Credit is based on a percentage of qualified research expenses with the highest amounts for research performed by North Carolina universities.
Businesses with qualified North Carolina research expenses are allowed a credit equal to a percentage of those expenses. The allowable credits are determined by:
- Small business (annual receipts less than $1 million): Qualified businesses on the last day of the taxable year are allowed a credit of 3.25%.
- Low-tier research: For expenses for research performed in a Tier 1 county, a business is permitted a credit of 3.25%.
- Other research: For expenses not covered above, refer to the table below for qualified research expenses during a taxable year:
|
Qualified Expenses |
Rate |
|
$0-$50 million |
1.25% |
|
$50 - $200 million |
2.25% |
|
More than $200 million |
3.25% |
A business with North Carolina university research expenses for the taxable year is allowed a credit equal to 20% of those expenses.