 23
(c) Calculation. – A job is located in a county, an urban progress zone, a port 24
enhancement zone, or an agrarian growth zone if more than fifty percent (50%) of the employee's 25
duties are performed in the county or the zone. The number of new jobs a taxpayer creates during 26
the taxable year is determined by subtracting the average number of full-time employees the 27
taxpayer had in this State during the 12-month period preceding the beginning of the taxable year 28
from the average number of full-time employees the taxpayer has in this State during the taxable 29
year. 30
(d) Installments. – The credit may not be taken in the taxable year in which the new jobs 31
are created. Instead, the credit shall be taken in equal installments over the four years following 32
the taxable year in which the new jobs were created and is conditional upon the continued 33
maintenance of those jobs by the taxpayer. If, in one of the four years in which the installment of 34
a credit accrues, a job is no longer filled, the credit with respect to that job expires, and the 35
taxpayer may not take any remaining installment of the credit with respect to that job. If, in one 36
of the years in which the installment of a credit accrues, the number of the taxpayer's full-time 37
employees falls below the sum of the applicable threshold and the number of full-time employees 38
the taxpayer had in the year before the year in which the taxpayer qualified for the credit, the 39
credits with respect to all of the new jobs expire, and the taxpayer may not take any remaining 40
installments of the credits. When a credit expires under this subsection, the taxpayer may, 41
however, take the portion of an installment that accrued in a previous year and was carried 42
forward to the extent permitted under G.S. 105-129.84. 43
(e) Transferred Jobs. – Jobs transferred from one area in the State to another area in the 44
State are not considered new jobs for purposes of this section. Jobs that were located in this State 45
and that are transferred to the taxpayer from a related member of the taxpayer are not considered 46
new jobs for purposes of this section. If, in one of the four years in which the installment of a 47
credit accrues, the job with respect to which the credit was claimed is moved to an area in a 48
higher-numbered development tier or out of an urban progress zone, a port enhancement zone, 49
or an agrarian growth zone, the remaining installments of the credit are allowed only to the extent 50
they would have been allowed if the job was initially created in the area to which it was moved. 51 General Assembly Of North Carolina Session 2025
DRS15248-MCf-163 Page 13
If, in one of the years in which the installment of a credit accrues, the job with respect to which 1
the credit was claimed is moved to an area in a lower-numbered development tier or an urban 2
progress zone, a port enhancement zone, or an agrarian growth zone, the remaining installments 3
of the credit shall be calculated as if the job had been created initially in the area to which it was 4
moved. 5
(f) Wage Standard. – For the purposes of this section, a taxpayer satisfies the wage 6
standard requirement of G.S. 105-129.83 only if the taxpayer satisfies the requirement with 7
respect to both the new jobs, considered collectively, for which a credit is claimed and all of the 8
jobs at the establishment, considered collectively, with respect to which a credit is claimed. 9
(g) No Double Credit. – A taxpayer may not claim a credit under this section with respect 10
to jobs for which a taxpayer claims a credit under G.S. 105-129.8. 11
"§ 105-129.88. (See notes) Credit for investing in business property. 12
(a) General Credit. – A taxpayer that meets the eligibility requirements set out in 13
G.S. 105-129.83 and that has purchased or leased business property and placed it in service in 14
this State during the taxable year and that has satisfied the threshold requirements of subsection 15
(c) of this section is allowed a credit equal to the applicable percentage of the excess of the 16
eligible investment amount over the applicable threshold. If the taxpayer places business property 17
in service in an urban progress zone, a port enhancement zone, or an agrarian growth zone, the 18
applicable percentage is the one for a development tier one area. Business property is eligible if 19
it is not leased to another party. The credit may not be taken for the taxable year in which the 20
business property is placed in service but shall be taken in equal installments over the four years 21
following the taxable year in which it is placed in service. The applicable percentage is as 22
follows: 23
Area Development Tier Applicable Percentage 24
Tier One 7% 25
Tier Two 5% 26
Tier Three 3.5% 27
(b) Eligible Investment Amount. – The eligible investment amount is the lesser of (i) the 28
cost of the eligible business property and (ii) the amount by which the cost of all of the taxpayer's 29
eligible business property that is in service in this State on the last day of the taxable year exceeds 30
the cost of all of the taxpayer's eligible business property that was in service in this State on the 31
last day of the base year. The base year is that year, of the three immediately preceding taxable 32
years, in which the taxpayer had the most eligible business property in service in this State. 33
(c) Threshold. – The applicable threshold is the appropriate amount set out in the 34
following table based on the development tier where the eligible business property is placed in 35
service during the taxable year. If the taxpayer places business property in service in an urban 36
