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William S. Lee Tax Credits in Jones County
North Carolina has placed all 100 counties in a tier system from 1 to 3 with the greatest amount of tax credit incentives available in Tier 1 and Tier 2 counties. Tax credit benefit levels are calculated based upon a county’s level of economic distress. Tier 1 is the poorest counties; Tier
3, the wealthiest.
Jones County has been designated by the N.C. Department of Commerce as a Tier 1 (economically distressed) county. This designation entitles certain companies locating or expanding in Tier 1 counties a greater amount of state tax credits. Job Creation Tax Credit - In a Tier 1 county like Jones, a company can claim a $12,500 tax credit on every new job created after the first five. These tax credits are taken in equal installments over four years. Investment Tax Credit - In a Tier 1 county like Jones, a company has a zero threshold for equipment and machinery purchases in claiming a seven percent tax credit. This includes leased equipment and machinery. The credit is taken in equal installments over the seven years after the machinery and equipment are first placed in service. North Carolina's new Tier System
and Tax Credits qualifications:
County Tier Designations The Department of Commerce annually ranks the state’s 100 counties based on economic well-being and assigns a tier designation to each. The 40 most distressed counties are designated as tier 1, the next 40 are tier 2, and the 20 least distressed are tier 3. This tier system is incorporated into various state programs, including Article 3J Credits, to encourage economic activity in the less prosperous areas of the state. 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. The job threshold and the credit amount per job are determined by the tier designation of the county in which the jobs are created. Urban Progress Zones (UPZ) and Agrarian Growth Zones (AGZ) Municipalities with a population of at least 10,000 have the ability to define qualifying areas of poverty as Urban Progress Zones. Counties that do not have a municipality with a population of at least 10,000, have the ability to define qualifying areas of poverty as Agrarian Growth Zones. Projects located within these zones receive enhanced Article 3J Credits.
In July, 2006, the NC General Assembly passed legislation (House Bill 2170) that created a new tax credit program, Article 3J Credits. Article 3J provides three types of tax credits to eligible taxpayers that undertake qualifying activities in North Carolina: 1) Credit for Creating Jobs, 2) Credit for Investing in Business Property, and 3) Credit for Investment in Real Property (tier 1 only). These credits may be combined to offset up to 50% of the taxpayer’s state income and franchise tax liability, and unused credits may be carried forward for up to five years (15-year carry-forwards apply to the Credit for Investing in Real Property and 20-year carry-forwards exist for taxpayers that invest at least $150 million over a two-year period).
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. This credit is taken in equal installments over four years, beginning the year after the property is first placed in service. The credit percentage and threshold are based on the tier designation of the county where the property is placed in service.
Credit for Investment in Real Property Eligible taxpayers that invest at least $10 million in real property within a three-year period and create at least 200 new jobs within two years at an establishment located in a tier 1 county are allowed a credit equal to 30% of the eligible real property investment. This credit is taken in equal installments over seven years, beginning the year after the property is used in an eligible business. To qualify for this credit, the taxpayer must obtain a written determination from the Department of Commerce.
