AN ACT to provide tax incentives for small businesses to hire north carolina Workers.

Whereas, according to the U.S. Census Bureau, citing the Small Business Administration Office of Advocacy, as of January 2021, in the United States, almost 25 million small businesses have zero employees and approximately 5.3 million small businesses have between one and 19 employees; and

Whereas, across all employer establishments in North Carolina, 85% are small firms with one to 19 employees and will see the most severe impacts from COVID‑19; and

Whereas, about 56% of all small employer establishments are in primary or secondary high‑risk industry sectors; and

Whereas, about two out of three North Carolina businesses having between 20 and 99 employees are impacted by COVID‑19 and are in primary or secondary high‑risk industry sectors; and

Whereas, approximately 1,473,397 North Carolinians have filed for unemployment benefits between March 15, 2020, when coronavirus‑related closures started going into place and March 29, 2021, and approximately $10,904,203,433 has been paid for claims effective as of March 15, 2020; Now, therefore,

The General Assembly of North Carolina enacts:

SECTION 1.  Article 3B of Chapter 105 of the General Statutes is amended by adding a new section to read:

§ 105‑129.16K.  Credit for hiring State residents.

(a)        Small Business Credit. – An eligible small business that hires an employee who is a North Carolina resident is allowed a credit under this section. The amount of the credit for a full‑time qualifying employee is equal to the product of seven thousand five hundred dollars ($7,500) multiplied by a fraction, the numerator of which is the number of weeks the employee worked at least 35 hours and the denominator of which is 52. The amount of the credit for a part‑time qualifying employee is equal to the product of three thousand seven hundred fifty dollars ($3,750) multiplied by a fraction, the numerator of which is the number of weeks the employee worked at least 20 hours but less than 35 hours and the denominator of which is 52. If an employee worked both full‑time and part‑time weeks, the sum of the calculations set forth in this subsection is the credit allowed for that employee.

(b)        Restaurant Credit. – An eligible restaurant that hires a delivery driver who is a North Carolina resident is allowed a credit under this section. The amount of the credit for a full‑time delivery driver is equal to the product of three thousand five hundred dollars ($3,500) multiplied by a fraction, the numerator of which is the number of weeks the delivery driver worked at least 35 hours and the denominator of which is 52. The amount of the credit for a part‑time delivery driver is equal to the product of one thousand seven hundred fifty dollars ($1,750) multiplied by a fraction, the numerator of which is the number of weeks the delivery driver worked at least 20 hours but less than 35 hours and the denominator of which is 52. If a delivery driver worked both full‑time and part‑time weeks, the sum of the calculations set forth in this subsection is the credit allowed for that delivery driver.

(c)        Definitions. – The following definitions apply in this section:

(1)        Eligible restaurant. – A restaurant properly registered and licensed to do business as a restaurant in the State and subject to income tax under Article 4 of this Chapter.

(2)        Eligible small business. – A business, other than an eligible restaurant, with cumulative gross receipts from business activity for the taxable year not in excess of one million dollars ($1,000,000), having fewer than 99 employees, and subject to income tax under Article 4 of this Chapter.

SECTION 2.  This act is effective for taxable years beginning on or after January 1, 2021, and expires for taxable years beginning on or after January 1, 2022.