Part 5. Tax Credits for QualifiedBusiness Investments.
(Repealed effective forinvestments made on or after January 1, 2011)
§ 105‑163.010. (Repealed effective for investments made on or afterJanuary 1, 2011) Definitions.
The following definitionsapply in this Part:
(1) Affiliate. Anindividual or business that controls, is controlled by, or is under commoncontrol with another individual or business.
(2) Business. Acorporation, partnership, limited liability company, association, or soleproprietorship operated for profit.
(3) Control. A personcontrols an entity if the person owns, directly or indirectly, more than tenpercent (10%) of the voting securities of that entity. As used in thissubdivision, the term "voting security" means a security that (i)confers upon the holder the right to vote for the election of members of theboard of directors or similar governing body of the business or (ii) isconvertible into, or entitles the holder to receive upon its exercise, asecurity that confers such a right to vote. A general partnership interest is avoting security.
(4) Equity security. Common stock, preferred stock, or an interest in a partnership, or subordinateddebt that is convertible into, or entitles the holder to receive upon itsexercise, common stock, preferred stock, or an interest in a partnership.
(5) Financialinstitution. A business that is (i) a bank holding company, as defined in theBank Holding Company Act of 1956, 12 U.S.C. §§ 1841, et seq., or its whollyowned subsidiary, (ii) registered as a broker‑dealer under the SecuritiesExchange Act of 1934, 15 U.S.C. §§ 78a, et seq., or its wholly ownedsubsidiary, (iii) an investment company as defined in the Investment CompanyAct of 1940, 15 U.S.C. §§ 80a‑1, et seq., whether or not it is requiredto register under that act, (iv) a small business investment company as definedin the Small Business Investment Act of 1958, 15 U.S.C. §§ 661, et seq., (v) apension or profit‑sharing fund or trust, or (vi) a bank, savingsinstitution, trust company, financial services company, or insurance company.The term does not include, however, a business, other than a small businessinvestment company, whose net worth, when added to the net worth of all of itsaffiliates, is less than ten million dollars ($10,000,000). The term also doesnot include a business that does not generally market its services to thepublic and is controlled by a business that is not a financial institution.
(5a) Granting entity. Any of the following:
a. A domestic or foreigncorporation that (i) is tax‑exempt pursuant to section 501(c)(3) of theCode, (ii) has as its principal purpose the stimulation of the development ofthe biotechnology industry, and (iii) in furtherance of that purpose hasreceived, or is a successor in interest to an organization that has received,direct appropriations from the State in at least three fiscal years.
b. A domestic orforeign corporation that meets the following three conditions:
1. It is tax‑exemptpursuant to section 501(c)(3) of the Code, is a private foundation pursuant tosection 509 of the Code, or is an affiliate of either of the foregoing.
2. It has as itsprincipal purpose one of the following: conducting research and development in,or stimulating the development of, electronic, photonic, information, or othertechnologies, which may include investing in companies that provide research,development, products, or services in these technologies.
3. It meets one of thefollowing conditions:
I. It received directappropriations in furtherance of one of these purposes from the State in atleast three fiscal years.
II. It was organized toperform one of these purposes for an organization that meets condition I ofthis sub‑subdivision.
III. It is an affiliateof an entity that meets condition II of this sub‑subdivision.
c. An institute that(i) is administratively located within a constituent institution of TheUniversity of North Carolina, (ii) is financed in part by a domestic or foreigncorporation that is tax‑exempt pursuant to section 501(c)(3) of the Code,(iii) has as a principal purpose the stimulation of economic development basedon the advancement of science, engineering, and technology, and (iv) funds,either directly or in collaboration with other entities, small businesses engagingin developing technology.
(6) North CarolinaEnterprise Corporation. A corporation established in accordance with Article3 of Chapter 53A of the General Statutes or a limited partnership in which aNorth Carolina Enterprise Corporation is the only general partner.
(7) Pass‑throughentity. Defined in G.S. 105‑228.90.
(7b) Qualified business. A qualified business venture, a qualified grantee business, or a qualifiedlicensee business.
