Job Development Investment Grant
The Job Development Investment Grant (JDIG) is a discretionary incentive that provides sustained annual grants to new and expanding businesses based on a percentage of new employees’ withholding taxes.
- These cash grants can be used by the company for whatever purpose desired and are not tied to qualified expenses or other such requirements.
- Grants may be awarded up to $6,500 per year, per eligible position, but may not exceed 75 percent of withholdings for each position. There is no cap on how many JDIG grants may be awarded in a single grant year.
- The amount of the grant is calculated by weighing a number of key factors to determine the significance of the project and include the number of net new jobs, the wages of the jobs compared to the county average wage, whether or not the capital investment anchors the company in the community, and whether the industry is one of the state’s targeted industry sectors
- Award amounts are also dependent, in part, upon the location of the project based on North Carolina’s Tier Designation System. Additionally, in Tier 3 counties (i.e. North Carolina’s more economically prosperous counties), 25 percent of the total JDIG grant is transferred to a utility account (15 percent in Tier 2), which helps fund infrastructure projects in less prosperous parts of the state.
- Grant funds are disbursed annually, for up to 12 years, to approved companies based on a percentage of withholding taxes paid by new employees, following satisfaction of performance criteria set out in grant agreements.
- A five member Economic Investment Committee evaluates projects and makes decisions regarding JDIG awards.
The One North Carolina Fund is a grant program administered by the North Carolina Department of Commerce.
- Depending on the project, One North Carolina Fund awards typically range from $1,000/job in more economically prosperous counties to $3,000/job in less prosperous counties.
- Funds may be used for infrastructure improvements, equipment purchase or installation, and/or existing building renovation/expansion.
- Qualifying companies must agree to meet an average wage test.
- Local governing agencies must agree to match a company’s financial assistance via cash, fee waivers, in-kind services, land donations, or other asset/infrastructure provisions.
The Building Reuse Program awards grants and loans to local governments to renovate and/or expand existing buildings. Qualified projects must lead to the creation of new, full-time jobs.
- Awards can be up to $10,000/job. The maximum grant award is $500,000 or one-half of the total project cost, whichever is less.
- Funds may be use to expand existing building infrastructure, including vacant buildings, vacant properties, and health care facilities.
- Proposed projects must be located in one of North Carolina’s less prosperous counties (Tier 1 or Tier 2) as defined by North Carolina’s Tier Designation System, or in a rural census tract in a Tier 3 county.
- Priority will be given to projects in communities with a population of less than 5,000.
- Each grant amount must have a cash match. The local government must contribute at least 5 percent of the cash match. No amount of the match may come from other State or Federal grant funds.
The Industrial Development Fund’s Utility Account issues grants to help create and retain jobs by funding infrastructure improvements.
- Funds may be used for construction and/or improvement.
- Qualifying industries include manufacturing, non-retail, and non-entertainment. Non-manufacturing projects must adhere to North Carolina’s weekly wage standards to qualify for funding.
- Proposed projects must be located in one of North Carolina’s less economically prosperous counties (Tier 1 or Tier 2) as defined by North Carolina’s Tier Designation System.
- Matching requirements will be waived if project is located in one of North Carolina’s 25 least prosperous counties as defined by the tier system.
The Economic Infrastructure Program awards funds to local governments for infrastructure projects that will lead to new, full-time job creation.
- Grants of up to $500,000 typically range from $5,000/job in the state’s most economically prosperous counties to $12,500/job in the state’s least prosperous counties as defined by North Carolina’s Tier Designation System.
- Grant funds may be used for infrastructure improvements including, but not limited to, utility upgrades or construction, road construction, and public rail spur improvements.
- Funding levels are based on North Carolina’s Priority Industry Table, weekly wage standards, and employer-paid health insurance coverage.
Foreign Trade Zones
There are four Foreign (Free) Trade Zones (FTZ) in North Carolina. All zones are transitioning to the Alternative Site Framework, making it easier and sometimes more cost-efficient for companies to use FTZ services. Several subzones are also approved for use by individual manufacturers. Foreign or domestic merchandise may enter these areas without a formal customs entry or the payment of customs duties or government excise taxes and without a thorough examination. If the final product is exported from the United States, no custom duty is levied. If the final product is imported into the U.S., duty and excise taxes are due at the time of transfer from the foreign trade zone and formal entry is made into the U.S. Duty is paid on the product itself or its imported parts, whichever is lower.