progress zone, a port enhancement zone, or an agrarian growth zone, the applicable threshold is 37
the one for a development tier one area. Business property placed in service in an urban progress 38
zone, a port enhancement zone, or an agrarian growth zone is not aggregated with business 39
property placed in service at any other eligible establishments regardless of county. If the 40
taxpayer places eligible business property in service at more than one establishment in a county 41
during the taxable year, the threshold applies to the aggregate amount of eligible business 42
property placed in service during the taxable year at all establishments in the county. If the 43
taxpayer places eligible business property in service at establishments in different counties, the 44
threshold applies separately to the aggregate amount of eligible business property placed in 45
service in each county. If the taxpayer places eligible business property in service at an 46
establishment over the course of a two-year period, the applicable threshold for the second 47
taxable year is reduced by the eligible investment amount for the previous taxable year. 48
Area Development Tier Threshold 49
Tier One $ -0- 50
Tier Two 1,000,000 51 General Assembly Of North Carolina Session 2025
Page 14 DRS15248-MCf-163
Tier Three 2,000,000 1
(d) Expiration. – As used in this subsection, the term "disposed of" means disposed of, 2
taken out of service, or moved out of State. If, in one of the four years in which the installment 3
of a credit accrues, the business property with respect to which the credit was claimed is disposed 4
of, the credit expires, and the taxpayer may not take any remaining installment of the credit for 5
that business property unless the cost of that business property is offset in the same taxable year 6
by the taxpayer's new investment in eligible business property placed in service in the same 7
county, as provided in this subsection. If, during the taxable year, the taxpayer disposed of the 8
business property for which installments remain, there has been a net reduction in the cost of all 9
the taxpayer's eligible business property that are in service in the same county as the business 10
property that was disposed of, and the amount of this reduction is greater than twenty percent 11
(20%) of the cost of the business property that was disposed of, then the credit for the business 12
property that was disposed of expires. If the amount of the net reduction is equal to twenty percent 13
(20%) or less of the cost of the business property that was disposed of, or if there is no net 14
reduction, then the credit does not expire. In determining the amount of any net reduction during 15
the taxable year, the cost of business property the taxpayer placed in service during the taxable 16
year and for which the taxpayer claims a credit under Article 3A or Article 3B of this Chapter 17
may not be included in the cost of all the taxpayer's eligible business property that is in service. 18
If in a single taxable year business property with respect to two or more credits in the same county 19
are disposed of, the net reduction in the cost of all the taxpayer's eligible business property that 20
is in service in the same county is compared to the total cost of all the business property for which 21
credits expired in order to determine whether the remaining installments of the credits are 22
forfeited. 23
The expiration of a credit does not prevent the taxpayer from taking the portion of an 24
installment that accrued in a previous year and was carried forward to the extent permitted under 25
G.S. 105-129.84. 26
(e) Transferred Property. – If, in one of the four years in which the installment of a credit 27
accrues, the business property with respect to which the credit was claimed is moved to a county 28
in a higher-numbered development tier or out of an urban progress zone, a port enhancement 29
zone, or an agrarian growth zone, the remaining installments of the credit are allowed only to the 30
extent they would have been allowed if the business property had been placed in service initially 31
in the area to which it was moved. If, in one of the four years in which the installment of a credit 32
accrues, the business property with respect to which a credit was claimed is moved to a county 33
in a lower-numbered development tier or an urban progress zone, a port enhancement zone, or 34
an agrarian growth zone, the remaining installments of the credit shall be calculated as if the 35
business property had been placed in service initially in the area to which it was moved. 36
(f) Wage Standard. – For the purposes of this section, a taxpayer satisfies the wage 37
standard requirement of G.S. 105-129.83 only if the taxpayer satisfies the requirement with 38
respect to all of the jobs at the establishment, considered collectively, with respect to which a 39
credit is claimed. 40
(g) No Double Credit. – A taxpayer may not claim a credit under this section with respect 41
to business property for which the taxpayer claims a credit under G.S. 105-129.9 or 42
G.S. 105-129.9A. 43
"§ 105-129.89. (See notes) Credit for investment in real property. 44
(a) Credit. – If a taxpayer that has purchased or leased real property in a development tier 45
one area begins to use the property in an eligible business during the taxable year, the taxpayer 46
is allowed a credit equal to thirty percent (30%) of the eligible investment amount if all of the 47
eligibility requirements of G.S. 105-129.83 and of subsection (b) of this section are met. For the 48
purposes of this section, property is located in a development tier one area if the area the property 49
