TAX CREDITS AND INCENTIVES
North Carolina’s targeted, performance-based incentive programs greatly lessen the tax burden and lower the overall costs, helping companies that are locating and doing business here succeed.
COUNTY DEVELOPMENT TIER DESIGNATION
- The North Carolina Department of Commerce annually ranks the state’s 100 counties based on economic well-being and assigns each a tier designation. The 40 most distressed counties are designated as Tier 1, the next 40 as Tier 2 and the 20 least distressed as Tier 3. This tier system is incorporated into various state programs to encourage economic activity in the less prosperous areas of the state.
- Brunswick, Pender and New Hanover Counties are Tier 3 designations.
JOB DEVELOPMENT INVESTMENT GRANT
- The Job Development Investment Grant (JDIG) is a performance-based, discretionary incentive program that provides cash grants directly to new and expanding companies to help offset the cost of locating or expanding a facility in the state. The amount of the grant is based on a percentage of the personal income tax withholdings associated with the new jobs. To learn more click here JDIG
ONE NORTH CAROLINA FUND
- The One North Carolina Fund (OneNC) is a discretionary cash-grant program that allows the Governor to respond quickly to competitive job-creation projects. The North Carolina Department of Commerce administers OneNC on behalf of the Governor. Awards are based on the number of jobs created, level of investment, location of the project, economic impact of the project and the importance of the project to the state and region. To learn more click here One NC Fund
COMMUNITY DEVELOPMENT BLOCK GRANT, ECONOMIC DEVELOPMENT PROGRAM
- The Community Development Block Grant, Economic Development Program (CDBG ED) is administered by the North Carolina Department of Commerce; it provides grants to local governments for public infrastructure development. Funds are administered based on an annual federal allocation to North Carolina from the U.S. Department of Housing and Urban Development (HUD) and are made available to most local governments for economic development projects. Companies cannot apply directly for this funding, but instead work collaboratively with a local government applicant. To learn more click here CDBG Economic Development
- North Carolina’s Utility Account provides infrastructure grants to local governments in Tier 1 and Tier 2 counties. The North Carolina Department of Commerce administers the Utility Account. All applications are reviewed and approved by the Secretary of Commerce. To learn more click here Utility Account
RURAL DIVISION, ECONOMIC INFRASTRUCTURE PROGRAM
- The Economic Infrastructure Program is administered by the Rural Division of the North Carolina Department of Commerce; it provides grants to local governments to assist with public infrastructure projects that will lead to the creation of new, full-time jobs. To learn more click here Rural Division, Economic Infrastructure Program
COMMUNITY DEVELOPMENT BLOCK GRANT, BUILDING REUSE PROGRAM
- The Community Development Block Grant, Building Reuse Program (CDBG Building Reuse) is administered by the North Carolina Department of Commerce; it provides funds to renovate and upfit vacant industrial and commercial buildings for economic development purposes. CDBG Building Reuse grants are available to local government applicants that work in conjunction with a company intending to operate in a vacant building. The company’s new or expanding operations must result in the creation of permanent, full-time jobs. To learn more click here CDBG, Building Reuse Program
RURAL DIVISION, BUILDING REUSE PROGRAM
- The Building Reuse Program is administered by the Rural Division of the North Carolina Department of Commerce; it provides grants to local governments for two purposes: the renovation of vacant buildings and the renovation or expansion of a building occupied by an existing North Carolina company wishing to expand in its current location. To learn more click here Rural Division, Building Reuse Program
N.C. DEPARTMENTS OF COMMERCE AND TRANSPORTATION, JOINT ECONOMIC DEVELOPMENT PROGRAM
- The North Carolina Department of Transportation (NCDOT) works closely with the North Carolina Department of Commerce to provide transportation improvements and infrastructure that will expedite industrial/commercial growth and provide new jobs or retain existing ones. Projects must be approved by both the Secretary of Transportation and the Secretary of Commerce.Funds may be awarded up to $2,500 per new job, with a $400,000 limit per project. To learn more click here NCDOC & Transportation, Joint ED program
NORTH CAROLINA DEPARTMENT OF TRANSPORTATION RAIL INDUSTRIAL ACCESS PROGRAM
