Capital Opportunities for Small Businesses - sbtdc

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C A P I T A L O P P O R T U N I T I E S F O R SMA L L B U S I N E S S E S the taxpayer is eligible to claim an installment of the credit for creating jobs; or the employee is being trained to operate machinery and equipment for which the taxpayer is eligible to claim an installment of the credit for investing in machinery and equipment. The credit is taken for the taxable year in which the machinery and equipment are placed in service. The credit is not taken in installments. Credit for Investing in Central Office or Aircraft Facility Property If a taxpayer who has purchased or leased real property in the State begins to use the property as a central office or aircraft facility during the taxable year, the taxpayer is allowed a credit equal to 7 percent of the eligible investment amount. A central office must have the role of administering, overseeing, and managing branches of the same company or enterprise. To be eligible, the taxpayer must create a minimum of 40 new jobs at the office either in the year the taxpayer first uses the property as a central office or aircraft facility, or in the preceding 24 months while using temporary space for central office functions. If the taxpayer uses only part of the property as a central office or aircraft facility, the amount of credit is reduced in proportion to the percentage of the property put to other use. If during the seven years in which this installment credit accrues, either the property is no longer used as a central office or the total number of the taxpayer’s central office employees in the State drops below 40, the credit expires. The maximum credit allowed a taxpayer under this section for property used as a central office or aircraft facility is $500,000. The credit is taken in seven equal installments beginning the year after the taxpayer qualifies for the credit. Credit for Substantial Investment in other Property A taxpayer who purchases or leases real property in an enterprise tier one or two area and begins to use the property in an eligible business during the taxable year is allowed a credit equal to 30 percent of the eligible investment amount. To be eligible for this credit, the taxpayer must receive a written determination from the Secretary of Commerce that the taxpayer is expected to purchase or lease and use in an eligible business at that location within a three-year period at least $10 million of real property and that the location that is the subject of the credit will create at least 200 new jobs within two years of the time the property is first used in an eligible business. The credit is taken in seven equal installments beginning the year after the taxpayer qualifies for the credit. The credit expires if the total number of employees at the property with respect to which the credit is claimed drops below 200. NC Department of Commerce, Commerce Finance Center 4310 Mail Service Center Raleigh, NC 27699-4318 919.733.4151 www.nccommerce.com/finance/ Other Tax Credits and Incentives for Businesses North Carolina offers a number of opportunities to businesses in the form of tax credits and incentives. 76
C A P I T A L O P P O R T U N I T I E S F O R SMA L L B U S I N E S S E S North Carolina Ports Tax Credit Importers and exporters who use the North Carolina ports at Morehead City and Wilmington can qualify for a tax credit. This tax credit can be earned on cargo wharfage and handling fees exceeding the company’s average for the last three years inclusive of the current tax year. The excess of those fees for wharfage and handling paid directly or indirectly to the North Carolina State Ports Authority can be credited against the taxes due the state, up to 50 percent of the total tax liability for each tax year. Any unused credit may be carried forward for five years for a total credit of up to $2 million. This NC Ports Tax Credit has been repealed effective 1/1/2014. North Carolina State Ports Authority POB 9002 Wilmington, NC 28402 800.334.0682 www.ncports.com NC Agricultural Finance Authority Farm Ownership Loan Program The program offers farm ownership loans up to $300,000 for those unable to obtain credit from other sources. The loans are restricted to owners or prospective owners of family-sized farms. Loans may be used to buy, improve, or enlarge farms and are made at the prime rate plus 1.75 percent. The terms for repayment are 15 years. These loans are offered in conjunction with Farm Service Agency loan guarantees of up to 90 percent of the principal. Agribusiness Loan Program The North Carolina Agricultural Finance Authority (NCAFA) makes agribusiness loans to firms involved in processing and marketing activities, which provide “value added” products that increase the profitability to North Carolinians. The loans are made available through the USDA’s Rural Development Business and Industrial Loan Program and are guaranteed by the USDA. Agricultural Development Bonds Agricultural Development Bonds (ADBs) are tax-exempt bonds issued by the North Carolina Agricultural Finance Authority, which has authority under the North Carolina General Statutes (Chapter 122D) to issue bonds for many purposes. ADBs can be used to finance a wide range of agricultural projects that involve the processing or manufacturing of agricultural products as long as the projects qualify for federal tax exemption under the Internal Revenue Code. North Carolina Agricultural Finance Authority POB 27908 Raleigh, NC 27611-7908 919.790.3949 www.stateagfinance.org/types.html 77
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