is located in was a development tier one area at the time the taxpayer made a written application 50
for the determination required under subsection (b) of this section. The eligible investment 51 General Assembly Of North Carolina Session 2025
DRS15248-MCf-163 Page 15
amount is the lesser of (i) the cost of the property and (ii) the amount by which the cost of all of 1
the real property the taxpayer is using in this State in an eligible business on the last day of the 2
taxable year exceeds the cost of all of the real property the taxpayer was using in this State in an 3
eligible business on the last day of the base year. The base year is that year, of the three 4
immediately preceding taxable years, in which the taxpayer was using the most real property in 5
this State in an eligible business. In the case of property that is leased, the cost of the property is 6
not determined as provided in G.S. 105-129.81 but is considered to be the taxpayer's lease 7
payments over a seven-year period, plus any expenditures made by the taxpayer to improve the 8
property before it is used by the taxpayer if the expenditures are not reimbursed or credited by 9
the lessor. The entire credit may not be taken for the taxable year in which the property is first 10
used in an eligible business but shall be taken in equal installments over the seven years following 11
the taxable year in which the property is first used in an eligible business. When part of the 12
property is first used in an eligible business in one year and part is first used in an eligible business 13
in a later year, separate credits may be claimed for the amount of property first used in an eligible 14
business in each year. The basis in any real property for which a credit is allowed under this 15
section shall be reduced by the amount of credit allowable. 16
(b) Determination by the Secretary of Commerce. – A taxpayer is eligible for the credit 17
allowed under this section with respect to an establishment only if the Secretary of Commerce 18
makes a written determination that the taxpayer is expected to purchase or lease and use in an 19
eligible business at that establishment within a three-year period at least ten million dollars 20
($10,000,000) of real property and that the establishment that is the subject of the credit will 21
create at least 200 new jobs within two years of the time that the property is first used in an 22
eligible business. If the taxpayer fails to timely make the required level of investment or fails to 23
timely create the required number of new jobs, the taxpayer forfeits the credit as provided in G.S. 24
105-129.83. 25
(c) Mixed Use Property. – If the taxpayer uses only part of the property in an eligible 26
business, the amount of the credit allowed under this section is reduced by multiplying it by a 27
fraction, the numerator of which is the square footage of the property used in an eligible business 28
and the denominator of which is the total square footage of the property. 29
(d) Expiration. – If, in one of the seven years in which the installment of a credit accrues, 30
the property with respect to which the credit was claimed is no longer used in an eligible business, 31
the credit expires, and the taxpayer may not take any remaining installment of the credit. If, in 32
one of the seven years in which the installment of a credit accrues, part of the property with 33
respect to which the credit was claimed is no longer used in an eligible business, the remaining 34
installments of the credit shall be reduced by multiplying it by the fraction described in subsection 35
(c) of this section. If, in one of the years in which the installment of a credit accrues and by which 36
the taxpayer is required to have created 200 new jobs at the property, the total number of 37
employees the taxpayer employs at the property with respect to which the credit is claimed is less 38
than 200, the credit expires, and the taxpayer may not take any remaining installment of the 39
credit. 40
In each of these cases, the taxpayer may nonetheless take the portion of an installment that 41
accrued in a previous year and was carried forward to the extent permitted under G.S. 42
105-129.84. 43
(e) No Double Credit. – A taxpayer may not claim a credit under this section with respect 44
to real property for which a credit is claimed under G.S. 105-129.12 or G.S. 105-129.12A. 45
"§ 105-129.90. Credit for clean energy manufacturing. 46
(a) Credit. – A qualifying clean energy manufacturer that (i) meets the eligibility 47
requirements set out in G.S. 105-129.83 and (ii) satisfies the requirements for new job creation 48
and investment under this subsection during the taxable year is allowed a credit for clean energy 49
manufacturing. The amount of the credit is equal to a percentage of the qualifying clean energy 50 General Assembly Of North Carolina Session 2025
Page 16 DRS15248-MCf-163
manufacturer's cumulative amount of income taxes for the taxable year for a number of years, as 1
follows: 2
Job Threshold Investment Threshold Years of Credit 3
25 $1,500,000 3 4
50 $2,500,000 4 5
100 $5,000,000 5 6
The applicable percentage is fifty percent (50%) if the location is a retired fossil fuel plant 7
site located in the State with existing transmission infrastructure and cooling water access, and 8
the applicable percentage is thirty percent (Y30) for any other location. 9
(b) Job Calculation Provisions. – The following provisions apply to the job threshold 10
provided in subsection (a) of this section: 11
(1) If the taxpayer creates new jobs at more than one eligible location 12
establishment in the State during the taxable year, the threshold applies to the 13