- The North Carolina Department of Transportation’s (NCDOT) Rail Industrial Access Program uses state funds to help construct or refurbish railroad spur tracks required by a new or expanding company. Program funding is intended to modernize railroad tracks to ensure effective and efficient freight deliveries.Project funding is contingent upon a company’s receiving application approval prior to making a decision to locate or expand its facility in North Carolina. In addition, an award can be made only after confirmation of the availability of matching funds from private and/or local sources.Local governments, community development agencies, railroads and companies themselves are eligible for funds to improve rail access. Approval depends on a variety of factors, including the number of potential new jobs that will be created, the amount of capital investment, rail use and local economic conditions.Grant recipients may receive a maximum of 50% of total project costs, subject to a $200,000 limit per project. To learn more click here NCDOC & Transportation, Rail Industrial Access Program
WORKFORCE TRAINING & DEVELOPMENT
- Among the most significant questions a company new to North Carolina or expanding in the state must address is how to attract and retain a qualified workforce. No state has greater long-term experience with successful workforce solutions than North Carolina. Its world-class educational system of colleges and universities ensures a robust pipeline of candidates in fields ranging from finance to nanotechnology. Its award-winning community college system provides state-of-the-art training customized to meet an employer’s specific needs. North Carolina’s workforce development system—one of the most comprehensive in the nation—brings employer and employees together by managing recruiting, screening and other necessary pre-employment assessments. To learn more click here Workforce Training & Development
- At no charge, NCWorks Career Centers provide companies with an extensive network of recruiters and recruiting tools. These experienced specialists leverage resources to more efficiently and effectively identify qualified applicants.
- Job awareness and outreach strategy Online job postingsRecruitment training video Job fairs and on-campus recruiting .NCWorks Career Centers Primarily at no charge, NCWorks Career Centers offer a variety of employment services that help companies find employees with the required skills.
Services available at NCWorks Career Centers:
- Computer Access
- Job opening postings
- Job applicant screening
- Qualified candidate referrals
- Space for applicants interviews
- Job fair arrangement
- Reference library for use by companies
- Information on local labor market, prevailing wages, etc.
- Employer workshops on a variety of topics
- Available screening services can trim considerable time from the staffing process. Screening services provided at no charge include:Application screening Employment consultants Facilities and equipment Testing
- Assessments Pre-employment Training North Carolina Community College Customized Training ProgramOn-the-Job Training (OJT) NCWorks Apprenticeship ProgramNCWorks Incumbent Worker Training Grants
Continuing Education Program
DATA CENTERS SALES & USE TAX EXEMPTIONS
- North Carolina provides three sales and use tax exemptions for purchase of the following items related to data centers and their operations:
1. Electricity and support equipment purchased for a “Qualifying Data Center”
2. Electricity and certain business property purchased for an “Eligible Internet Data Center”
3. Computer software at a “Data Center”“Data Center” is defined as: A facility that provides infrastructure for hosting or data-processing services and is concurrently maintainable. The power and cooling systems serving the computer equipment must include redundant capacity components and multiple distribution paths. Although the facility must have multiple distribution paths serving the computer equipment, a single distribution path may serve the computer equipment at any one time. To learn more click here Data Centers Sales & Use Tax Exemption
HISTORIC PRESERVATION TAX CREDIT
- Owners or lessees of a “certified historic structure,” as designated by the State Historic Preservation Office or U.S. Department of the Interior’s National Park Service, are eligible for historic preservation tax credits. Credits are available for the rehabilitation of income-producing historic properties and owner-occupied historic residences.A 15% state tax credit for rehabilitation of income-producing certified historic structures is awarded to rehabilitations that qualify for the federal tax credit and spend up to $10 million. A 10% state tax credit for rehabilitation of income-producing certified historic structures is awarded to rehabilitations that qualify for the federal tax credit and are for expenses from $10 million to $20 million. There is also a 5% bonus if the development is within a Tier 1 or Tier 2 county or is located in an eligible targeted investment site. This bonus may be applied for expenses up to $20 million.