Eligibility To qualify for Article 3J Credits, the following eligibility requirements must be met:
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Other eligibility information for the Lee Act tax credits. Worker Training Tax Credit - Companies providing training for five or more employees can take a credit of 50% (up to $1,000 for Tier 1 counties like Jones, for each employee trained) against eligible training expenses. There is a five-year carry forward available for any unused credits. Training must be for employees not classified as exempt employees under the FLDA, 29 U.S.C. Research and Development Tax Credit - The R&D tax credit enables firms that qualify for the federal Research and Experimentation Tax Credit to take a state tax credit equal to 5% of the state's apportioned share of the taxpayer's expenditures for R&D. State Tax Information - Tax Credit Administration This Act is a Revenue Law program, not a DOC program. ONLY the NC-DOR should discuss details of the program with Clients. All clients must be advised that they need to seek counsel from their professional tax consultants and that DOC strongly advises they speak directly with NC-DOR (Jonathan Tart is the primary contact) on any specific questions they may have, as well as request private letter rulings where applicable. They can also answer questions on Corporate Tax Law and information on Corporation Income Tax and other Tax Information. The total value of tax credits cannot exceed 50% of the company's annual tax liability. The North American Industry Classification System (NAICS) - has replaced the U.S. Standard Industrial Classification (SIC) system. This website provides a complete NAICS code listing, instructs how to change a SIC code to a NAICS code, get codes or statistical data for a specific company, and much, much, more.... |
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Business Startup, Financing and Registration Information Information in this section includes: |
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Major North Carolina Incentives - For Qualifying Business and Industry The North Carolina Department of Commerce (NCDOC) - offers and administers a number of financial incentives to qualified new and expanding business and industry to lower a company's cost of doing business. There are financial programs for the purchase of land and construction of buildings. Certain tax credits are available for job creation, purchase of equipment and machinery, and for worker training, etc. A company receives the most tax credits when locating in a Tier 1 economically depressed county. The North Carolina Finance Center (NCFC) - using this link provides a "one-step" financial center where relocating and existing employers can come for the articulation of the financing alternatives available in North Carolina. The NC Commerce Department Business ServiCenter - provides a one-stop office for companies interested in gaining state assistance in helping identify barriers to success. This office provides information about existing programs and resources designed to improve a company's profitability. They offer an overview of financial resources and special loan programs and the appropriate contacts that are available to small businesses and entrepreneurs. They can also guide a company to appropriate service providers on the state and its partners. Starting a Business in North Carolina: This page has links to information on licensing requirements, business structures, employer requirements, and more. North Carolina Secretary of State
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NC Location Incentives for New and Expanding Business Industry North Carolina imposes no tax on business inventories, and there is no state property tax on equipment or real property. North Carolina offers free customized job training and retraining for manufacturing companies employing 12 or more workers. The North Carolina Department of Commerce assigns an Economic Development Representative to companies locating in North Carolina who assists with financing, buildings, environmental permits, labor demographics and visits to the State. Tax Savings - North Carolina does not tax sales made in other states; corporate income tax is 6.9%. North Carolina has no local or state property tax on inventory, no local or state sales taxes on custom computer programs or property tax on software, exempts equipment used for pollution control from property tax, allows companies to amortize over 60 months equipment required by OSFA or for the reduction of hazardous waste. In addition, Tier 1 and 2 counties are eligible to receive financial assistance through the NC Department of Commerce Capital Industrial Development Fund, which provides new and existing firms with $5,000 in additional funding for each new job created, up to $500,000, to provide infrastructure to new or existing sites. Business Energy Loans - The State's Business Energy Loan program provides loans between $100,000 and $500,000 to industrial firms located or moving to North Carolina. Loans can be financed for up to 7 years at interest rates equal to 50% of the average (high and low) T-bill rate for the past year or five (5) percent, whichever is lower. Current rate is 5% which is the maximum. Funds are provided from a pool of $2.5 million designated for energy related capital improvements such as co-generation, energy saving motors, boiler improvements and low energy use lighting. Loans are processed on first-come-first-serve based upon the date of receipt of a letter of credit by a participating bank. The Department of Transportation Road Access Fund (to build roads to new or expanding industry). DOT Rail Access Fund (provides grants to construct or rehabilitate railways). |