(8) Qualified businessventure. A business that (i) engages primarily in manufacturing, processing,warehousing, wholesaling, research and development, or a service‑relatedindustry, and (ii) is registered with the Secretary of State under G.S. 105‑163.013.
(9) Qualified granteebusiness. A business that (i) is registered with the Secretary of State underG.S. 105‑163.013, and (ii) has received during the current year or any ofthe preceding three years a grant, an investment, or other funding from afederal agency under the Small Business Innovation Research Programadministered by the United States Small Business Administration or from agranting entity as defined in this section.
(9a) Qualified licenseebusiness. A business that meets all of the following conditions:
a. It is registeredwith the Secretary of State under G.S. 105‑163.013.
b. During its mostrecent fiscal year before filing an application for registration under G.S. 105‑163.013,it had gross revenues, as determined in accordance with generally acceptedaccounting principles, of one million dollars ($1,000,000) or less on aconsolidated basis.
c. It has beencertified by a constituent institution of The University of North Carolina or aresearch university as currently performing under a licensing agreement withthe institution or university for the purpose of commercializing technologydeveloped at the institution or university. For the purpose of this section, aresearch university is an institution of higher education classified as aDoctoral/Research University, Extensive or Intensive, in the most recentedition of "A Classification of Institutions of Higher Education",the official report of The Carnegie Foundation for the Advancement of Teaching.
(10) Real estate‑relatedbusiness. A business that is involved in or related to the brokerage,selling, purchasing, leasing, operating, or managing of hotels, motels, nursinghomes or other lodging facilities, golf courses, sports or social clubs,restaurants, storage facilities, or commercial or residential lots or buildingsis a real estate‑related business, except that a real estate‑relatedbusiness does not include (i) a business that purchases or leases real estatefrom others for the purpose of providing itself with facilities from which toconduct a business that is not itself a real estate‑related business or(ii) a business that is not otherwise a real estate‑related business butthat leases, subleases, or otherwise provides to one or more other persons anumber of square feet of space which in the aggregate does not exceed fiftypercent (50%) of the number of square feet of space occupied by the businessfor its other activities.
(10a) Related person. Aperson described in one of the relationships set forth in section 267(b) or707(b) of the Code.
(11) Security. Asecurity as defined in Section 2(1) of the Securities Act of 1933, 15 U.S.C. §77b(1).
(12) Selling or leasing atretail. A business is selling or leasing at retail if the business either (i)sells or leases any product or service of any nature from a store or otherlocation open to the public generally or (ii) sells or leases products orservices of any nature by means other than to or through one or more otherbusinesses.
(13) Service‑relatedindustry. A business is engaged in a service‑related industry, whetheror not it also sells a product, if it provides services to customers or clientsand does not as a substantial part of its business engage in a businessdescribed in G.S. 105‑163.013(b)(4). A business is engaged as asubstantial part of its business in an activity described in G.S. 105‑163.013(b)(4)if (i) its gross revenues derived from all activities described in thatsubdivision exceed twenty‑five percent (25%) of its gross revenues in anyfiscal year or (ii) it is established as one of its primary purposes to engagein any activities described in that subdivision, whether or not its purposeswere stated in its articles of incorporation or similar organization documents.
(14) Subordinated debt. Indebtedness that is not secured and is subordinated to all other indebtednessof the issuer issued or to be issued to a financial institution other than afinancial institution described in subdivisions (5)(ii) through (5)(v) of thissection. Except as provided in G.S. 105‑163.014(d1), any portion ofindebtedness that matures earlier than five years after its issuance is notsubordinated debt. (1987,c. 852, s. 1; 1987 (Reg. Sess., 1988), c. 882, s. 2; 1989 (Reg. Sess., 1990),c. 848, s. 2; 1991, c. 637, s. 1; 1993, c. 443, s. 1; 1996, 2nd Ex. Sess., c.14, s. 7; 1997‑6, s. 5; 1998‑98, ss. 46, 69; 1998‑212, ss.29A.15(a), 29A.16(c), (d); 1999‑369, s. 5.6; 2002‑99, s. 3; 2003‑414,s. 2; 2003‑416, s. 4(a).)
