§ 105-129.12A. (See Editor's note for repeal) Credit for substantial investment in other property. - North Carolina Statutes

§ 105‑129.12A.  (SeeEditor's note for repeal) Credit for substantial investment in other property.

(a)        Credit. – If ataxpayer that has purchased or leased real property in an enterprise tier oneor two area begins to use the property in an eligible business during thetaxable year, the taxpayer is allowed a credit equal to thirty percent (30%) ofthe eligible investment amount if all of the eligibility requirements of G.S.105‑129.4 are met. For the purposes of this section, property is locatedin an enterprise tier one or two area if the area the property is located inwas an enterprise tier one or two area at the time the taxpayer applied for thedetermination required under G.S. 105‑129.4(b5). The eligible investmentamount is the lesser of (i) the cost of the property and (ii) the amount bywhich the cost of all of the real property the taxpayer is using in this Statein an eligible business on the last day of the taxable year exceeds the cost ofall of the real property the taxpayer was using in this State in an eligiblebusiness on the last day of the base year. The base year is that year, of thethree immediately preceding taxable years, in which the taxpayer was using themost real property in this State in an eligible business. In the case of propertythat is leased, the cost of the property is not determined as provided in G.S.105‑129.2 but is considered to be the taxpayer's lease payments over aseven‑year period, plus any expenditures made by the taxpayer to improvethe property before it is used by the taxpayer if the expenditures are notreimbursed or credited by the lessor. The entire credit may not be taken forthe taxable year in which the property is first used in an eligible businessbut shall be taken in equal installments over the seven years following thetaxable year in which the property is first used in an eligible business. Whenpart of the property is first used in an eligible business in one year and partis first used in an eligible business in a later year, separate credits may beclaimed for the amount of property first used in an eligible business in eachyear. The basis in any real property for which a credit is allowed under thissection shall be reduced by the amount of credit allowable.

(b)        Mixed Use Property.– If the taxpayer uses only part of the property in an eligible business, theamount of the credit allowed under this section is reduced by multiplying it bya fraction, the numerator of which is the square footage of the property usedin an eligible business and the denominator of which is the total squarefootage of the property.

(c)        Expiration. – If,in one of the seven years in which the installment of a credit accrues, theproperty with respect to which the credit was claimed is no longer used in aneligible business, the credit expires and the taxpayer may not take anyremaining installment of the credit. If, in one of the seven years in which theinstallment of a credit accrues, part of the property with respect to which thecredit was claimed is no longer used in an eligible business, the remaininginstallments of the credit shall be reduced by multiplying it by the fractiondescribed in subsection (b) of this section. If, in one of the years in whichthe installment of a credit accrues and by which the taxpayer is required tohave created 200 new jobs at the property, the total number of employees thetaxpayer employs at the property with respect to which the credit is claimed isless than 200, the credit expires and the taxpayer may not take any remaininginstallment of the credit.

In each of these cases, thetaxpayer may nonetheless take the portion of an installment that accrued in aprevious year and was carried forward to the extent permitted under G.S. 105‑129.5.

(d)        No Double Credit. –A taxpayer may not claim a credit under this section with respect to realproperty for which a credit is claimed under G.S. 105‑129.12. (2001‑476, s. 13(a);2002‑72, s. 13.)