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The Neuse River Development Authority, Inc. is a highly successful small business finance agency located in New Bern but serves many eastern NC counties by providing a range of different kinds of loans. Please check out their web site. Also check out their link to the Service Corps of Retired Executives (S.C.O.R.E) who provide free advice regarding business plans and other facets of business operations. SELF HELP - Creating Ownership and Economic Opportunity. North Carolina Rural Economic Development Center, Inc. (Business Loan Programs - The Rural Center runs two innovative programs that provide capital for business start-ups and expansions. The Microenterprise Loan Program serves the smallest rural businesses through a combination of loans, business planning and technical assistance. The Capital Access Program serves small-to-medium sized businesses and is operated through local lending institutions. NC Department of Commerce - Financing Your Business NC IDEA - Innovative Development for Economic Advancement supporting business innovation in North Carolina to ensure success of businesses by infusing entrepreneurial companies with needed capital and support, such as, providing grants, loans and traditional venture funding. They also offer strategic partnerships and alliances to assist entrepreneurs through research phases, business challenges, and growth goals. United States Small Business Administration (SBA) Jones County is designated as an SBA HUBZone. Companies locating in a HUBZone, once they are registered by SBA, receive priority consideration when bidding on government programs of all federal agencies. SBA: Small Business Administration - North Carolina Office Other Small Business Financing Organizations North Carolina Technological Development Authority - TDA funds small business incubators and operates one in the Research Triangle Park. It has launched a venture-capital fund and has helped establish others. Active Capital - The Evolution of Private Equity Investing |
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Business and Industry Resources North Carolina Community College System - Preparing North Carolina's World-Class Workforce - Economic & Workforce Development. Community College Customized Training North Carolina Community Colleges on the Web North Carolina Community College System Small Business Centers Network - Providing free counseling, seminars, and resource materials to potential and existing small business owners. North Carolina Employment Security Commission - Their mission is to help businesses in North Carolina fill job openings with qualified workers. The division helps employers solve problems relating to work recruitment, testing, selection and development. Staff also can provide extensive labor market information and training on human resource topics. Operation Transition and the Transition Bulletin Board - Learn more about this new Department of Defense program designed to link employers with highly trained, dedicated, disciplined, motivated, skilled, and qualified job seekers separating or retiring from all branches of the military and the federal government along with their spouses in every job category and every level of experience. The TBB is a database of job want ads and useful career information on these individuals located around the world. On average, more than 10,000 want ads representing over 30,000 jobs can be viewed on TBB every day. Go to: http://www.dmdc.osd.mil/ot/ot_learn.html Employment Laws - The US Department of Labor website is an interactive tool that provides information about federal employment laws. NC Small Business and Technology Development Center (SBTDC) - provides management counseling and educational services to help North Carolina businesses meet challenges, manage change, and plan for the future. Jones County is served by the SBTDC office in Greenville, NC. Most of their services are free and all SBTDC services are confidential. N.C. Rural Economic Development Center - where you can find information on local, state and national organizations that provide vital services to North Carolina's rural communities. These organizations offer a wide range of programs, including grants, loans, data services, technical assistance, publications, conferences, training programs and electronic information. To get started, just choose one of the search items below. Industrial Extension Service - Based in the College of Engineering at North Carolina State University, this agency provides technical and industrial-management assistance to companies. Their aim is to help your business increase efficiency, productivity, quality, and, as a result, profits. The website describes extensive products and services for continuing education; industrial and solar energy; environmental, safety, and health management; lean enterprise; construction; and quality. MCNC - This private non-profit corporation offers advanced electronic and information technology resources to business, government, and universities to provide competitive advantages in the marketplace. Thomas Register - This is a comprehensive online resource for finding companies or products manufactured in North America where you can order online, view CAD drawings, and get links to company websites and catalogs. You have to register, but there is no charge. Council for Entrepreneurial Development (Research Triangle Park) - A private, non-profit organization providing training and networking opportunities. CED hosts an annual conference to link companies with venture capitalists. North Carolina - WasteTrader - North Carolina's marketplace for discarded or surplus materials and products. This waste exchange service is designed to divert recoverable materials from disposal while providing feedstock's and supplies to potential users. The Occupational Safety and Health Division (OSHA) website of the U.S. Department of Labor contains compliance manuals, standards information, miscellaneous publications, statistics and free consultation request forms. NC Department of Labor (NCDOL) - Occupational Safety & Health Division NC Department of Labor (OSH regulations) The US General Services Administration - can help you with your EEO program. U.S. Department of Labor - Employment Laws |
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Environmental Permits, Licenses and Certifications One-stop environmental permits are issued by the North Carolina Department of Environment and Natural Resources (DENR). For information on Permits, Licenses and Certification or environmental questions, contact the DENR Customer Service Center. It Includes: |
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One Stop Permit Customer Service Center - DENR now has a one stop permit information and coordination program to provide assistance on all state and environmental permits. The CSC helps customers determine what environmental permits they need for a particular project as well as permit decision timelines. |
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Doing Business with the Government/Military
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