- Machinery and Equipment, Sales and Use Tax ExemptionMill (generally manufacturing) machinery, including parts or accessories as well as specialized equipment for loading or processing, is exempt from sales and use tax, but is subject to a 1% privilege tax, capped at a maximum of $80 per article. For a list of items that are classified as mill machinery, please see Section 58 of the North Carolina Department of Revenue’s Sales and Use Tax Technical Bulletin.North Carolina does not levy a sales and use tax on repairs to industrial machinery or service contracts for mill machinery.Electricity, Fuel and Natural Gas, Sales and Use Tax ExemptionRetail sales, as well as the use, storage or consumption of electricity, fuel and piped natural gas sold to a manufacturer are exempt from sales and use tax for use in a manufacturing operation. This exemption does not apply to electricity used at a facility at which the primary activity is not manufacturing. For purposes of the exemption, a “facility” is (1) a single building or (2) a group of buildings that are located on a single parcel of land or on contiguous parcels of land under common ownership. “Facility” also refers to any other related real property contained on the parcel(s) where manufacturing activity occurs.Raw Materials, Sales and Use Tax Exemption
Purchases of ingredients or component parts of a manufactured product that become an ingredient or component part of tangible personal property are exempt from sales and use tax. In addition, packaging items that constitute a part of the sale (retail or wholesale) and are delivered with the product to the customer are exempt from sales and use tax.
Inventory, Property Tax Exclusion
North Carolina and its local governments do not levy a property tax on inventories.
Inventories owned by contractors, manufacturers and merchants (retail and wholesale) are excluded from property tax. Inventories are defined as goods held for sale in the regular course of business by manufacturers, retail and wholesale merchants and construction contractors. For manufacturers, the term inventory includes raw materials, goods in process and finished goods, as well as other materials or supplies that are consumed in manufacturing or processing. Inventory also refers to any commodity or part thereof that accompanies and becomes part of the property being sold.
POLLUTION CONTROL AND ABATEMENT & RECYCLING
- Pollution Control & Abatement Equipment Pollution control and abatement equipment for manufacturing is exempt from sales and use tax, but is subject to a 1% privilege tax, capped at a maximum of $80 per article. In addition, chemicals purchased by manufacturers to be used in air or stream pollution abatement equipment or processes are exempt from sales and use tax, but are subject to a 1% privilege tax, capped at a maximum of $80 per article.Pollution abatement equipment means any equipment, including parts and accessories, used to eliminate, prevent or reduce air and water pollutants emitted resulting from the manufacturing process. This category also includes equipment used for the purpose of treating, pretreating or modifying any potential solid, liquid or gaseous pollutants that might be harmful, detrimental or offensive to human, animal or plant life or to property. Neither buildings housing such control and abatement equipment, nor equipment used within a building’s interior primarily for health, comfort or safety purposes is eligible for this exemption.Property Tax Exemption North Carolina does not levy property tax on real and personal property that is used exclusively for air cleaning, waste disposal or to abate, reduce or prevent air and/or water pollution. To claim an exclusion on property tax liability, a taxpayer must apply to the county for exclusion during the annual listing period and apply to the North Carolina Department of Environmental Quality for exclusion certification.Recycling
The North Carolina Recycling Property Tax Exemption excludes equipment and facilities used exclusively for recycling and resource recovery from property tax liability. For more details and application information, please visit the Solid Waste Section of the N.C. Department of Environmental Quality website.
Recycling Business Assistance Center, Recycling Business Development Grants
The Recycling Business Assistance Center (RBAC) is a partnership between the state Departments of Environmental Quality and Commerce. RBAC offers a variety of financial tools and incentives for recycling businesses, including tax credits, grants, loans and incentive programs.
In an effort to divert materials from the waste stream while supporting company growth, expansion and job creation in North Carolina, RBAC offers Recycling Business Development grants to eligible organizations. Funds are typically used for sustainable investments in equipment and buildings necessary to increase the capacity of a recycling company. Funding is made available through an annual request for proposal process that begins in the fall. Applicants may request a maximum of $40,000 and must provide at least a 50% cash match. For more information, visit the Grants section of the RBAC website.