§ 105-130.5C.  Adjustments when State decouples from federal first-year expensing of domestic research and experimental expenditures.

(a) Expense Deduction Adjustment. - A taxpayer who takes a deduction for domestic research and experimental expenditures under section 174A(a) of the Code must add to the taxpayer's federal taxable income eighty percent (80%) of the amount taken for that year under that Code provision. A taxpayer is allowed to deduct twenty-five percent (25%) of the add-back in each of the first four taxable years following the year the taxpayer is required to include the add-back in income. The purpose of this section is to decouple from the allowance of full first-year expensing of domestic research and experimental expenditures under section 70302 of the One Big Beautiful Bill Act.

(b) Asset Basis. - The adjustments made in this section do not result in a difference in basis of the affected assets for State and federal income tax purposes.  (2026-31, s. 12(b).)