Part 5. Tax Credits for QualifiedBusiness Investments.
(Repealed effective forinvestments made on or after January 1, 2011)
§ 105‑163.010. (Repealed effective for investments made on or afterJanuary 1, 2011) Definitions.
The following definitionsapply in this Part:
(1) Affiliate. Anindividual or business that controls, is controlled by, or is under commoncontrol with another individual or business.
(2) Business. Acorporation, partnership, limited liability company, association, or soleproprietorship operated for profit.
(3) Control. A personcontrols an entity if the person owns, directly or indirectly, more than tenpercent (10%) of the voting securities of that entity. As used in thissubdivision, the term "voting security" means a security that (i)confers upon the holder the right to vote for the election of members of theboard of directors or similar governing body of the business or (ii) isconvertible into, or entitles the holder to receive upon its exercise, asecurity that confers such a right to vote. A general partnership interest is avoting security.
(4) Equity security. Common stock, preferred stock, or an interest in a partnership, or subordinateddebt that is convertible into, or entitles the holder to receive upon itsexercise, common stock, preferred stock, or an interest in a partnership.
(5) Financialinstitution. A business that is (i) a bank holding company, as defined in theBank Holding Company Act of 1956, 12 U.S.C. §§ 1841, et seq., or its whollyowned subsidiary, (ii) registered as a broker‑dealer under the SecuritiesExchange Act of 1934, 15 U.S.C. §§ 78a, et seq., or its wholly ownedsubsidiary, (iii) an investment company as defined in the Investment CompanyAct of 1940, 15 U.S.C. §§ 80a‑1, et seq., whether or not it is requiredto register under that act, (iv) a small business investment company as definedin the Small Business Investment Act of 1958, 15 U.S.C. §§ 661, et seq., (v) apension or profit‑sharing fund or trust, or (vi) a bank, savingsinstitution, trust company, financial services company, or insurance company.The term does not include, however, a business, other than a small businessinvestment company, whose net worth, when added to the net worth of all of itsaffiliates, is less than ten million dollars ($10,000,000). The term also doesnot include a business that does not generally market its services to thepublic and is controlled by a business that is not a financial institution.
(5a) Granting entity. Any of the following:
a. A domestic or foreigncorporation that (i) is tax‑exempt pursuant to section 501(c)(3) of theCode, (ii) has as its principal purpose the stimulation of the development ofthe biotechnology industry, and (iii) in furtherance of that purpose hasreceived, or is a successor in interest to an organization that has received,direct appropriations from the State in at least three fiscal years.
b. A domestic orforeign corporation that meets the following three conditions:
1. It is tax‑exemptpursuant to section 501(c)(3) of the Code, is a private foundation pursuant tosection 509 of the Code, or is an affiliate of either of the foregoing.
2. It has as itsprincipal purpose one of the following: conducting research and development in,or stimulating the development of, electronic, photonic, information, or othertechnologies, which may include investing in companies that provide research,development, products, or services in these technologies.
3. It meets one of thefollowing conditions:
I. It received directappropriations in furtherance of one of these purposes from the State in atleast three fiscal years.
II. It was organized toperform one of these purposes for an organization that meets condition I ofthis sub‑subdivision.
III. It is an affiliateof an entity that meets condition II of this sub‑subdivision.
c. An institute that(i) is administratively located within a constituent institution of TheUniversity of North Carolina, (ii) is financed in part by a domestic or foreigncorporation that is tax‑exempt pursuant to section 501(c)(3) of the Code,(iii) has as a principal purpose the stimulation of economic development basedon the advancement of science, engineering, and technology, and (iv) funds,either directly or in collaboration with other entities, small businesses engagingin developing technology.
(6) North CarolinaEnterprise Corporation. A corporation established in accordance with Article3 of Chapter 53A of the General Statutes or a limited partnership in which aNorth Carolina Enterprise Corporation is the only general partner.
(7) Pass‑throughentity. Defined in G.S. 105‑228.90.
(7b) Qualified business. A qualified business venture, a qualified grantee business, or a qualifiedlicensee business.
