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Bill Summary · SB 891

Summary of North Carolina SB 891 (2025 Session) — Small Business Investment Grant

Aims to provide state-funded grants to small businesses economically harmed by COVID-19, with a focus on sustaining operations and preserving local economic activity. The program would be administered by the North Carolina Department of Commerce in coordination with the Department of Revenue.

1) Purpose and Intent

  • Address economic disruption experienced by small businesses due to the COVID-19 pandemic.
  • Support underserved areas and maintain economic stability by helping small businesses preserve operations and invest despite pandemic-related losses.
  • Provide a targeted, one-time grant program to recover and sustain the state’s small-business sector.

2) Key Provisions and Changes

Appropriation and Fund Availability

  • Funding: $250,000,000 (nonrecurring) from the General Fund for the 2025-2026 fiscal year.
  • Funds do not revert and remain available to the Department of Commerce for purposes in the act.

Creation of the Small Business Recovery Program

  • Program: COVID-19 Small Business Recovery Program administered by the Department of Commerce.
  • Grant Nature: One-time grant to each qualifying business.
  • Qualifying Business Criteria:
    • Must be subject to North Carolina income tax under Article 4, Chapter 105 of the General Statutes.
    • Annual receipts (including related entities) for the 2019 tax year must be $8 million or less.
    • Must demonstrate a reduction of at least 25% in sales tax collections due to COVID-19 for the 2020 tax year (vs. 2019 tax year).

Applications and Grant Amounts

  • Application Window: Eligible businesses must apply using a form prescribed by the Department; the Department may accept applications until all funds are exhausted.
  • Maximum Grant: The grant to any qualifying business cannot exceed the lesser of:
    • $250,000, or
    • The amount of reduction in sales tax collections for the 2020 tax year (compared to 2019) attributable to COVID-19.
  • Aggregate Cap: Total grants under the program may not exceed $250,000,000.
  • Eligibility Verification: The Department of Revenue will verify eligibility; the Department of Revenue may disclose tax information to the Department of Commerce for this purpose (subject to applicable laws, notwithstanding G.S. 105-259).
  • Grant Determinations: Final; based on applications filed.

Compliance and Clawback

  • Conditions: Receipt of a grant is conditioned on the recipient maintaining operations for at least six months after receipt.
  • Clawback: If a recipient ceases operations before the six-month period, the Department must claw back a proportionate share of the grant corresponding to the unfulfilled portion of the six-month period.

3) Affected Parties

  • Eligible Small Businesses: Those meeting the criteria above (income tax status, 2019 receipts, and 2020 sales-tax decline) and whose pandemic-related revenue losses qualify.
  • Departments Involved: North Carolina Department of Commerce (program administration) and Department of Revenue (eligibility verification and tax data sharing).
  • Taxpayers and Tax Filing Entities: Businesses with 2019 and 2020 tax data used to determine eligibility and grant amounts.

4) Timelines and Effective Dates

  • Tax Year Clarification: Section 2 of the bill modifies tax language to include the Small Business Recovery Program incentive as a line item for the applicable tax year.
  • Effective Date: The program provisions are effective for taxable years beginning on or after January 1, 2025, and the act’s other provisions expire for taxable years beginning on or after January 1, 2026. The remainder of the act becomes law upon enactment.

If you’d like, I can provide a quick comparison to existing NC small business grant programs or a plain-language FAQ for business owners considering eligibility.

Compiled from official sources — confirm details with the bill’s official record.

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