Davie County Performance-Based Incentive Programs
There are a number of performance-based incentive programs designed to support major relocation and expansion projects. These projects expand the tax base, provide quality jobs for Davie County residents, promote economic development and help provide a more secure economic future for the region. We will be glad to work with you to assemble the right combination of local, state, regional and federal incentives to lower the overall costs of doing business in Davie County.
There are a variety of programs available to assist private businesses in Davie County. Eligibility to participate in these programs is typically based on a business’s ability to make a positive impact on the local or regional economy.
While some of these programs are designed to provide government funded infrastructure improvements, there are also economic development grants that come in the form of low-interest loans to private businesses for investments that result in positive economic development.
Incentives are developed and evaluated based on the amount of the investment and the number of jobs created. The Davie County Economic Development Commission will be happy to speak with you about suitable incentive packagesfor local business investment.
STATE AND FEDERAL INCENTIVES
Companies that meet certain requirements can take advantage of tax credits and other incentives including sales and use tax discounts, exemptions and refunds, discretionary programs, and other cost-saving programs. Some of these programs are highlighted below.
- Article 3J Tax Credit – Provides tax credits to qualifying businesses for job creation, investment in business property and in some cases investment in real property.
- William S. Lee (Article 3A) Tax Credit – Repealed for business activities that occur on or after January 1, 2007. Article 3J Credits became effective for taxable years beginning on or after January 1, 2007.
- Research and Development Tax Credit – Provides tax credits for qualified North Carolina research expenses during a taxable year.
- N.C. Ports Tax Credit – Provides tax credits towards income taxes paid by businesses or individuals using NC port facilities at Morehead City and Wilmington.
- Renewable Energy Tax Credit – Provides a tax credit of 35% of the cost of renewable energy property.
- Job Development Investment Grant – Provides a limited number of cash grants to new and expanding businesses that provide economic benefits to the State, and that need the grant to carry out the project in North Carolina.
- One North Carolina Fund – Awards grants for job creation and/or retention in conjunction with local government matches.
- SBIR/STTR Small Business Technology Funding – Awards matching funds to firms who have been awarded a SBIR/STTR Phase I award from the federal government.
- Site and Infrastructure Grant Fund – Provides assistance for site development and infrastructure improvements for very high-impact projects.
- Job Maintenance and Capital Development Fund – Provides a limited number of grants to businesses with at least 2,000 employees, which are located in Development Tier 1 counties and which invest at least $200 million in capital improvements providing economic benefits to the State.
OTHER COST SAVINGS PROGRAMS
- Foreign Trade Zones – Provides opportunities to defer, reduce and/or eliminate import duties.
- Industrial Revenue Bonds – Tax-exempt financing for eligible new or expanded manufacturing facilities, certain solid waste disposal facilities and sewage disposal facilities.
- Community Development Block Grants and Industrial Development Fund – Provides grants and loans for infrastructure development to eligible local governments.
- Road Access and Rail Access Program – Provides funds for the construction of roads and rail access to new or expanded industrial facilities.
- Recycling Business Assistance Center – Provides grants, tax credits and loans to businesses involved with recycling in North Carolina.
- North Carolina Biotechnology Center – Provides loans and matches to help leverage larger financial awards for biotechnology companies.
- Film Incentives – Provides tax credits and sales and use tax discounts to encourage film and television production in North Carolina.
SALES & USE TAX DISCOUNTS, EXEMPTIONS AND REFUNDS
North Carolina offers reduced rate allowances on certain parts, accessories and construction supplies for eligible industries and manufacturing processes. For example:
- Industrial machinery and equipment is exempt from sales and use tax but is subject to an excise tax. This rate is 1 percent with a maximum of $80 per item.
- Parts and accessories to manufacturing machinery, which include most supplies used in the manufacturing process but not becoming a part of the manufactured product, including pollution abatement equipment, are taxed at 1 percent.
- Purchases of ingredients or component parts of manufactured products are exempt from sales or use tax.
- Packaging containers and items that become part of a manufactured product and are delivered with the product to the customer are exempt from sales and use tax.
- Bioprocessing, pharmaceutical and medical manufacturing and distribution, aircraft manufacturing, computer manufacturing and semiconductor manufacturing companies may receive a refund of sales taxes on purchases of building materials, fixtures and equipment if the facility costs at least $50 million in Tier 1 counties and $100 million in Tier 2 and 3 counties.
- Sales of electricity to manufacturers are taxed at a rate of 1.8%. Effective July 1, 2008, the rate will decrease to 1.4%; effective July 1, 2009 the rate will decrease to .8%; and effective July 1, 2010, sales of electricity to manufacturers for qualifying purposes will be exempt from sales and use tax.
- Sales of electricity and eligible business property to an internet service provider or web search portal business that invests at least $250 million in private funds are exempt from sales and use tax.
- Piped natural gas is exempt from sales and use tax but is subject to an excise tax. This tax rate is based on the number of therms of gas consumed in a month.
- Coal, coke and fuel oil used in manufacturing is taxed at 1 percent.
- Motor vehicles are exempt from sales and use tax but are subject to the highway use tax. Highway use tax is 3 percent of the retail value of the motor vehicle with a maximum tax of $1,500 per vehicle.
- Aircraft, boats, railway cars and mobile offices are taxed at 3 percent with a maximum tax of $1,500 per item.
- Custom computer software and computer software delivered electronically are exempt from sales and use tax.
- All telecommunications services are taxed at a rate of 6 percent.
For more information, contact Terry Bralley, President of the Economic Development Commission at 336-751-2714 or Terry.Bralley@daviecounty.com.