Incentives – State of North Carolina
In July 2006, the NC General Assembly passed legislation that created a new tax credit program, Article 3J Credits. This program provide three types of tax credits to eligible taxpayers that undertake qualifying activities in North Carolina: 1) Credit for Creating Jobs, 2) Credit for Investing in Business Property, and 3) Credit for Investment in Real Property (tier 1 only). North Carolina offers a variety of incentives to firms relocating or expanding in the State. Many of these credits are affected by the tier, or economic status, of the county in which the investment will take place.
Harnett County is a tier 2 county, where tier 1 is the most economically distressed and tier 3 is the least economically distressed.
To qualify for Article 3J credits, the following eligibility requirements must be met:
1. The primary business of the taxpayer and/or establishment must be an eligible business type.
2. The average wage of the establishment, the new jobs, and the workers trained must meet or exceed the applicable wage standard of the county in which the establishment is located.
3. The taxpayer must provide health insurance for all fulltime positions at the location and pay at least fifty percent (50%) of the premiums.
4. The taxpayer must certify that it has not received any significant environmental violations with the North Carolina Department of Environment and Natural Resources within the prior five years.
5. The taxpayer must certify that it has not received any “willful” or “failure to abate” serious OSHA violations at the location within the prior three years.
Additional information is available through the North Carolina Department of Commerce
Web Site: NC Department of Commerce
Several types of tax credits are available, including the following:
Jobs Creation Tax Credit
An eligible business with 10 or more new full-time jobs created during the taxable year may claim a credit for each new job created. The amount of the credit is based on the tier area (see below) where the job is located.
Harnett County (tier 2)…………………………………………………………………………………$5,000 *
* Jobs must meet an average weekly wage standard that is at least equal to $473 per week.
Business Property Investment Tax Credit
Eligible taxpayers may claim a credit based on a percentage of the cost of capitalized tangible personal property that is placed in service during the taxable year, in excess of an applicable threshold. This credit is taken in equal installments over four years, beginning the year after the property is first placed in service. The credit percentage and threshold are based on the tier designation of the county where the property is placed in service. The following investment thresholds apply:
Harnett County (tier 2) ……………………………………………………$1,000,000
Harnett County (tier 2) Credit Percentage…………………………………………5%
Research and Development Tax Credit
Taxpayers that have qualified for North Carolina research expenses during a taxable year are allowed a credit equal to a percentage of those expenses, determined in the following manner:
1. Small business – If the taxpayer was a small business as of the last day of the taxable year, the applicable percentage is 3%.
2. Low-tier research – For expenses with respect to research performed in a development tier 1 county, the applicable percentage is 3%.
3. Other research – For expenses not covered under items (1) or (2) above, the percentages provided in the table below apply to the taxpayer’s qualified North Carolina research expenses during the taxable year at the following levels:
• $0-$50 million 1%
• $50-$200 million 2%
• Over $200 million 3%
Only one credit is allowed with respect to the same expenses, and then the credit is equal to the higher percentage, not both percentages combined. If part of the taxpayer’s qualified North Carolina research expenses qualifies under item (2) and the remainder qualifies under item (3), the applicable percentages apply separately to each part of the expenses.
Note: This summary is not meant to be exhaustive. Taxpayers should review the Article 3J statutes prior to claiming credits. Taxpayers that are uncertain about their eligibility or ineligibility to claim credits after reviewing the Article 3J statutes should consult with the Department of Revenue. No application is required to claim Article 3J credits.
The Harnett County Economic Development Commission, in cooperation with the governing body of Harnett County, may provide financial incentives for companies seeking to expand or relocate in Harnett County. The incentive program is designed to stimulate development in Harnett County by creating new investments and new jobs with higher wage rates.
Harnett County Economic Development Incentive (EDI) Grant Program
The EDI Grant involves a contractual agreement between the County and a new or existing business/ industry that would allow for a financial incentive grant based upon the actual value, schedule and payment of county property taxes for a period of up to seven (7) years. The County will require the business/ industry to pay in full annually total property taxes due. If the business/ industry has met specific criteria as outlined in a formal agreement, a portion of the property tax paid by that business/ industry to the County for up to seven (7) consecutive tax years would be returned to the business/ industry. The terms of the Grant will be based on the amount of investment. Each project will be considered on an individual basis using guidelines established under the direction of the Harnett County Board of Commissioners.
Each of Harnett County’s municipalities has agreed to match the terms of the County incentive grant for projects located within their corporate limits.
Municipal Economic Development Incentive (EDI) Grant Program
The EDI Grant involves a contractual agreement between the town and a new or existing business/ industry that would allow for a financial incentive grant based upon the actual value, schedule and payment of town property taxes for a period of up to seven (7) years. The town will require the business/ industry to pay in full annually total property taxes due. If the business/ industry have met specific criteria as outlined in a formal agreement, a portion of the property tax paid by that business/ industry to the town for up to seven (7) consecutive tax years would be returned to the business/ industry. The terms of the grant will be based on the amount of investment. Each project will be considered on an individual basis using guidelines established under the direction of the town’s Board of Commissioners.
Investment Threshold and Terms
|New Investment Level||% Property Taxes||Term|
|$1.5 million or greater||80%||Three (3) Years|
|$10 million or greater||80%||Five (5) Years|
|$20 million or greater||80%||Seven (7) Years|
|Expansion Investment Level||% Property Taxes||Term|
|$750,000 or greater||80%||Three (3) Years|
|$5 million||80%||Five (5) Years|
|$10 million||80%||Seven (7) Years|
Harnett County may also provide an EDI Grant based upon the number of jobs created at an average salary level of 110% of the average weekly wage* for the County. The amount of the Grant shall be recommended by the EDC office and approved by the Harnett County Board of Commissioners, subject to a public hearing.
* *Harnett County average weekly wage for 2012 is $526.
Web Site: www.progress-energy.com/
Progress Energy offers a variety of rates and incentives for industrial clients based upon demand, consumption and operating characteristics. Progress Energy offers two riders that may apply to new electrical customers.
1. The Economic Development Rider provides a reduced rate schedule over five years for qualifying customers adding a minimum of 1 megawatt electrical load.
2. The Economic Redevelopment Rider, which is new in 2003, provides a 50% rate discount in one year for qualifying businesses that move into a vacant facility served by Progress Energy.
Central Electric Incentives
Web Site: www.centralelectriconline.com/
(919) 774-4900, ext.112
South River Electric Incentives
South River EMC has the flexibility of specialty rate design, as well as incentive packages per applicable operation. BUSINESS DEVELOPMENT LOAN FUNDS may also be available.
Web Site: www.sremc.com/
Natural Gas Incentives
Piedmont Natural Gas Company
Web Site: www.piedmontng.com/
To create additional gas load and to attract an industrial plant or facility, Piedmont Natural Gas may sell natural gas at discounted rates to induce an industrial or large commercial customer to locate in Harnett County. If criteria are met, the following rate discount would be offered for a five year term:
|Service Year||Discount Applied|