AG 1998 08 17 - Laserfiche WebLink

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Corporate Income Tax Red'uctlofl The corporate income tax will be reduced from 7.75% to 6.9% over four years (to 7.5% in 1997, 7.25% in 1995, 7.00% in 1999, and 6.90% in 2000). ' .... Investment Tax Credit (Effective datec ~lugust L 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 ia 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 county in which the firm operates determines the threshold value: · Tier I (10 most distressed counties) $0 · Tier 2 (Next I5 counties) $100,000 · Tier 3 (Next 25 counties) $200,000 · Tier4 (Next 25 counties) $500,000 · Tier 5 (Next 25 counties) $1,000,000 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 whkh the .jobs are createad determines the amount of mx credit perjob: · Tier i (10 most distressed counties) $12,500 · Tier2 (Next 15 counties) $4,000 · Tier 3 (Next 25 counties) $3,000 · Tier4 (Next 25 counties) $1,000 · Tier 5 (Next 25 counties) $500 Worker Training Tax Credit (Effective date: July I, 1997). Firms eligible for the job creation or investment tax credit can take a credit of 50% (up to $500 credit value for each employee trained) against eligible training expenses if the finn provides training for five or more employees. If the firm is located in Tier l the maximum credit is $l,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 In addition to higher job creation and worker training tax credits, firms locating in Tier 1 counties receive access to a special utilities fund, priority status for CDBG Economic Development grants, and waiver of local match requirements for CDBG Economic Devel0P,~ent grants and Industrial Development Fun. d loans and grants. Business Property Tax Credit (Effective date: August I, 1996) The credit equals 4.5% of tangible persona. I business property capitalized.under the tax code, up to a maximum single-year credit of $4,500. The credit is t~:ken in five equal installments beginning in the taxable year the property is placed in service. Note: dJ. LbuMness sectors are eligible far this credit. Alt ta~ credits can be taIcen against the income ar franchise tax and have afire year carry-forward for each eligible year. The total value of credits cannot exceed 50~ of annual tax liability~ £1igible firrn$ are in manufacturing and processing, warehousing and distribution, and data processing industries and pay ar leasr 110% of the crverage county wage. ~- ~-