Financial incentives at the state and local levels are available to eligible tax-paying businesses locating or expanding in Moore County. 

STATE INCENTIVES
The State of North Carolina recognizes that lessening the tax burden can significantly lower the overall costs of doing business, and consequently offers performance-based tax credits, discretionary programs and other cost-saving programs to companies meeting eligibility requirements.  There are several financial incentive programs available to eligible new and expanding businesses in North Carolina.

 
Article 3J Credits
In July, 2006, the NC General Assembly passed House Bill 2170 that created a new tax credit program called Tax Credits for Growing Businesses (Article 3J Credits).  Article 3J Credits apply to eligible businesses locating or expanding in North Carolina on or after January 1, 2007.

Article 3J Credits allow eligible companies to offset up to 50% of their state income and/or franchise tax liability.  Unused credits can be carried forward for up to 5 years.  Each county in North Carolina is given a tier designation – 1, 2 or 3, that determines the level of tax credits available.  Moore County has a Tier 3 designation for 2010.

      There are 3 types of Article 3J Credits:

1. Credit for Creating Jobs – Eligible companies must meet a minimum threshold of new full-time jobs created, and the credit is taken in equal installments over 4 years following the year the jobs were created.  In Moore County, the minimum threshold is 15 jobs and the credit is $750 per job.
2. Credit for Investing in Business Property – This credit is equal to the percentage of the cost of capitalized tangible property placed in service, in excess of the minimum threshold.  In Moore County, this threshold is $2 million and the percentage is 3.5%.  This credit is taken in equal installments over 4 years beginning the year after the property is first placed in service.
3. Credit for Investment in Real Property – This credit is available only to Tier 1 counties; consequently, as a Tier 3 county, Moore County is not eligible. 

     Companies are eligible for Article 3J Credits if they meet the following criteria:

1. Eligible Business Type:  These include manufacturing, warehousing, wholesale trade, research and development, customer service call centers, information technology and services, and company headquarters that create at least 75 new headquarters jobs.
2. Wage Standard Test:  For Tier 2 or 3 counties only, the average wage of all full-time workers must meet or exceed the applicable wage standard for the county.  For Moore County, with a Tier 3 designation, the 2010 wage standard is $546 per week.
3. Health Insurance:  Health insurance, at least 50% employer paid, must be provided for full-time employees.
4. Clean Environmental Record:  Must have no significant environmental violations within the past 5 years.
5. Clean OSHA Record:  Must have no outstanding OSHA citations or serious violations within the past 3 years.
6. Paid Taxes:  Must not have any taxes overdue.

>> For additional requirements and information about Article 3J Tax Credits, click here to access the North Carolina Department of Commerce’s website.  To access House Bill 2170, click here.

 

Industrial Revenue Bonds
Also known as Industrial Development Bonds (IDBs), these bonds assist new and expanding businesses in North Carolina while focusing on creating quality jobs paying good wages.  These bonds specifically finance qualified manufacturing facilities (at least 75% manufacturing) and certain solid waste disposal facilities and can be used to finance the entire project.  Issuance of these bonds is regulated by both federal and state statutes.

There are 3 types of Industrial Revenue Bonds (IRBs):

1- Tax Exempt – Manufacturing – also known as Small Issue IDBs.  The interest received on these bonds is exempt from federal income taxes.  They can be issued for up to $10 million per qualified manufacturing facility in a single jurisdiction, and each company is limited to an outstanding maximum of $40 million in aggregate IRBs nationwide.  Also, the sum of the face amount of the bonds plus all other capital expenditures of the company within that jurisdiction cannot exceed $20 million. 

2- Taxable – These are exempt from state income taxes only and may exceed $10 million in amount (there is no limit on the amount).  These bonds are issued to finance industrial or solid pollution control facilities that do not meet the requirements for federal tax exemption.

3- Tax Exempt – Solid Waste Disposal Facility -  These are used to finance facilities for the collection, storage, treatment, utilization, processing or final disposal of solid waste.  There is a volume cap although there is no restriction on amount, and the interest on these bonds is federally tax exempt.

Requirements
–>  Proceeds from IRBs can only be used for land, building and equipment (fixed assets).
–>  Each IRB project requires environmental certification by the North Carolina Department of Environment and Natural Resources (DENR).
–>  The company must certify that in engaging in the current IRB project, it is not abandoning another facility in North Carolina.
–>  A job test must be met; currently, 1 job must be created or retained for every $250,000 in financing.
–>  All bond issues must be supported by a Letter of Credit.

