State of NC

State of North Carolina Tax Credits are available for eligible new and expanding industry in Cumberland County for up to 50% of their tax liability.

ELIGIBLE BUSINESS TYPES

Eligible companies unsure of their NACIS Code may call the Raleigh Office of the Employment Security Commission at 800.262.0514.

The below listed State of North Carolina Tax Credits are detailed in the following text.

 

NORTH CAROLINA JOBS CREATION TAX CREDIT

Tax credits available for new investment and expansions meeting provisions of the
William S. Lee Quality Jobs Expansion Act.

JOB TAX CREDIT……… Cumberland County is a Tier 3 County providing a $ 3,000 Per Job Tax Credit. Fayetteville Development Zone provides an additional $ 4,000 Per Job Tax Credit.Firms located within the Fayetteville SDZ enjoy this additional per job tax credit above the Cumberland County amount, totaling $ 7,000 Per Job Tax Credit.

MINIMUM JOBS……….. New Investment - all new jobs over 5 created. Expansion - all new jobs created.

WAGE STANDARD……. New jobs created have to meet the county wage standard to qualify for the tax credits.

EXAMPLE: 20 jobs minus 5 job minimum.
Cumberland County Tier 3 Job Tax Credit -15 jobs x $ 3,000 per job = $45,000
Fayetteville Development Zone Job Tax Credit -15 jobs x $ 4,000 per job = $ 60,000

TOTAL JOBS TAX CREDIT FIRMS LOCATING WITHIN FAYETTEVILLE SDZ - $ 105,000

 

INVESTMENT TAX CREDIT
Eligible investment in Machinery and Equipment (M&E) placed in service during the tax year, either leased or purchased, and capitalized by the taxpayer applying for the credit. Credits are taken over a 7-year period with a 5-year carry forward.

TAX CREDIT……………. 7% Tax Credit of Investment.

THRESHOLD…………… Cumberland County - $ 200,000 Investment in M&E Fayetteville SDZ - $ 0.00

WAGE STANDARD……. New jobs created have to meet the county wage standard to qualify for the tax credits.

EXAMPLE: $ 4 Million in Eligible M&E
Cumberland County…..$ 4M - $ 200,000 threshold = $ 3,800,000 x 7%
Credit = $ 266,000
Fayetteville SDZ…….. $ 4M - $ 0.00 threshold = $ 4,000,000 x 7%
Credit = $ 280,000

RESEARCH AND DEVELOPMENT TAX CREDIT
A taxpayer claiming federal income tax credit under 41(a) of the IRS Code for increasing research is allowed a North Carolina credit of 5% of the state's share of the amount determined for the research.

A taxpayer claiming the alternative incremental credit under section 41(c)(4) of the Code is allowed credit equal to 25% of the state's share of the federal credit claimed.

Worker Training Tax Credit………. Cumberland County - $ 500 per worker. Fayetteville SDZ - $ 1,000 per worker

CENTRAL ADMINISTRATIVE OFFICE CREDIT

A taxpayer that has purchased or leased property and begins its use for a central administrative office is allowed a credit equal to 7% of the eligible investment amount.

The maximum credit allowed for central administrative office property is $ 500,000.

CITY OF FAYETTEVILLE STATE DEVELOPMENT ZONE
Development Zones (DZ) located in eligible cities are treated as Tier 1 for purposes of the wage standard, the threshold for Machinery & Equipment Investment, and the credit for worker training. A taxpayer that contributes to a DZ agency for an improvement project is allowed credit equal to 25% of the value of the contribution. Such credits may not be taken in the year of the contribution, but in the tax year for which the application for credit becomes effective. The maximum for all credits to a taxpayer year for a DZ improvement project is $ 4 million. Tax credits are forfeited if it is found that a DZ agency has used project contribution funds for any purposes other than the improvement project. The company must meet the average weekly facilities wage standard.

ELIGIBILITY REQUIREMENTS FOR ALL TAX CREDITS

ELIGIBLE COMPANIES:

Primary Activity	NAICS Code	SIC Code
Manufacturing / Processing	31-33	2011-3999
Warehousing	493	4221-4226
Wholesale Trade	42	5012-5199
Air Courier Services	492110	4513
Central Administrative Offices (40 administrative jobs)	551114	Aux. Code 1, 6, 7
Electronic Mail Order (250 jobs), (Tiers 1& 2 only)	454110	4541
Data Processing		7371-7379
Computer Systems Design & Related Services	54151
Software Publishers	511210
Software Reproducing	334611
Data Processing Services	514210
On-Line Information Services	514191

A company's SIC/NAICS code must be in one of the categories listed above. The Employment Security Commission designates SIC/NAICS codes.

ELIGIBILITY REQUIREMENTS:

1. Qualifying SIC/NAICS code.
2. Company must pay 110% of the lowest of 3 wage factors of the project location(100% in Tier 1 or DZ). The company's average wage includes all employees of the facility and all cash compensation from which FICA is deducted. Compute from annual report.
3. Must provide health insurance for full-time positions, minimum 50% of premiums paid by the employer.
4. Has not had a significant environmental violation in the last 5 years.
5. Has no outstanding citation under the Occupational Safety and Health Act and has had no serious violation within the last 3 years.

APPLICATION FEE:

1. $ 500 per type of credit (Jobs, M&E, etc.) applied for up to $ 1,500 per taxpayer per tax year.
2. This fee is effective for all applications filed after 8/18/99 regardless of the year of application.
3. There is no application fee for companies located in Tier 1 & 2 or in a State Development Zone (for applications filed after December 31, 2000).

DEVELOPMENT ZONE:

Tax credit enhancements are available for companies located in designated Development Zones.

For more information about designation, including maps, please contact the Division of Community Assistance at 919.733.2850.

For more information visit our web site at http://www.nccommerce.com/finance.

Direct tax-related questions to the Department of Revenue at 919.733.8510.

The total value of tax credits cannot exceed 50% of the annual tax liability. All credits can be taken either on the income, franchise or gross premiums tax returns.

Last modified 8/00.
Department of Commerce Finance Center