AN ACT to allow banks to exclude interest, fees, and penalties received from certain loans from the total receipts calculation in this state for the income year.

The General Assembly of North Carolina enacts:

SECTION 1.  G.S. 105‑130.4B reads as rewritten:

§ 105‑130.4B.  Market‑based sourcing for banks.

(a)        Definitions. – The definitions in G.S. 105‑130.4 apply to this section, and the following definitions apply to this section:

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(8)        Loan secured by real property. – A loan or other obligation of which fifty percent (50%) or more of the aggregate value of the collateral used to secure the loan or other obligation, when valued at fair market value as of the time the original loan or obligation was incurred, was real property. The term does not include loans secured by (i) agricultural land as defined in G.S. 105‑277.2 or (ii) loans secured by a single‑family residence that is the principal residence of its occupant, as that term is defined in section 121 of the Code, and meets the following requirements:

a.         Is located in North Carolina in a rural area as defined by the United States Department of Agriculture.

b.         Is not within a metropolitan statistical area.

c.         Has a population of 2,500 or fewer, based upon the most recent Certified County Population Estimates from the State Demographer in the Office of State Budget and Management.

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SECTION 2.  This act is effective for taxable years beginning on or after January 1, 2023.