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North Carolina Incentives and Workforce Development Guide

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Financing

One North Carolina Fund: Awards grants for job creation and/or retention in conjunction with local government matches.

Job Maintenance and Capital Development Fund: Provides a limited number of grants to businesses located in Development Tier 1 counties, where the business is a major employer and has at least (i) 2,000 employees, and invests at least $200 million in capital improvements, or a business that is a large manufacturing employer and has at least (ii) 320 employees, and invests at least $50 million in capital improvements to (a) convert its manufacturing process to change the product it manufactures, (b) enhance pollution controls, or (c) transition the manufacturing process from using coal to using natural gas. In addition, a large manufacturer can be considered in a Tier 2 county with a population of less than 60,000 as of July 1, 2013 and employ at least 800 full-time employees.

Site and Infrastructure Grant Fund: Provides assistance for site development and infrastructure improvements for very high-impact projects.

Rural Grants Program: The Rural Grants Program provides building renovation and economic infrastructure grants for job creation. All grants are awarded by a 15-member appointed Rural Infrastructure Authority. A building demolition grant program is currently under development.

Community Development Block Grant for Economic Development (CDBG-ED): The CDBG-ED program provides grants to local governments that partner with a pro-profit business to bring public infrastructure improvements and building renovation services. All grants are awarded by a 15-member appointed Rural Infrastructure Authority.

The Industrial Development Fund Utility Fund: The fund provides grants to units of local government for public infrastructure in Tier 1 and Tier 2 counties to assist in job creation. All grants are awarded by a 15-member appointed Rural Infrastructure Authority.

Industrial Revenue Bond (IRB) Program: Assists private business development and expansion by issuing low-interest tax-exempt bonds. It offers qualified manufacturing facilities and certain solid waste disposal facilities convenient, long-term, flexible financing. The Industrial Facilities and Pollution Control Financing Authority of each county issues these bonds in the county where the project is located. IRBs can be either tax-exempt or taxable and can be used to finance an entire project, including the cost of land, construction of new or expanded facilities, acquisition and installation of depreciable property such as equipment, and construction period interest.

Industrial Road Access Program: Administered by North Carolina’s Department of Transportation (DOT), this program provides funds for the construction of roads to provide access to new or expanded industrial facilities. An access review committee comprised of representatives of the Department of Transportation performs a technical review of a requested project and makes recommendations about traffic and safety concerns and approval based upon the resulting economic benefits of the project including the number of new jobs created, the amount of capital investment, highway’s use and the area’s economic conditions.

Industrial Rail Access System: Administered by the North Carolina DOT for businesses that want to locate or expand their facilities in NC. This program ensures that industries have the tracks needed to transport freight and materials and also assists in refurbishing tracks. Grant funding is contingent upon approval prior to the company making a decision to locate or expand in North Carolina and a private and/or local source match of funds. Approval is also based upon the economic benefits of the project including the number of new jobs created, the amount of capital investment, rail use and the area’s economic conditions.

Foreign Trade Zones (FTZ): Neutral, secured areas legally outside of the U.S. customs territory that offer economic advantages for businesses involved in international trade. There are four FTZs in North Carolina; several subzones are also approved for use by individual manufacturers.

Tax Incentives

Job Development Investment Grant: Awards a limited number of cash grants directly to new and expanding businesses that will provide economic benefits to the State and need the grant to carry out the project in North Carolina. Grants are based on the job creation and investment commitment made by companies in their formal applications to the State prior to a location decision. Grant funds are disbursed annually to approved companies based on a percentage of withholding taxes paid by new employees, following satisfaction of performance criteria set out in grant agreements.

Tax Reform: On July 23, 2013, Governor Pat McCrory signed new tax reform legislation into law. The plan provides fiscally responsible tax relief to all North Carolina taxpayers. Income tax rates for all taxpayers will be lowered to a uniform rate of 5.8% in 2014 and 5.75% in 2015. The corporate income tax will be reduced to 6% in 2014 and 5% in 2015. If the state meets revenue targets, the corporate income tax will drop to 4% in 2016 and 3% in 2017.

Renewable Energy Property Tax Credit: Provides a tax credit of 35% of the cost of renewable energy property.

Research and Development Tax Credit: Businesses with qualified NC research expenses are allowed a tax credit equal to a percentage of those expenses. The allowable credits are determined by:

  • Small Business (annual receipts less than $1 million): Qualified small 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 cover under small business or low-tier, the credits below apply to qualified research expenses during the taxable year:

nctaxcreditchart

Sales and Use Tax Discounts, Exemptions and Refunds: Offers reduced rate allowances on certain parts and accessories for eligible industries and manufacturing processes.

Updated 1/6/15

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