Category: North Carolina

North Carolina Credits and Incentives

As we’ve mentioned before, our Georgia clients frequently ask us to investigate potential credits and incentives in other states where they have operations, potential acquisitions or strong relationships with customers or vendors. In addition, private equity groups ask us about potential $$ for their portfolio companies.

We were recently asked about credits and incentives in North Carolina, and we spoke with several North Carolina local and state-level economic developers.  What we found was quite surprising.

North Carolina’s main economic development tax credits covering new capital investments and new jobs ended 12/31/13 (!!!).  The legislature decided to lower overall business and personal tax rates and simplify the overall state tax environment as their main economic development strategy.

As of 1/1/14, North Carolina’s credits and incentives are less complicated than many states, but are now far less generous. 

  • One North Carolina Fund: Potential for discretionary grants. It is funded in part by state government and matched locally (county/city). It requires increased headcount (for new or existing businesses) and at least $3 million in capital investment (land, building, or equipment). Click here for more info.
  • Customized Training Program:  no cost to company, provided by local community college (click here).
  • Other incentives include a tax credit for Research and Development, one for Interactive Digital projects, and an Incumbent Workforce Development Program Grant up to $40K cap per company (clickhere).

Compared to Georgia, North Carolina has:

  • A far narrower range of targeted incentives and credits.
  • A narrower range of companies eligible for incentives.    
  • A simple approach to determining company qualifying activities and $$ incentive amounts, what few there are.

To summarize, North Carolina is making a bold bet that lower rates and a simpler tax structure are more effective than credits and incentives for promoting the state’s economic development.

Economic developers and policymakers across the nation will be watching how this approach turns out.  We’ll keep you posted!