Other Cost-Saving Programs
Foreign Trade Zones - Provides opportunities to defer, reduce and/or eliminate import duties.
Industrial Revenue Bonds - Provides tax-exempt financing for eligible new or expanded manufacturing facilities, certain solid waste disposal facilities and sewage disposal facilities.
Community Development Block Grants and Industrial Development Fund - Provides grants and loans for infrastructure development to eligible local governments.
Road Access and Rail Access Programs - Provides funds for the construction of roads and rail access to new or expanded industrial facilities.
Recycling Business Assistance Center - Provides grants, tax credits and loans to businesses involved with recycling in North Carolina.
North Carolina Biotechnology Center - Provides loans and matches to help leverage larger financial awards for biotechnology companies.
Film incentives - Provides tax credits and sales and use tax discounts to encourage film and television production in North Carolina.
Sales and Use Tax Discounts, Exemptions and Refunds
North Carolina offers reduced rate allowances on certain parts, accessories and construction supplies for eligible industries and manufacturing processes.
For example:
- Industrial machinery and equipment is exempt from sales and use tax but is subject to an excise tax. This rate is 1 percent with a maximum of $80 per item.
- Parts and accessories to manufacturing machinery, which include most supplies used in the manufacturing process but not becoming a part of the manufactured product, including pollution abatement equipment, are taxed at 1 percent.
- Purchases of ingredients or component parts of manufactured products are exempt from sales or use tax.
- Packaging containers and items that become part of a manufactured product and are delivered with the product to the customer are exempt from sales and use tax.
- Bioprocessing, pharmaceutical and medical manufacturing and distribution, aircraft manufacturing, computer manufacturing and semiconductor manufacturing companies may receive a refund of sales taxes on purchases of building materials, fixtures and equipment if the facility costs at least $50 million in Tier 1 counties and $100 million in Tier 2 and 3 counties.
- Sales of electricity to manufactures are taxed at a rate of 1.8%. Effective July 1, 2008, the rate will decrease to 1.4%; effective July 1, 2009 the rate will decrease to .8%; and effective July 1, 2010, sales of electricity to manufacturers for qualifying purposes will be exempt from sales and use tax.
- Sales of electricity and eligible business property to an internet service provider or web search portal business that invests at least $250 million in private funds are exempt from sales and use tax.
- Piped natural gas is exempt from sales and use tax but is subject to an excise tax. This tax rate is based on the number of therms of gas consumed in a month.
- Coal, coke and fuel oil used in manufacturing is taxed at 1 percent.
- Motor vehicles are exempt from sales and use tax but are subject to the highway use tax. Highway use tax is 3 percent of the retail value of the motor vehicle with a maximum tax of $1,500 per vehicle.
- Aircraft, boats, railway cars and mobile offices are taxed at 3 percent with a maximum tax of $1,500 per item.
- Custom computer software and computer software delivered electronically are exempt from sales and use tax.
- All telecommunications services are taxed at a rate of 6 percent.
Recovery Zone Bonds
A recovery zone is any area designated by the issuer as having "significant poverty, unemployment, rate of home foreclosures or general distress." View a Webinar on Recovery Zone Bonds. Read More
