House Introduces New Incentives For Businesses
North Carolina House lawmakers have introduced a package of tax incentives designed to lure more businesses to the state.
The bill replenishes the state’s main fund to offer tax breaks to businesses, adding more than $20 million immediately. Governor Pat McCrory has said he needs the money to attract businesses currently considering a move. But lawmakers and advocacy groups on both sides of the ideological spectrum have questioned the program’s effectiveness.
Bill sponsor, Representative Charles Jeter, says it’s a necessary evil.
“In a perfect world there would be no incentives. We don’t live in a perfect world,” says Jeter, a Mecklenburg County Republican. “We live in a world where other states, particularly our border states, are doing incentives. So, we can sit here and be ‘right’ on the ideological issue that we should not do incentives, and we can watch all these other states that will do them, and we can be left out in the cold.”
Under the bill, North Carolina can continue striking deals through 2020, giving no more than $15 million each year.
- The bill also extends a $2.5 million cap on the sales tax airlines pay for jet fuel—a major priority for American Airlines.
- It exempts new data centers from the sales tax.
- It transfers $20 million into a Commerce Department fund to subsidize infrastructure when businesses develop a new site.
- It cuts the share of corporate taxes large manufacturing facilities will pay for land and personnel.
Jeter says he expects the bill to move through committee and pass the House next week.
The measure does not include an expected “crowd-funding” provision to help small businesses raise money by crowd-funding. Jeter says it was too complicated, but will still be introduced on its own.
Also, it leaves out an extension of the Historic Preservation Tax Credit, pushed for by local governments and McCrory.