§ 105-129.89. (See notes) Credit for investment in real property. - North Carolina Statutes

§ 105‑129.89.  (Seenotes) Credit for investment in real property.

(a)        Credit. – If ataxpayer that has purchased or leased real property in a development tier onearea begins to use the property in an eligible business during the taxableyear, the taxpayer is allowed a credit equal to thirty percent (30%) of theeligible investment amount if all of the eligibility requirements of G.S. 105‑129.83and of subsection (b) of this section are met. For the purposes of thissection, property is located in a development tier one area if the area theproperty is located in was a development tier one area at the time the taxpayermade a written application for the determination required under subsection (b)of this section. The eligible investment amount is the lesser of (i) the costof the property and (ii) the amount by which the cost of all of the realproperty the taxpayer is using in this State in an eligible business on thelast day of the taxable year exceeds the cost of all of the real property thetaxpayer was using in this State in an eligible business on the last day of thebase year. The base year is that year, of the three immediately precedingtaxable years, in which the taxpayer was using the most real property in thisState in an eligible business. In the case of property that is leased, the costof the property is not determined as provided in G.S. 105‑129.81 but isconsidered to be the taxpayer's lease payments over a seven‑year period,plus any expenditures made by the taxpayer to improve the property before it isused by the taxpayer if the expenditures are not reimbursed or credited by thelessor. The entire credit may not be taken for the taxable year in which theproperty is first used in an eligible business but shall be taken in equalinstallments over the seven years following the taxable year in which theproperty is first used in an eligible business. When part of the property isfirst used in an eligible business in one year and part is first used in aneligible business in a later year, separate credits may be claimed for theamount of property first used in an eligible business in each year. The basisin any real property for which a credit is allowed under this section shall bereduced by the amount of credit allowable.

(b)        Determination by theSecretary of Commerce. – A taxpayer is eligible for the credit allowed underthis section with respect to an establishment only if the Secretary of Commercemakes a written determination that the taxpayer is expected to purchase orlease and use in an eligible business at that establishment within a three‑yearperiod at least ten million dollars ($10,000,000) of real property and that theestablishment that is the subject of the credit will create at least 200 newjobs within two years of the time that the property is first used in aneligible business. If the taxpayer fails to timely make the required level ofinvestment or fails to timely create the required number of new jobs, thetaxpayer forfeits the credit as provided in G.S. 105‑129.83.

(c)        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.

(d)        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 (c) 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. 105‑129.84.

(e)        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 or G.S. 105‑129.12A.(2006‑252,s. 1.1.)