AG 1999 08 30 - Laserfiche WebLink

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Corporate Income Tax Reduction The corporate income tax will be reduced from 7.75% to 6.9% over four years (to 7.5% in 1997, 7.25% in 1998, 7.00% in 1999, and 6.90% in 2000). Investment Tax Credit (Effective date: August 1, 1996) The investment tax credit equals 7% of the excess value (above the applicable threshold) of machinery and equipment placed in service in NC by eligible new or expanding firms. The credit is taken in equal installments ' over the seven years after the machinery, and equipment is first placed in service (generally when it is capitalized on the books). The "enterprise factors" of the coun~ in which the firm operates determines the threshold value: · Tier I (I0 most distressed counties) $0 · Tier 2 (Next 15 counties) $100,000 · Tier 3 (Next 25 counties) $200,000 · Tier 4 (Next 25 counties) $500,000 · Tier 5 ('Next 25 counties) $I,000,000 Job Creation Tax Credit (Effective date: August 1, 1996) The legislation increases an existing credit for job creation and expands it from 50 to all 100 counties. Firms with at least five full-time employees working 40 or more weeks during the taxable year can take a credit for each new job created, taken in equal installments over four years. The Enterprise Factor of the area in whic~ the jobs are createad determines the amount of tax credit per job: · Tier I (!.0 most distressed counties) $12,500 · Tier 2 (Next 15 counties) $4,000 · Tier 3 (Next 25 counties) $3,000 · Tier 4 (Next 25 counties) $1,000 · Tier 5 (Next 25 counties) $500 Worker Iraining Tax Credit (Effective dare: July 1, 1997) Firms eligibie for the job creation or investment tax credit can take a credit of 50°/Q (up to $500 credit value for each employee trained) against eligible training expenses if the firm provides training for five or more employees. [f the firm is located in Tier i the maximum credit is $1,000 per employee. Research and Development Tax Credit (Effective date: July 1, 1996) The R&D tax credit enables firms that qualify, for the federal Research and Experimentation Tax Credit to take a state tax credit equal to 5% of the state's apportioned share of the taxpayer's expenditures for R&D. Additional Benefits for "Tier 1" Firms -- [n addition to higher job creation and worker training tax credits, firms locating in Tier I. counties receive ac:ess to a sgecia[ utilities fund, priority status for CDBG Economic Development grants, and waiver of local match. requirements for CDBG Economic Development grants and Industrial Development Fund loans and grants. -- Business Property. Tax Credit (Effective date: August I, 1996) The cred[t equals 4.5% of tangible personal business property, capitalized under the tax code, up to a maximum single-year credit of 54,500. The credit is taken in five equal installments beginning in the taxable year the prope,?' is placed tn ser','ice. :'vote: Ail business sectors are eligible for this credit. Ali tax credits can be taken against the income or.franchise tc~ and have afire year carry.'-forward for each eligible year. The total value of credits cannot exceed $0% of annztal ta_~ liability. Eligible firms are in manufacturing and processing, *varehousing and distribution, and data processing industries and pay. at least II0% of the average county wage.