Business Costs

State Taxes  
 
Corporate Income Tax 6.9%
 
Franchise Tax $1.50 per $1,000 of the largest of the following:
 
  • Capital stock, surplus, and undivided profits.
  • 55% of appraised value of property subject to local taxation
  • Book value of real and tangible personal property in NC less debt that was created to acquire or improve real property in the state.
Unemployment Insurance Tax Standard beginning rate is 1.2%. The taxable wage base is $17,800. Maximum tax rate is 6.84% Avg. cost is $249.77/employee.
 
Workers Compensation Tax Index Rate is 2.12 (37th out of 50 states)
 
State Sales Tax 4.25%
 
Local Taxes  
Property Tax Local property taxes range from 30.5/$100 valuation to $1.07/$100 valuation.
 
Example: taxation on $3,000,000 value of building & equipment -- based on .50 tax rate -- 3,000,000 X .0050 = $15,000 -- Property tax for M&E is aligned with depreciation schedule
 
Sales Tax 2.5%
 

Low Business Tax Burden
A 2009 business tax analysis by Ernst & Young on all 50 states ranked North Carolina as having the 3rd lowest business tax burden among all states. State and local business taxes generated 36.2% of all taxes generated, third lowest in the nation. The national average is 44.1%. NC also has the lowest effective tax rate among the 50 states and the District of Columbia. This includes the percentage of all business taxes to the private sector gross state product.
Tax Advantages
  • Industrial machinery is taxed at 1% with a maximum of $80 per item
  • Raw materials used for production, packaging, and shipping, as well as items bought for resale, are exempt
  • No inventory tax
  • Tax credits for job creation, machinery and equipment, R&D, business property, imports/exports (for using NC ports), alternative energy use
  • Equipment or facilities installed for purposes of recycling solid waste is exempt from property tax
  • No sales tax on electricity or natural gas used in the manufacturing process
Building Costs
 
  • Lease cost for existing industrial building:  
 $1.50 - $3.00/sq. ft.
  • Purchase cost for existing industrial building:  
 $10/sq. ft. -- $25/sq. ft.
  • Construction cost for new industrial construction:  
 $35 - $55/sq. ft.
 
Land/Site Costs  
  • Cost range for industrial sites:
        (with infrastructure)
$4,000 -- $50,000/acre
 

Electrical Costs
  • Electrical costs are below national costs
  • Avg. KW/hour cost will average around .06
NORTH CAROLINA'S SOUTHEAST
The Regional Economic Development Marketing Organization For Southeastern North Carolina
707 West Broad Street, P.O. Box 2556, Elizabethtown, NC 28337
Phone: 800-787-1333 Fax: 910-862-1482
 
 
 
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