Industrial Revenue Bonds
Counties establish authorities to issue industrial revenue bonds, which provide tax-exempt financing for eligible new or expanded-product manufacturing facilities, distribution centers, and research and development facilities necessary to the manufacturing process. The maximum tax-exempt bond amount is $10 million. Qualifying projects must include local support, a commitment to locate in an area of severe unemployment, the procurement of required environmental permits, the creation of a sufficient number of jobs to impact the local economy (a minimum of six jobs per $1 million of bonds), and the assurance that the new financing will not result in the company closing another North Carolina facility.
Road Access and Rail Access Programs
Administered by the Department of Transportation, this program allocates funds to construct roads that provide access to new or expanded industrial facilities. An access review committee comprised of representatives of the Department of Transportation performs a technical review of a requested project and makes recommendations about traffic and safety concerns. Approval is based upon the resulting economic benefits of the project including the number of new jobs created, the amount of capital investment, the highway’s use and the area’s economic conditions.
The Golden LEAF Foundation is an independent, 501(c)(3) public charity that provides grant assistance to transform rural, tobacco-dependent and economically distressed communities in North Carolina. Eligible state, regional, and local economic development entities may apply for a Golden LEAF grant to support permissible activities like public infrastructure construction, training assistance and/or specialized equipment purchases, that lead to job creation in tobacco-dependent or economically distressed areas.
Accelerated Permitting for Site Development, Facility Construction
Accelerated permitting for projects is available at both the State and local levels. Local environmental and physical project permits will be expedited. Any required State environmental permits can be formally expedited by the Department of Environment and Natural Resources (DENR) by paying a nominal fee, depending on the type of permit.
Community Development Block Grants
A local government applicant (municipal or county, excluding entitlement cities or designated urban counties) may apply for the Community Development Block Grant to help fund a proposed project that involves a specific business that will create new jobs (or in limited situation, retain existing jobs).
- Grant funding may cover public facilities improvements when needed to serve the target business. Public facility projects may provide grants of up to 75 percent of the proposed facility costs, with a 25 percent cash match to be paid by the local government applicant. Maximum CDBG Grant is $1 million based on tier and number of jobs.
- Assisted project activities must benefit persons (60% or more) who were previously in a low or moderate family income (LMI) status within the last 12 months, based on income levels published annually by the US Department of Housing and Urban Development (HUD).
- Grants for projects located in Tier 1 counties do not require a local match.
The North Carolina Biotechnology Center offers a variety of business loans, research grants, and other financial support for emerging life science companies across the state.
Major Tax Credits
Research and Development Tax Credit
The R&D Tax Credit is based on a percentage of qualified research expenses with the highest credit amounts awarded for research performed by North Carolina universities. Businesses with qualified North Carolina research expenses are allowed a credit equal to a percentage of those expenses. The credit is scheduled to sunset on January 1, 2016.
Renewable Energy Tax Credits
A taxpayer who constructs, purchases, or leases renewable energy property and places it in service in North Carolina during a taxable year is allowed a tax credit equal to 35% of the cost of the property. The tax credit for renewable energy property that serves a non-business purpose must be taken for the taxable year in which the property is placed in service. The credit is scheduled to sunset on January 1, 2016.
Recycling Facilities Tax Credit
An owner that purchases or leases machinery and equipment for a major recycling facility in this State is allowed a credit equal to 50% of the amount payable by the owner during the taxable year to purchase or lease the machinery and equipment. This credit has no sunset date.
North Carolina has implemented a new Film and Entertainment Grant program. Funds from the $10 million program can serve as a rebate of up to 25% on qualified expenses/purchases of productions. North Carolina Film Office
North Carolina State Contact: Economic Development Partnership of North Carolina
Tiffany McNeil, Client Services Manager
15000 Weston Parkway
Cary, North Carolina 27513 Incentive and tax information is provided to Area Development by each state's economic development or commerce agency for information purposes only and is subject to revision at any time by the state government. Please contact the state agency directly for full requirements and offerings. This information was last updated October 2015.