If a business creates a certain number jobs, invests significantly in equipment and real estate, or performs qualified R&D, it may be eligible to receive incentives.
Article 3J Tax Credits
Credit for Creating Jobs
Eligible taxpayers that meet a minimum threshold of new full-time jobs created during the taxable year may claim a credit for each new job created. The credit is taken in equal installments over four years following the year the jobs are created.
|Wake County||Raleigh UPZ*|
|Credit per Job||$750||$1,750|
Credit for Investing in Business Property
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. The credit is taken in four equal installments over four years, beginning the year after the property is first placed in service.
|Wake County||Raleigh UPZ*|
* Raleigh has created a designated Urban Progress Zone (UPZ) that significantly enhances the value of the tax credits.
For more detailed information about eligibility and minimum requirements, please visit the portion of the North Carolina Department of Commerce website devoted to Article 3J.
Interactive Digital Media Tax Credit
This incentive provides a 15 to 20 percent tax credit for compensation paid to employees and expenses paid to participating community colleges and research universities to help develop games and other computer-controlled virtual universe platforms. The credit may not exceed 50 percent of the amount of tax against which it is claimed for the taxable year, either franchise tax or income taxes, reduced by the sum of all other credits allowed against that tax, except tax payments made by the taxpayer. Any unused portion of the credit may be carried forward for 15 years.
Taxpayers eligible to claim the credit related to interactive digital media may take a 15 percent credit on all taxable wages and compensation paid to full-time North Carolina employees for the development of qualifying projects. Employee fringe contributions on compensation and wages, including health, pension and welfare contributions, would qualify as well.
A 20 percent credit is available for amounts paid to participating community colleges and research universities for services performed in the state. The credits apply to expenses that are more than $50,000 and the credit is capped at $7.5 million.
The project must be:
• Developed in North Carolina
• Produced for distribution on electronic media
• Designed to include a computer-controlled virtual universe and a significant amount of three or more of the following: sound, text, 3D geometry, animated and fixed images
Research and Development Tax Credits
The value of the R&D tax credit is based on a percentage of qualified research expenditures.
Businesses with annual receipts of less than $1 million are allowed a credit of 3% of qualified research expenditures.
For businesses with annual receipts greater than $1 million, please refer to the table below.
|$0 - $50 million||1%|
|$50 - $200 million||2%|
|$200 million +||3%|
Please note - a business with North Carolina university research expenses is allowed a credit equal to 20% of those expenses.
For more detailed information about the R&D tax credits, please visit the portion of the North Carolina Department of Commerce website devoted to R&D tax credits.
Job Development Investment Grant
The Job Development Investment Grant (JDIG) is a discretionary incentive that provides sustained annual grants to new and expanding businesses measured against a percentage of withholding taxes paid by new employees. Only 25 grants are available statewide annually.
Due to the size and scope of this program, JDIG is only available for very large economic development projects.
For more information about JDIG, please visit the portion of the North Carolina Department of Commerce website devoted to JDIG.
One North Carolina Fund
The One North Carolina Fund (formerly the Governor's Industrial Recruitment Competitiveness Fund) helps recruit and expand quality jobs in high value-added, knowledge-driven industries. It also provides financial assistance to those businesses or industries deemed vital to a healthy economy that are making significant efforts to expand in North Carolina.
The fund currently consists of nonrecurring appropriations made by the N.C. General Assembly for companies seeking to undertake new expansion or locate new operations in the state. The fund is competitive and the location or expansion must be in competition with another location outside the state.
Companies can receive money for:
• Installation or purchase of equipment.
• Structural repairs, improvements, or renovations of existing buildings to be used for expansion.
• Construction of or improvements to new or existing water, sewer, gas or electric utility distribution lines, or equipment for existing buildings.
For a company to be considered:
• The company must agree to meet an average wage test .
• Local units of government (city or county) must agree to match financial assistance to the company.
For more detailed information about eligibility and minimum requirements, please visit the portion of the North Carolina Department of Commerce website devoted to the One North Carolina Fund.