>> For additional requirements and information about Industrial Revenue Bonds, click here to access the North Carolina Department of Commerce’s website.

 

Job Development Investment Grant
The Job Development Investment Grant (JDIG) is a discretionary incentive managed by an Economic Investment Committee, in which up to 25 companies can collectively receive grant funds of up to $15 million per year for up to 12 years.  The annual grant amounts can range from 10% to 75% of withholding taxes paid by “net” new employees in eligible positions.  For Tier 3 counties like Moore County, grant payments are reduced by 25%.

To qualify for a grant, a new or expanding company’s project must met a specific set of criteria which are reviewed by the Economic Investment Committee.  For example, the project must result in a net increase in new jobs in North Carolina by the company.  For a Tier 3 county like Moore County, this is a minimum of 20 eligible jobs that must be created.  In addition, another state(s) must be in competition for the project, and the project must require the grant funds for completion.  The company must also provide health insurance for all full-time employees applicable to the project.

The company must also agree to maintain operations at the project site, or another approved site, for at least 150% of the term of the grant.  If the business fails to remain at the site for the required term, a claw-back provision can recapture all or part of the grant funds.

Companies may apply for grant funds at any time during the year prior to December 1st.  A $5,000 application fee is required.  This program is available through January 1, 2016.  Retail projects are not eligible.

>> For additional requirements and information about the Job Development Investment Grant, click here to access the North Carolina Department of Commerce’s website. 

 

One North Carolina Fund
The One North Carolina Fund provides a one-time appropriation distributed by the General Assembly for new and expanding projects that are of significant economic importance to the state and that are in danger of possibly locating or expanding outside of North Carolina.

Companies can use these funds to purchase and install equipment, to renovate and repair an existing building for expansion, and to construct or improve infrastructure, such as water and sewer systems and access to natural gas.

Requirements for the One NC Fund include:
  –>  The project must be competitive with another state or country.
  –>  The company must pay an average weekly wage at least equal to 100% of the county’s average weekly wage amount.
  –>  The company must meet the health insurance requirement specified in the Article 3J Tax Credits, and not have any environmental, OSHA or overdue tax issues.
  –>  A local government (municipality and/or county) must provide matching financial assistance to the company.
  –>  A Company Performance Agreement is required between the local government unit and the company which specifies, among other provisions:
          – a commitment by the company to create or retain a specified number of  jobs at the applicable location;
          — that the jobs must pay within a specified salary range; and
          — that the jobs must be maintained for a specified period of time.

The amount of the appropriation is determined by the company’s economic impact to the area, and the number and quality of the jobs created, among other factors.  The company must be in operation and grant funds will be disbursed in 25% increments as jobs are created and local government matching funds are released.

>> For additional requirements and information about the One NC Fund, click here to access the North Carolina Department of Commerce’s website.   

 

Renewable Energy
The North Carolina Department of Revenue allows a tax credit to companies that have constructed, purchased or leased renewable energy equipment and are fully utilizing this equipment in their operations.  The credit can be applied against state franchise tax or income tax.

The amount of the credit is 35% of the cost of the (nonresidential) renewable energy equipment and is taken in equal installments over 5 years, beginning with the year the equipment is placed into service.  These costs include designing, constructing and installing the equipment, and increasing the capacity of an existing system through the addition of new equipment.

The credit applied cannot exceed $250,000 per installation.  Effective for taxable years beginning January 1, 2006 or after, the total maximum credit allowed for the nonresidential property is $2.5 million.

Examples of renewable energy include solar energy, wind, hydroelectric, and biomass and are used for purposes such as heating, cooling and generating electricity.

>> For additional requirements and information, refer to the North Carolina Department of Revenue’s website, www.dor.state.nc.us, at this link:  Corporate Tax Bulletin (Article 3B – Business & Energy Tax Credits).

 

LOCAL INCENTIVES
Incentive assistance at the county and/or municipal level is evaluated on a project-by-project basis and is dependent upon the number of new jobs created, the average wage paid, and the amount of capital investment.

Moore County also has an Urban Progress Zone (UPZ) in which eligible companies locating in this Zone may qualify for enhanced tax credits.  >> Click here for more information about Moore County’s UPZ.