Article 3J Tax Credits

  • Provides four types of tax credits (may offset up to 50% of state income and franchise liability) for qualifying activities: 
  • Credit for creating jobs- tax credit for each new job created after meeting minimum threshold.
  • Credit for investing in business property- based on the percentage of the cost of capitalized tangible personal property.

 

 

 

Credit for job creation

Credit for investing in business property

County

Tier designation

Wage standard

Job threshold

Credit per job

Investment amount

Credit %

Anson

1

None

5

$12,500

$0

7%

Bladen

1

None

5

$12,500

$0

7%

Brunswick*

3

$574

15

$750

$2 million

3.5%

Columbus

1

None

5

$12,500

$0

7%

Cumberland

2

$589

10

$5,000

$1 million

5%

Hoke

1

None

5

$12,500

$0

7%

Montgomery

1

None

5

$12,500

$0

7%

New Hanover†*

3

$662

15

$750

$2 million

3.5%

Pender*

3

$499

15

$750

$2 million

3.5%

Richmond

1

None

5

$12,500

$0

7%

Robeson

1

None

5

$12,500

$0

7%

Sampson

2

$534

10

$5,000

$1 million

5%

Scotland

1

None

5

$12,500

$0

7%

These counties have AGZ or UPZ designations. The job threshold in AGZ/UPZ is 5 jobs and the credit amount is $1,000 per job (an additional $2,000 can be added if employing a resident of the zone or a long-term unemployed worker). The investment amount is $0 and credit is at 7%.

*These counties have Port Enhancement Zones. Company locations within the PEZ are treated as Tier 1 for the purpose of incentives. Please see any Tier 1 county above for job threshold, investment criteria and credit amount.

  • Credit for investing in real property (Tier 1 and Port Enhancement Zones only)- tax credit equal to 30% of the real property investment. *Must invest $10 million in real property within three years and create 200 jobs within two years to be eligible.
  • Technology development (TD) tax credit- tax credits for research expenses.
  • Small businesses (annual receipts less than $1 million) are allowed a 3.25% credit for research expenses.
  • Tier 1 and PEZ businesses are also allowed a 3.25% credit for research
  • Research performed in an eco-industrial park is allowed a 35% tax credit on expenses
  • Other qualified expense rates for TD tax credit:
    • $0-$50 million – 1.25%
    • $50-$200 million – 2.25%
    • $200 million and up – 3.25%
    • 20% credit for research expenses for research conducted by the University of North Carolina system.
  • Eligibility requirements:
    • Eligible business types: Aircraft maintenance and repair, air courier services hub, company headquarters (must create 75 new jobs), customer service call centers, electronic shopping and mail-order houses, information technology and services (internet service providers, software publishers, computer system design), manufacturing, motorsports facility, motorsport racing team, research and development, warehousing or wholesale trade.
    • Average wage must meet or exceed wage scale for Tier designation.
    • Must offer health insurance for all full-time positions.
    • No environmental violations in the prior two years.
    • No serious OSHA violations in the prior three years.
    • No overdue taxes.