New Law Clarifies Tax Treatment of Incentive Grants
Concerns about the corporate tax treatment of state job-creation grants have been addressed through legislation recently passed by the General Assembly and signed into law by Governor Roy Cooper. HB 399, which deals primarily with the renewal of historic preservation tax credits, allows North Carolina taxpayers to deduct economic development incentive payments when calculating North Carolina taxable income. “This highly technical, highly nuanced area of the tax code had the potential to adversely impact the state’s competitive positioning,” says Commerce Secretary Tony Copeland. “But HB 399 clarifies the bottom-line benefits new and expanding companies can expect from grant programs like JDIG and One North Carolina.” HB 399 passed unanimously in the NC Senate on October 24 and by an overwhelming majority in the NC House the same day. Governor Cooper signed the legislation on November 1.