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North Carolina Incentives and Workforce Development Guide

Visit Real Street's website to learn more about this event. The updated North Carolina incentives guide is brought to you by Real Street Expo, a new event sponsored by Business Facilities and Today’s Facility Manager magazines.

For a list of North Carolina economic development agencies that can help with the site selection process, visit our Online Site Seekers’ Guide.

Financing

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.
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 $65 million in capital improvements to convert its manufacturing process to change the product it manufactures.
Site and Infrastructure Grant Fund:
Provides assistance for site development and infrastructure improvements for very high-impact projects.
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 is 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 six FTZs in North Carolina; several subzones are also approved for use by individual manufacturers.

Tax Incentives

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.

Article 3J Tax Credits:
Provide tax credits to qualifying businesses for job creation, investment in business property and in some cases investment in real property. This Article is repealed effective for business activities that occur on or after January 1, 2014.
Interactive Digital Media Tax Credit:
Provides tax credit for developing interactive digital media. This credit is repealed effective for taxable years beginning on or after January 1, 2014.
N.C. Ports Tax Credits:
Provide tax credits toward income taxes paid by businesses or individuals using North Carolina Ports facilities at Morehead City and Wilmington. This credit is repealed effective for taxable years beginning on or after January 1, 2014.
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: 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 (see table below):
Qualified Research Expenses:
Expenses Over Up To Rate
-0-

$50 million 1.25%
$50 million

$200 million 2.25%
$200 million

- 3.25%
Sales and Use Tax Discounts, Exemptions and Refunds:
Offers reduced rate allowances on certain parts, accessories and construction supplies for eligible industries and manufacturing processes.

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About The Author

Schwartz joined Group C Media in April 1989 as managing editor of Today's Facility Manager. In September 2012, she transitioned to a new role dedicated to developing online content for Business Facilities and Today's Facility Manager. Schwartz can be reached at [email protected]

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