aggregate number of new jobs created at all eligible locations establishments 14
within the eligible counties during that year. 15
(2) A job is located in a county if more than fifty percent (50%) of the employee's 16
duties are performed in the county. The number of new jobs a taxpayer creates 17
during the taxable year is determined by subtracting the average number of 18
full-time employees the taxpayer had in this State during the 12-month period 19
preceding the beginning of the taxable year from the average number of 20
full-time employees the taxpayer has in this State during the taxable year. 21
(3) Jobs transferred from one area in the State to another area in the State are not 22
considered new jobs for purposes of this section. Jobs that were located in this 23
State and that are transferred to the taxpayer from a related member of the 24
taxpayer are not considered new jobs for purposes of this section. If the job 25
with respect to which the credit was claimed is moved to a development tier 26
three area, the remaining installments of the credit are not allowed. 27
(4) For the purposes of this section, a taxpayer satisfies the wage standard 28
requirement of G.S. 105-129.83 only if the taxpayer satisfies the requirement 29
with respect to both the new jobs, considered collectively, for which a credit 30
is claimed and all of the jobs at the location, considered collectively, with 31
respect to which a credit is claimed. 32
(c) Investment Provisions. – The following provisions apply to the investment threshold 33
provided in subsection (a) of this section: 34
(1) The investment threshold with private funds invested in the form of (i) 35
purchasing or leasing business property and placing it in service in this State 36
during the taxable year or (ii) purchasing or leasing real property in this State 37
and beginning to use the property during the taxable year. 38
(2) Business property is eligible if it is not leased to another party. The eligible 39
investment amount is the lesser of (i) the cost of the eligible business property 40
and (ii) the amount by which the cost of all of the taxpayer's eligible business 41
property that is in service in this State on the last day of the taxable year 42
exceeds the cost of all of the taxpayer's eligible business property that was in 43
service in this State on the last day of the base year. The base year is that year, 44
of the three immediately preceding taxable years, in which the taxpayer had 45
the most eligible business property in service in this State. If the taxpayer 46
places eligible business property in service at locations in different counties 47
and some of the locations are in development tier three areas, the investment 48
calculation will be reduced proportionately. If the taxpayer places eligible 49
business property in service at a location over the course of more than one 50 General Assembly Of North Carolina Session 2025
DRS15248-MCf-163 Page 17
year, the applicable threshold for each subsequent taxable year is reduced by 1
the eligible investment amount for the previous taxable years. 2
(3) Real property is located in the development tier area applicable to the county 3
at the time the taxpayer made a written application for the determination 4
required under this Article. The eligible investment amount is the lesser of (i) 5
the cost of the property and (ii) the amount by which the cost of all of the real 6
property the taxpayer is using in this State in an eligible business on the last 7
day of the taxable year exceeds the cost of all of the real property the taxpayer 8
was using in this State in an eligible business on the last day of the base year. 9
The base year is that year, of the three immediately preceding taxable years, 10
in which the taxpayer was using the most real property in this State in an 11
eligible business. In the case of property that is leased, the cost of the property 12
is considered to be the taxpayer's lease payments for the years for which the 13
credit is given, plus any expenditures made by the taxpayer to improve the 14
property before it is used by the taxpayer if the expenditures are not 15
reimbursed or credited by the lessor. When part of the property is first used in 16
one year and part is first used in a later year, separate credits may be claimed 17
for the amount of property first used in an eligible business in each year. The 18
basis in any real property for which a credit is allowed under this section shall 19
be reduced by the amount of credit allowable. If the taxpayer uses only part 20
of the property in clean energy manufacturing, the amount of the credit 21
allowed under this section is reduced by multiplying it by a fraction, the 22
numerator of which is the square footage of the property used in clean energy 23
manufacturing and the denominator of which is the total square footage of the 24
property. 25
(4) If, in one of the years in which the credit remains, the property with respect to 26
which the credit was claimed is no longer used in clean energy manufacturing, 27
the credit expires and the taxpayer is not allowed the credit in any years 28
remaining. If, in one of the years in which the credit remains, a part of the 29
property with respect to which the credit was claimed is no longer used in 30
clean energy manufacturing and that amount reduces the number of years 31
calculated for the credit, only remaining years for the lower calculation may 32
be claimed." 33
SECTION 3. Section 2 of this act is effective for taxable years beginning on or after 34
January 1, 2025. The remainder of this act is effective when it becomes law. 35