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North Carolina Economic Incentives

North Carolina Economic Incentives


SML Perspectives
(November 22, 2011)

From tax breaks to grant programs and a motivated workforce, North Carolina has all of the tools a business needs to succeed. As a result, global business leaders such as Apple, GlaxoSmithKline, and Volvo are now calling North Carolina home.

Right-to-Work-State

By being a right-to-work state, North Carolina offers companies a low cost of doing business.

Tax Incentives and Discounts

North Carolina provided the second-lowest business tax burden in the United States last year, mostly due to competitive tax credits. Article 3J Tax Credits provide credits equal to up to 50 percent of a taxpayer’s state income and/or franchise tax liability for companies that are creating jobs or investing in business property. There are tax credits for technology development as well, including a small business credit of up to 3.25 percent, and
renewable energy credits under Article 3B. Also, North Carolina offers sales and use tax discounts on a variety of items from machinery to sales of electricity to computer software.

Discretionary Incentive Programs

The Job Development Investment Grant (JDIG) is a need-based grant for businesses providing economic benefits to the state. The grant is awarded based on a percentage (between 10 percent and 75 percent) of the withholdings of eligible positions created by the new business. The One North Carolina fund also offers incentives to new companies, including grants for purchases of equipment, structural repairs, and construction. A company seeking this grant must meet the average wage test and partner with local units of government to match the financial assistance given by the fund. Other incentive programs include the SBIR/STTR Small Business Technology Funding, Site and Infrastructure Grant Fund, and Job Maintenance and Capital Development Fund.

Location

Because of its central, East Coast location, North Carolina offers global connectivity to other industries through its four international airports, two international ports, and transportation infrastructure.

Workforce

North Carolina workers are 10 percent more productive than the average U.S. worker. North Carolina offers many state and community colleges, as well as an extensive workforce development network, to develop workers’ skills.

N.C. Department of Commerce 2011 Tier Designations

A ranking of the state’s 100 counties based on economic well-being. This tier system is incorporated into various state programs to encourage economic activities in the less prosperous areas of the state. Visit www.thrivenc.com to learn more.

Graph displaying N.C. Department of Commerce 2011 Tier Designations

The Ports

The Port of Wilmington and the Port of Morehead City are North Carolina’s deep-water international ports. With the expansion of the Panama Canal underway, the N.C. Ports Authority has taken steps to allow ships from North Carolina faster and easier access to Asian destinations through the Panama Canal.

Cost-Savings Programs

Cost-savings programs are available to companies operating in specific industries, such as film, biotechnology, and manufacturing. Industrial revenue bonds also provide tax-exempt, long-term financing options, and the Free Trade Zones program allows companies in certain locations in North Carolina to defer or eliminate import duties.

Click here to view the full digital version of the The Economic Development edition of SML Perspectives.

Authors
Lisa W. Arthur
T (336) 378-5318
F (336) 433-7467
David L. Kyger
T (336) 378-5551
F (336) 433-7453
Associated Attorneys
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