Doing business in Hertford County, North Carolina is profitable for new and expanding companies with legislation approved by the NC General Assembly.  Following is a summary of tax credits and incentives available for qualifying companies under the William S. Lee Act as amended. All credits can be taken against the income or franchise tax and have a 5-year carry-forward for each eligible year.  Total value of tax credits cannot exceed 50% of annual tax liability.  To qualify, the business must, for all full-time employees of the project, pay at least 50% of the premiums for health insurance that meets at least the minimum provisions of the basic health care plan of coverage recommended by the Small Employer Carrier Committee.  Finally, the business must have no citations under the Occupational Safety and Health Act that have become a final order within the previous three years for willful serious violations or for failing to abate serious violations with respect to the location for which the grant is made. 

Jobs Creation Tax Credit

Firms with at least 5 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. Tax credits per new job are $12,500.

Investment Tax Credit

The investment tax credit equals 7% of the excess value (above the applicable threshold) of machinery and equipment placed in service by eligible new or expanding firms. The credit is taken in equal installments over the 7 years after the machinery and equipment is first placed in service (generally when it is capitalized on the books). There is no applicable threshold in Hertford County.

Worker Training Tax Credit

Firms receive a worker training tax credit for training employees. Firms can take a credit of 50% against eligible expenses if the firm provides training for 5 or more employees (up to a $1,000 credit value for each employee trained). Firms must also be eligible for the jobs creation or investment tax credit.

Research and Development Tax Credit

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.

Large Investment Projects

Unused tax credits involving large investment, technology commercialization or substantial investment may be carried forward up to 20 years. Large investment credits involve $150 million or more of specific properties placed in service over a 2-year period. Technology investment must be in Tiers 1, 2 or 3 and involve $10 million per taxable year and $100 million over 5 years. Unused credit portions involving R&D may be carried forward for 15 years. New provision allows for credits up to 30% of eligible investment in purchased or leased real property. Requires $10 million to be invested within 3-year period and minimum of 200 jobs within 2 years in Tier 1 or 2 Area. Real property credits may be carried forward 20 years.

Job Development Investment Grant

In 2002, the NC General Assembly created a new economic development tool for new and expanding businesses in North Carolina. This tool will be used to attract businesses to the State by allowing a five-member committee to award grants to businesses. The amount of the grants will be based on income tax withholdings from new jobs created by the businesses (from 10% to 75% of withholding associated with the project). To be eligible for a grant under this program, the business must create a minimum number of new jobs and be of “strategic importance” for the state. The number of new jobs that must be created varies based on the enterprise tier designation of the location where the jobs will be located.

Other Financial Incentives

Firms locating or expanding in Hertford County receive additional incentives including access to a special utility 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.