(8) Qualified businessventure. A business that (i) engages primarily in manufacturing, processing,warehousing, wholesaling, research and development, or a service‑relatedindustry, and (ii) is registered with the Secretary of State under G.S. 105‑163.013.
(9) Qualified granteebusiness. A business that (i) is registered with the Secretary of State underG.S. 105‑163.013, and (ii) has received during the current year or any ofthe preceding three years a grant, an investment, or other funding from afederal agency under the Small Business Innovation Research Programadministered by the United States Small Business Administration or from agranting entity as defined in this section.
(9a) Qualified licenseebusiness. A business that meets all of the following conditions:
a. It is registeredwith the Secretary of State under G.S. 105‑163.013.
b. During its mostrecent fiscal year before filing an application for registration under G.S. 105‑163.013,it had gross revenues, as determined in accordance with generally acceptedaccounting principles, of one million dollars ($1,000,000) or less on aconsolidated basis.
c. It has beencertified by a constituent institution of The University of North Carolina or aresearch university as currently performing under a licensing agreement withthe institution or university for the purpose of commercializing technologydeveloped at the institution or university. For the purpose of this section, aresearch university is an institution of higher education classified as aDoctoral/Research University, Extensive or Intensive, in the most recentedition of "A Classification of Institutions of Higher Education",the official report of The Carnegie Foundation for the Advancement of Teaching.
(10) Real estate‑relatedbusiness. A business that is involved in or related to the brokerage,selling, purchasing, leasing, operating, or managing of hotels, motels, nursinghomes or other lodging facilities, golf courses, sports or social clubs,restaurants, storage facilities, or commercial or residential lots or buildingsis a real estate‑related business, except that a real estate‑relatedbusiness does not include (i) a business that purchases or leases real estatefrom others for the purpose of providing itself with facilities from which toconduct a business that is not itself a real estate‑related business or(ii) a business that is not otherwise a real estate‑related business butthat leases, subleases, or otherwise provides to one or more other persons anumber of square feet of space which in the aggregate does not exceed fiftypercent (50%) of the number of square feet of space occupied by the businessfor its other activities.
(10a) Related person. Aperson described in one of the relationships set forth in section 267(b) or707(b) of the Code.
(11) Security. Asecurity as defined in Section 2(1) of the Securities Act of 1933, 15 U.S.C. §77b(1).
(12) Selling or leasing atretail. A business is selling or leasing at retail if the business either (i)sells or leases any product or service of any nature from a store or otherlocation open to the public generally or (ii) sells or leases products orservices of any nature by means other than to or through one or more otherbusinesses.
(13) Service‑relatedindustry. A business is engaged in a service‑related industry, whetheror not it also sells a product, if it provides services to customers or clientsand does not as a substantial part of its business engage in a businessdescribed in G.S. 105‑163.013(b)(4). A business is engaged as asubstantial part of its business in an activity described in G.S. 105‑163.013(b)(4)if (i) its gross revenues derived from all activities described in thatsubdivision exceed twenty‑five percent (25%) of its gross revenues in anyfiscal year or (ii) it is established as one of its primary purposes to engagein any activities described in that subdivision, whether or not its purposeswere stated in its articles of incorporation or similar organization documents.
(14) Subordinated debt. Indebtedness that is not secured and is subordinated to all other indebtednessof the issuer issued or to be issued to a financial institution other than afinancial institution described in subdivisions (5)(ii) through (5)(v) of thissection. Except as provided in G.S. 105‑163.014(d1), any portion ofindebtedness that matures earlier than five years after its issuance is notsubordinated debt. (1987,c. 852, s. 1; 1987 (Reg. Sess., 1988), c. 882, s. 2; 1989 (Reg. Sess., 1990),c. 848, s. 2; 1991, c. 637, s. 1; 1993, c. 443, s. 1; 1996, 2nd Ex. Sess., c.14, s. 7; 1997‑6, s. 5; 1998‑98, ss. 46, 69; 1998‑212, ss.29A.15(a), 29A.16(c), (d); 1999‑369, s. 5.6; 2002‑99, s. 3; 2003‑414,s. 2; 2003‑416, s. 4(a).)
