Agenda - 05-18-2010 - 8b - Laserfiche WebLink

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Trade Zones (FTZs) across the state, providing a number of economic advantages for businesses involved in international trade. Zone 1193 is located in the Triangle, based at the Raleigh - Durham International Airport. Companies desiring the ability to delay tariff costs until goods are ready for the consumer market may apply for a FTZ sub -zone assignment at their Durham County facility. With this designation, raw goods may be imported, processed, assembled, re- packaged or otherwise manipulated on site with taxation occurring only once the product is ready for sale. Industrial Revenue Bond (IRB) Financing: Durham County 1RBs are supervised and approved by the state, but are issued through the Durham County Bond Authority. IRB funds may be used by a manufacturing corporation to finance land, buildings or equipment. The company must agree to pay its employees at least 110% of the average state weekly wage for the appropriate manufacturing industry. The bonds may only be used for the financing of manufacturing or industrial facilities and pollution control facilities for industry and/or related new equipment. Two types of bonds are available for business development. A Tax Exempt Bond does not subject the bond - holder's income to federal income tax; therefore the maximum bond amount is $10 million, and a firm may not hold more than $40 million outstanding nationwide. Taxable Bonds differ in that they are not exempt from federal taxes, but do remain exempt from state taxes. Because these bonds involve more risk for the borrower, there is no federal cap on the amount that may be borrowed. Investment Tax Credit: State of North Carolina If a corporation investing in Durham County makes a significant investment in machinery or equipment, it is eligible for a seven percent (7 %) tax credit on all investment dollars exceeding $1 million. If investment takes place within the State Development Zone, this $1 million threshold is no longer applicable, and the firm may take a credit on the total amount of funds. hi order to qualify, the employees of the firm in question must be hired at a wage equal to 110% of the state's average weekly wage (100% of state average if the jobs are located within the SDZ). All credits received must be taken in equal installments over the seven (7) years immediately following installment, and the equipment must remain in use within state and/or SDZ boundaries for those seven (7) years or credits will be forfeited. Downtown Prime Rate Loan Program: Downtown Durham, Inc This city program organizes local financial institutions, allowing them to provide low- interest business loans for the acquisition and rehabilitation of Downtown Durham properties, as well as purchase of capital equipment for downtown use. There is a maximum origination fee levied of one -half percent (0.5 %) and the minimum loan amount is set at $25,000. Currently eight (8) local banking institutions participate in this valuable funding assistance program Downtown Low Interest Loan Program: Downtown Durham, Inc. Administered by Downtown Durham, Inc. under authority of the city, the Low Interest Loan Program offers applicants that qualify for the Prime Rate Loan program the opportunity to have the city purchase up to one -half the loan from the bank at two percent (2 %) below prime, not to exceed $500,000. A one - half percent (0.5 %) origination fee will be charged, but the city will not involve themselves in further decisions made by the involved lenders. The result of the combination of the Low Interest Loan program and the Prime Rate program (see previous) is a loan provided at one percent (1 %) below prime to qualifying firms. Central Administrative Office Tax Credit: State of North Carolina If a corporation chooses to locate a central administrative office in Durham County, it is eligible to claim a seven percent (7 %) tax credit on the new investment, not to exceed $500,000. Requirements include the creation of forty (40) new full -time administrative positions and continued operation of the facility during the following taxable year. Investment is calculated from the cost of the property if owned; or, if the building is leased, the investment is equal to the cost of payments made over seven (7) years, plus any improvements made to the property. This credit is taken by the taxpayer in equal installments over a 411Page