HB 467 reenacts North Carolina's low-income housing tax credit program, allowing developers to claim tax credits for constructing or rehabilitating affordable housing. It specifies credit percentages (30%, 20%, or 10%) based on the income level of households (50% or less of area median income for 30% credit, 40% for 10% in high-income areas) and the location's income designation (low, moderate, or high-income county/city). Developers can receive credits either as a direct tax refund or a loan from the Housing Finance Agency, with affordability requirements applying for the full credit compliance period. This directly affects developers building qualifying low-income housing projects across North Carolina.
SB 521 creates a 35% nonrefundable income tax credit for investment entities (like partnerships or S-corps) that fund small, newly formed businesses focused on community infrastructure and resilience. Eligible businesses must be under five years old, employ 25 or fewer people in North Carolina, generate $2 million or less in annual revenue, and primarily work on projects like improving roads, utilities, disaster preparedness, or sustainable energy. The credit limits total annual state spending to $5 million and caps individual credits at $100,000 per year, with unused credits carryable for up to 10 years. This policy aims to incentivize private investment in community-focused small businesses through tax benefits, not direct government funding.
SB 455, the Main Street Resilience Act, provides North Carolina small businesses with a new income tax deduction starting in 2026. It allows eligible small businesses to deduct up to $75,000 of their net business income from taxable income each year, with married couples filing jointly able to deduct up to $150,000 total. To qualify, a business must have fewer than 50 total employees (including related entities) and annual revenue under $5 million, excluding passive income. This deduction directly reduces tax liability for qualifying small businesses operating in North Carolina.
SB 510 exempts menstrual products like tampons, sanitary napkins, panty liners, and menstrual cups from North Carolina's sales tax. The bill amends state tax law (G.S. 105-164.13) to specifically include these products in the list of tax-exempt items, effective October 1, 2025. It directly affects all consumers purchasing these products in North Carolina, removing a sales tax burden. The change applies to all retailers selling these items in the state, with no additional requirements or mechanisms beyond the tax code update. This is a straightforward policy change focusing on reducing costs for menstrual product buyers.
SB 627 allows North Carolina small businesses with annual gross receipts under $10 million to reduce their state income tax by deducting funds deposited into a special capital improvement account. Businesses can deduct up to 5% of their adjusted gross income (capped at $1 million), 2% (up to $2 million), or 1% (up to $3 million) for qualifying property improvements like upgrades that add value, extend property life by 10+ years, or adapt property for new business uses. Funds must be deposited into a federally insured bank account and used solely for these improvements; unused funds must be added back to taxable income. The bill takes effect for tax years beginning January 1, 2025, and directly affects small businesses making eligible capital investments.
SB 621 reinstates a temporary sales tax exemption for school supplies in North Carolina, effective July 1, 2025. The bill reenacts G.S. 105-164.13C, which exempts qualifying items like notebooks, pens, and backpacks from state sales tax during a designated period each year. This directly affects families purchasing school supplies for children, reducing their out-of-pocket costs. The policy change is limited to tax relief for specific items and does not alter education funding or curriculum.
SB 660 increases the property tax exemption for disabled veterans in North Carolina from $45,000 to $75,000 of home value, effective for taxes starting July 2025. It also allows 100% disabled veterans to exclude their primary vehicle from property tax and creates a prequalification process to determine eligibility before purchasing a home. Local governments will be reimbursed by the state for 50% of revenue losses from these exemptions, capped at 1% of their general fund revenue. The bill directly affects North Carolina residents who are 100% disabled veterans or surviving spouses of such veterans.
HB 544 creates a 40% state tax credit for businesses that spend at least $10 million rehabilitating eligible historic corporate campuses in North Carolina. To qualify, properties must be certified historic sites (listed on the National Register and locally designated), formerly served as corporate headquarters, occupy at least 20 acres, have an 80% vacancy rate for two years, and meet preservation requirements. The credit applies to rehabilitation costs incurred on or after January 1, 2026, and is tied to federal credit eligibility. This policy directly affects businesses planning major renovations of qualifying historic corporate properties.
HB 604 creates two grant programs to support economic development: the Rural Community Development Grant Program and the Downtown Revitalization Grant Program. Both programs allocate $40 million each from the state budget for 2025-2026, providing grants to local governments (counties and municipalities) to fund projects that improve community amenities like grocery stores, childcare, parks, or downtown infrastructure. Grants require a 1:1 local match, max $2 million per award, and must align with comprehensive plans for revitalization or community growth. The programs aim to reverse rural depopulation, attract business investment, and enhance downtown livability through targeted, competitive funding.
HB 617 creates a $20 million grant program for North Carolina small farmers with gross income under $300,000, funding equipment (like harvest machinery), infrastructure (such as fencing), and cold storage. It also lowers the income threshold for farm sales tax exemption from $10,000 to $7,500 annually, expanding eligibility for tax relief. The bill directly affects small farmers meeting these income criteria by providing financial support through grants and reduced tax burdens. Grants require applications and prioritize those facing economic hardship, with funding allocated for specific purposes like equipment and the FarmsSHARE program.
