AG 1998 11 16 - 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 county in which the firm operates determines the threshold value: · Tier 1 (10 most distressed counties) $0 · Tier 2 ('Next 15 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 i, 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 which the jobs are createad determines the amount of tax credit per job: · Tier 1 (10 most distressed counties) $12,500 · Tier 2 (Next 15 counties) $4,000 · Tier 3 (Next25 counties) $3,000 · Tier 4 (Next 25 co.unties) $1,000 · Tier 5 (Next 25 counties) $500 Worker Training Tax Credit (Effective date: July 1, 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 firm provides training for five or more employees. If 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 In addition to higher job creation and worker training tax credits, firms locating in Tier 1 counties receive access to a special utilities fund, priori~ 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 1, 1996) The credit eqtmls 4.5% of tangible personal business property capitalized under the tax code, up to a maximum single-year credit of $4,500. The credit is taken in five equaI installments beginning in the taxable year the property, is placed in service. Note: All business sectors are eligible for this credit. All tar credits can be taken against the income or franchise fox and have afire year carry-for3vard for each eligible year. The total value of credits cannot exceed 50% of annual tc~ liability. Eligible firms are in manufacturing and processing, warehousing and distribution, and data processing industries and pay at least 110% of the average county wage.