Part 5. Tax Credits for QualifiedBusiness Investments.
(Repealed effective forinvestments made on or after January 1, 2011)
§ 105‑163.010. (Repealed effective for investments made on or afterJanuary 1, 2011) Definitions.
The following definitionsapply in this Part:
(1) Affiliate. Anindividual or business that controls, is controlled by, or is under commoncontrol with another individual or business.
(2) Business. Acorporation, partnership, limited liability company, association, or soleproprietorship operated for profit.
(3) Control. A personcontrols an entity if the person owns, directly or indirectly, more than tenpercent (10%) of the voting securities of that entity. As used in thissubdivision, the term "voting security" means a security that (i)confers upon the holder the right to vote for the election of members of theboard of directors or similar governing body of the business or (ii) isconvertible into, or entitles the holder to receive upon its exercise, asecurity that confers such a right to vote. A general partnership interest is avoting security.
(4) Equity security. Common stock, preferred stock, or an interest in a partnership, or subordinateddebt that is convertible into, or entitles the holder to receive upon itsexercise, common stock, preferred stock, or an interest in a partnership.
(5) Financialinstitution. A business that is (i) a bank holding company, as defined in theBank Holding Company Act of 1956, 12 U.S.C. §§ 1841, et seq., or its whollyowned subsidiary, (ii) registered as a broker‑dealer under the SecuritiesExchange Act of 1934, 15 U.S.C. §§ 78a, et seq., or its wholly ownedsubsidiary, (iii) an investment company as defined in the Investment CompanyAct of 1940, 15 U.S.C. §§ 80a‑1, et seq., whether or not it is requiredto register under that act, (iv) a small business investment company as definedin the Small Business Investment Act of 1958, 15 U.S.C. §§ 661, et seq., (v) apension or profit‑sharing fund or trust, or (vi) a bank, savingsinstitution, trust company, financial services company, or insurance company.The term does not include, however, a business, other than a small businessinvestment company, whose net worth, when added to the net worth of all of itsaffiliates, is less than ten million dollars ($10,000,000). The term also doesnot include a business that does not generally market its services to thepublic and is controlled by a business that is not a financial institution.
(5a) Granting entity. Any of the following:
a. A domestic or foreigncorporation that (i) is tax‑exempt pursuant to section 501(c)(3) of theCode, (ii) has as its principal purpose the stimulation of the development ofthe biotechnology industry, and (iii) in furtherance of that purpose hasreceived, or is a successor in interest to an organization that has received,direct appropriations from the State in at least three fiscal years.
b. A domestic orforeign corporation that meets the following three conditions:
1. It is tax‑exemptpursuant to section 501(c)(3) of the Code, is a private foundation pursuant tosection 509 of the Code, or is an affiliate of either of the foregoing.
2. It has as itsprincipal purpose one of the following: conducting research and development in,or stimulating the development of, electronic, photonic, information, or othertechnologies, which may include investing in companies that provide research,development, products, or services in these technologies.
3. It meets one of thefollowing conditions:
I. It received directappropriations in furtherance of one of these purposes from the State in atleast three fiscal years.
II. It was organized toperform one of these purposes for an organization that meets condition I ofthis sub‑subdivision.
III. It is an affiliateof an entity that meets condition II of this sub‑subdivision.
c. An institute that(i) is administratively located within a constituent institution of TheUniversity of North Carolina, (ii) is financed in part by a domestic or foreigncorporation that is tax‑exempt pursuant to section 501(c)(3) of the Code,(iii) has as a principal purpose the stimulation of economic development basedon the advancement of science, engineering, and technology, and (iv) funds,either directly or in collaboration with other entities, small businesses engagingin developing technology.
(6) North CarolinaEnterprise Corporation. A corporation established in accordance with Article3 of Chapter 53A of the General Statutes or a limited partnership in which aNorth Carolina Enterprise Corporation is the only general partner.
(7) Pass‑throughentity. Defined in G.S. 105‑228.90.
(7b) Qualified business. A qualified business venture, a qualified grantee business, or a qualifiedlicensee business.
