A BILL TO BE ENTITLED
AN ACT to create a tax credit for new jobs created by small businesses.
The General Assembly of North Carolina enacts:
SECTION 1.  Article 3J of Subchapter I of Chapter 105 of the General Statutes is reenacted as it existed immediately before its repeal and reads as rewritten:
"Article 3J.
"Tax Credits for Growing Businesses.
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"§ 105‑129.81.  Definitions.
The following definitions apply in this Article:
(1)	Agrarian growth zone. – Defined in G.S. 143B‑437.010.

	
(5)	Company headquarters. – Defined in G.S. 143B‑437.01.

(8)	Development tier. – The classification assigned to an area pursuant to G.S. 143B‑437.08.
	
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(14)	Long‑term unemployed worker. – An individual that has been totally unemployed for at least the preceding 26 consecutive weeks as evidenced by records maintained by the Division of Employment Security (DES) of the Department of Commerce.
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(23a)	Small business. – A taxpayer that employs no more than 50 eligible employees throughout the taxable year and that is engaged in a business other than retail trade, as designated by sectors 44 and 45 of NAICS, or food services and drinking places, as designated by subsector 722 of NAICS.
(24)	Urban progress zone. – The classification assigned to an area pursuant to G.S. 143B‑437.09.

"§ 105‑129.82.  Sunset; studies.
(a)	Sunset. – This Article is repealed effective for business activities that occur on or after January 1, 2020.
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"§ 105‑129.83.  Eligibility; forfeiture.

	

	

	

	
	
(b)	Company Headquarters Eligibility. – A taxpayer is eligible for a credit under this Article with respect to a company headquarters only if the taxpayer creates at least 75 new jobs at the company headquarters within a 24‑month period. A taxpayer that meets this job creation requirement is eligible for credits under this Article with respect to the company headquarters for three taxable years beginning with the year in which the job creation requirement is satisfied.
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"§ 105‑129.84.  Tax election; cap; carryforwards; limitations.
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(c)	Carryforward. – Unless a longer carryforward period applies, any unused portion of a credit allowed under G.S. 105‑129.87 may be carried forward for the succeeding five years.
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"§ 105‑129.85.  Fees and reports.
(a)	Fee. – When filing a return for a taxable year in which the taxpayer engaged in activity for which the taxpayer is eligible for a credit under this Article, the taxpayer shall pay the Department of Revenue a fee of five hundred dollars ($500.00) for the credit the taxpayer claims or intends to claim with respect to an establishment. The fee is due at the time the return is due for the taxable year in which the taxpayer engaged in the activity for which the taxpayer is eligible for a credit. No credit is allowed under this Article for a taxable year until all outstanding fees have been paid. Fees collected under this section shall be credited to the General Fund.
(b)	Report. – The Department must include in the economic incentives report required by G.S. 105‑256 the following information itemized by credit and by taxpayer:
(1)	The number and amount of credits generated and taken for each credit allowed in this Article.
(2)	The number and development tier area of new jobs with respect to which credits were generated and to which credits were taken.

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"§ 105‑129.87.  Credit for creating jobs.
(a)	Credit. – A taxpayer that is a small business that meets the eligibility requirements set out in G.S. 105‑129.83 and that satisfies the threshold requirement for new job creation in this State under subsection (b) of this section during the taxable year, is allowed a credit for creating jobs. The amount of the credit for each new job created is set out in the table below and is based on the development tier designation of the county in which the job is located. If the job is located in an urban progress zone or an agrarian growth zone and is created by a taxpayer other than a small business, the amount of the credit is increased by an additional one thousand dollars ($1,000) per job. In addition, if the job is located in an urban progress zone or an agrarian growth zone and filled by a resident of that zone or by a long‑term unemployed worker or is created by a small business, the amount of the credit is increased by an additional two thousand dollars ($2,000) per job.
Area Development Tier	Amount of Credit
Tier One	$12,500
Tier Two	5,000
Tier Three	750"
(b)	Threshold. – The applicable threshold is the appropriate amount set out in the following table based on the development tier designation of the county where the new jobs are created during the taxable year. If the taxpayer creates new jobs at more than one eligible establishment in a county during the taxable year, the threshold applies to the aggregate number of new jobs created at all eligible establishments within the county during that year. If the taxpayer creates new jobs at eligible establishments in different counties during the taxable year, the threshold applies separately to the aggregate number of new jobs created at eligible establishments in each county. If the taxpayer creates new jobs in an urban progress zone, a port enhancement zone, or an agrarian growth zone, the applicable threshold is the one for a development tier one area. New jobs created in an urban progress zone, a port enhancement zone, or an agrarian growth zone are not aggregated with jobs created at any other eligible establishments regardless of county.
Area Development Tier	Threshold
Tier One 	5
Tier Two	10
Tier Three	15
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SECTION 2.  This act is effective for taxable years beginning on or after January 1, 2015.