New Legislation Could Mean Millions for NC Data Centers
October 1, 2015
Gov. Pat McCrory signed the North Carolina Competes bill into law Wednesday, following months of debate in the general assembly. This new legislation greatly enhances the state’s ability to recruit new jobs and capital investment projects. While the bill represents a significant compromise between the House and the Senate, it is nonetheless an important victory for economic development. The bill strengthens N.C.’s position in the global marketplace after nearly eight months of operating at a competitive disadvantage with other Southeastern states when it comes to incentives.
Summary of NC Incentives Changes | Scott Millar, 7x24 Exchange Carolinas Chapter Board Advisor
- Data Center Revisions: Beginning Jan. 1, 2016, sales taxes on electricity and sales taxes on any new or expanded facility construction and on data center equipment are exempted for data center commitments exceeding $75M within 5 years. Investments by tenant now qualify. The previous program was limited to ISP data centers commitments exceeding $225M in lower tier counties, and did not allow tenant investments to count toward the total.
- Single Sales Factor Apportionment: NC will move to Single Sales factor apportionment (or 1005 weighting based on slaes) for determination of NC Corporate Income taxes for multi-state corporations beginning in 2018. The current apportionment is 50% weighting of NC to US sales, 25% NC:US Payroll, 25% NC:US Personnel, phasing to 60/20/20 in 2016 and 66.67/16.67/16.67 in 2017.
- Corporate Income Tax Rate: NC will reduce the Corporate Income Tax to 3% when net General Fund tax collections exceed $20.975B.
- One NC: The One NC incentive is extended and the local match required by local governments is modified.
- JDIG: The Job Development Investment Grant program is modified to facilitate “high-yield projects” that
exceed $500M investment and create 1750 jobs, and increased available funds for the program from $15M to $20M (not including high yield funds). - Historic Preservation Credit extended for qualifying expenditures between $0-$10M (15%), $10-$20M (10%)
with additional 5% in targeted or distressed areas.
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