Small Business Investment Grant
Senate Bill 900 creates a one-time COVID-19 Small Business Recovery Program administered by the North Carolina Department of Commerce. The bill appropriates $250 million in nonrecurring General Fund dollars for fiscal year 2025-2026 to provide grants to qualifying small businesses that were economically harmed by the pandemic, with the stated goal of offsetting losses, preserving businesses, and supporting economic stability.
To qualify, a business must be subject to North Carolina income tax, have 2019 annual receipts of $8 million or less when combined with related persons, and show at least a 25% reduction in sales tax collections in 2020 compared with 2019 due to COVID-19. Grants are limited to the lesser of $250,000 or the amount of the business’s sales tax collection reduction, and total awards cannot exceed the $250 million appropriation. The Department of Commerce must verify eligibility with the Department of Revenue, and the Revenue Department is authorized to disclose tax information for that purpose despite normal confidentiality rules.
The bill also adds a new subtraction to North Carolina’s individual income tax law for amounts received under the program, making the grant non-taxable for the recipient taxpayer for taxable years beginning on or after January 1, 2025, through January 1, 2026. In addition, recipients must keep operating for at least six months after receiving a grant, or they face a proportional clawback of the award. The appropriation does not revert, meaning unused funds remain available for the program until fully awarded.
Because there are no committee transcripts or recorded votes provided, there is no documented debate or formal sentiment history in the materials. Based on the bill text, the measure appears strongly supportive of small businesses and economic recovery, especially businesses in underserved areas that were hit hardest by COVID-19. The main policy tension implied by the bill is fiscal: it commits a large amount of state General Fund money to a targeted grant program and relaxes tax confidentiality rules for eligibility verification, which may raise administrative and privacy concerns.
The bill would create a new state grant program within the Department of Commerce and require coordination with the Department of Revenue to verify eligibility. It would also amend G.S. 105-153.5(b) to exclude Small Business Recovery Program grants from taxable income for the affected tax years. The measure would affect qualifying small businesses, the Department of Commerce, and the Department of Revenue by establishing application, verification, grant cap, and clawback procedures, while authorizing limited disclosure of tax information for administration of the program.
No committee discussion or vote record is provided, so there is no direct evidence of legislative sentiment in the available materials. The bill’s findings and structure indicate a favorable, pro-business intent centered on pandemic recovery, economic development, and business retention. Overall, the text suggests broad support for aiding small businesses, though the size of the appropriation and the use of tax data for eligibility verification could generate scrutiny.
The most likely points of contention are the $250 million General Fund appropriation, the use of sales tax collection declines as the eligibility metric, and the authorization for the Department of Revenue to disclose otherwise confidential tax information to the Department of Commerce. Another possible issue is whether the program is narrowly tailored enough, since it targets businesses with receipts of $8 million or less and requires a specific pandemic-related sales tax decline, which may exclude some businesses that also experienced hardship. The clawback provision and six-month operating requirement may be viewed as safeguards, but they could also be debated as burdensome or difficult to enforce.