(8) Qualified businessventure. A business that (i) engages primarily in manufacturing, processing,warehousing, wholesaling, research and development, or a service‑relatedindustry, and (ii) is registered with the Secretary of State under G.S. 105‑163.013.
(9) Qualified granteebusiness. A business that (i) is registered with the Secretary of State underG.S. 105‑163.013, and (ii) has received during the current year or any ofthe preceding three years a grant, an investment, or other funding from afederal agency under the Small Business Innovation Research Programadministered by the United States Small Business Administration or from agranting entity as defined in this section.
(9a) Qualified licenseebusiness. A business that meets all of the following conditions:
a. It is registeredwith the Secretary of State under G.S. 105‑163.013.
b. During its mostrecent fiscal year before filing an application for registration under G.S. 105‑163.013,it had gross revenues, as determined in accordance with generally acceptedaccounting principles, of one million dollars ($1,000,000) or less on aconsolidated basis.
c. It has beencertified by a constituent institution of The University of North Carolina or aresearch university as currently performing under a licensing agreement withthe institution or university for the purpose of commercializing technologydeveloped at the institution or university. For the purpose of this section, aresearch university is an institution of higher education classified as aDoctoral/Research University, Extensive or Intensive, in the most recentedition of "A Classification of Institutions of Higher Education",the official report of The Carnegie Foundation for the Advancement of Teaching.
(10) Real estate‑relatedbusiness. A business that is involved in or related to the brokerage,selling, purchasing, leasing, operating, or managing of hotels, motels, nursinghomes or other lodging facilities, golf courses, sports or social clubs,restaurants, storage facilities, or commercial or residential lots or buildingsis a real estate‑related business, except that a real estate‑relatedbusiness does not include (i) a business that purchases or leases real estatefrom others for the purpose of providing itself with facilities from which toconduct a business that is not itself a real estate‑related business or(ii) a business that is not otherwise a real estate‑related business butthat leases, subleases, or otherwise provides to one or more other persons anumber of square feet of space which in the aggregate does not exceed fiftypercent (50%) of the number of square feet of space occupied by the businessfor its other activities.
(10a) Related person. Aperson described in one of the relationships set forth in section 267(b) or707(b) of the Code.
(11) Security. Asecurity as defined in Section 2(1) of the Securities Act of 1933, 15 U.S.C. §77b(1).
(12) Selling or leasing atretail. A business is selling or leasing at retail if the business either (i)sells or leases any product or service of any nature from a store or otherlocation open to the public generally or (ii) sells or leases products orservices of any nature by means other than to or through one or more otherbusinesses.
(13) Service‑relatedindustry. A business is engaged in a service‑related industry, whetheror not it also sells a product, if it provides services to customers or clientsand does not as a substantial part of its business engage in a businessdescribed in G.S. 105‑163.013(b)(4). A business is engaged as asubstantial part of its business in an activity described in G.S. 105‑163.013(b)(4)if (i) its gross revenues derived from all activities described in thatsubdivision exceed twenty‑five percent (25%) of its gross revenues in anyfiscal year or (ii) it is established as one of its primary purposes to engagein any activities described in that subdivision, whether or not its purposeswere stated in its articles of incorporation or similar organization documents.
(14) Subordinated debt. Indebtedness that is not secured and is subordinated to all other indebtednessof the issuer issued or to be issued to a financial institution other than afinancial institution described in subdivisions (5)(ii) through (5)(v) of thissection. Except as provided in G.S. 105‑163.014(d1), any portion ofindebtedness that matures earlier than five years after its issuance is notsubordinated debt. (1987,c. 852, s. 1; 1987 (Reg. Sess., 1988), c. 882, s. 2; 1989 (Reg. Sess., 1990),c. 848, s. 2; 1991, c. 637, s. 1; 1993, c. 443, s. 1; 1996, 2nd Ex. Sess., c.14, s. 7; 1997‑6, s. 5; 1998‑98, ss. 46, 69; 1998‑212, ss.29A.15(a), 29A.16(c), (d); 1999‑369, s. 5.6; 2002‑99, s. 3; 2003‑414,s. 2; 2003‑416, s. 4(a).)
