A BILL TO BE ENTITLED
AN ACT to create a tax credit for investment in manufacturing facilities.
The General Assembly of North Carolina enacts:
SECTION 1.  Part 1 of Article 4 of Chapter 105 of the General Statutes is amended by adding a new section to read:
"§ 105‑130.47.  Credit for investing in manufacturing facilities.
(a)	Definitions. – The following definitions apply in this section:
(1)	Construction costs. – The costs of constructing a new facility, including the costs of acquiring and improving land for the facility and equipping the facility.
(2)	Manufacturing. – Defined in G.S. 105‑129.2.
(3)	Manufacturing facility. – A facility where the primary activity is manufacturing. The facility may contain space for purposes ancillary to manufacturing.
(b)	Credit. – A taxpayer who constructs a new manufacturing facility or who expands an existing manufacturing facility by at least fifty percent (50%) of the space devoted to manufacturing is allowed a credit against the tax imposed by this Part. The amount of the credit is equal to three percent (3%) of the construction costs.
(c)	Limitation. – The credit allowed by this section may not exceed fifty percent (50%) of the amount of tax imposed by this Part for the taxable year reduced by the sum of all credits allowable, except tax payments made by or on behalf of the taxpayer. Any unused portion of a credit may be carried forward for the succeeding five years.
(d)	No Double Benefit. – A taxpayer who claims a credit under this section may not claim a credit under G.S. 105‑129.9 or G.S. 105‑129.12A with respect to the same property and may not claim a refund under G.S. 105‑164.14 with respect to the same construction costs.
(e)	Sunset. – This section is repealed for activities that occur on or after January 1, 2010."
SECTION 2.  Part 2 of Article 4 of Chapter 105 of the General Statutes is amended by adding a new section to read:
"§ 105‑151.29.  Credit for investing in manufacturing facilities.
(a)	Definitions. – The following definitions apply in this section.
(1)	Construction costs. – The costs of constructing a new facility, including the costs of acquiring and improving land for the facility and equipping the facility.
(2)	Manufacturing. – Defined in G.S. 105‑129.2.
(3)	Manufacturing facility. – A facility where the primary activity is manufacturing. The facility may contain space for purposes ancillary to manufacturing.
(b)	Credit. – A taxpayer who constructs a new manufacturing facility or who expands an existing manufacturing facility by at least fifty percent (50%) of the space devoted to manufacturing is allowed a credit against the tax imposed by this Part. The amount of the credit is equal to three percent (3%) of the construction costs.
(c)	Limitation. – The credit allowed by this section may not exceed fifty percent (50%) of the amount of tax imposed by this Part for the taxable year reduced by the sum of all credits allowable, except tax payments made by or on behalf of the taxpayer. Any unused portion of a credit may be carried forward for the succeeding five years.
(d)	No Double Benefit. – A taxpayer who claims a credit under this section may not claim a credit under G.S. 105‑129.9 or G.S. 105‑129.12A with respect to the same property and may not claim a refund under G.S. 105‑164.14 with respect to the same construction costs.
(e)	Sunset. – This section is repealed for activities that occur on or after January 1, 2010."
SECTION 3.  G.S. 105‑160.3(b) reads as rewritten:
"(b)	The following credits are not allowed to an estate or trust:
…
(8)	G.S. 105‑151.29. Credit for investing in manufacturing facilities."
SECTION 4.  This act is effective for taxable years beginning on or after January 1, 2005, and applies to construction costs incurred on or after that date.