§ 105-129.83. (See notes) Eligibility; forfeiture. - North Carolina Statutes

§ 105‑129.83.  (Seenotes) Eligibility; forfeiture.

(a)        Eligible Business.– A taxpayer is eligible for a credit under this Article only with respect toactivities occurring at an establishment whose primary activity is listed inthis subsection. The primary activity of an establishment is determined basedon the establishment's principal product or group of products produced ordistributed, or services rendered.

(1)        Air courier serviceshub.

(2)        Aircraft maintenanceand repair.

(3)        Companyheadquarters, but only if the additional eligibility requirements of subsection(b) of this section are satisfied.

(4)        Customer servicecall centers.

(5)        Electronic shoppingand mail order houses.

(6)        Informationtechnology and services.

(7)        Manufacturing.

(8)        Motorsportsfacility.

(9)        Motorsports racingteam.

(10)      Research anddevelopment.

(11)      Warehousing.

(12)      Wholesale trade.

(b)        CompanyHeadquarters Eligibility. – A taxpayer is eligible for a credit under thisArticle with respect to a company headquarters only if the taxpayer creates atleast 75 new jobs at the company headquarters within a 24‑month period. Ataxpayer that meets this job creation requirement is eligible for credits underthis Article with respect to the company headquarters for three taxable yearsbeginning with the year in which the job creation requirement is satisfied. Ataxpayer that creates an additional 75 new jobs at the company headquarters ina 24‑month period during a three‑year eligibility period does notqualify for any extended eligibility period. However, a taxpayer that createsan additional 75 new jobs at the company headquarters in a 24‑monthperiod after the completion of a three‑year eligibility period iseligible for credits with respect to the company headquarters for an additionalthree taxable years beginning in the year in which the additional job creationrequirement is satisfied.

(c)        Wage Standard. – Ataxpayer is eligible for a credit under this Article in a development tier twoor three area only if the taxpayer satisfies a wage standard. The taxpayer isnot required to satisfy a wage standard if the activity occurs in a developmenttier one area. Jobs that are located within an urban progress zone or anagrarian growth zone but not in a development tier one area satisfy the wagestandard if they pay an average weekly wage that is at least equal to ninetypercent (90%) of the lesser of the average wage for all insured privateemployers in the State and the average wage for all insured private employersin the county. All other jobs satisfy the wage standard if they pay an averageweekly wage that is at least equal to the lesser of one hundred ten percent(110%) of the average wage for all insured private employers in the State andninety percent (90%) of the average wage for all insured private employers inthe county. The Department of Commerce shall annually publish the wage standardfor each county.

In making the wagecalculation, the taxpayer shall include any jobs that were filled for at least1,600 hours during the calendar year the taxpayer engages in the activity thatqualifies for the credit even if those jobs are not filled at the time thetaxpayer claims the credit. For a taxpayer with a taxable year other than acalendar year, the taxpayer shall use the wage standard for the calendar yearin which the taxable year begins. Only full‑time jobs are included whenmaking the wage calculation.

(d)        Health Insurance. –A taxpayer is eligible for a credit under this Article only if the taxpayerprovides health insurance for all of the full‑time jobs at theestablishment with respect to which the credit is claimed when the taxpayerengages in the activity that qualifies for the credit. For the purposes of thissubsection, a taxpayer provides health insurance if it pays at least fiftypercent (50%) of the premiums for health care coverage that equals or exceedsthe minimum provisions of the basic health care plan of coverage recommended bythe Small Employer Carrier Committee pursuant to G.S. 58‑50‑125.

Each year that a taxpayer claimsa credit or carryforward of a credit allowed under this Article, the taxpayershall provide with the tax return the taxpayer's certification that thetaxpayer continues to provide health insurance for all the jobs at theestablishment with respect to which the credit was claimed. If the taxpayerceases to provide health insurance for the jobs during a taxable year, thecredit expires, and the taxpayer may not take any remaining installment orcarryforward of the credit.

(e)        EnvironmentalImpact. – A taxpayer is eligible for a credit allowed under this Article onlyif the taxpayer certifies that, at the time the taxpayer claims the credit, thetaxpayer has no pending administrative, civil, or criminal enforcement actionbased on alleged significant violations of any program implemented by an agencyof the Department of Environment and Natural Resources and has had no finaldetermination of responsibility for any significant administrative, civil, orcriminal violation of any program implemented by an agency of the Department ofEnvironment and Natural Resources within the last five years. A significantviolation is a violation or alleged violation that does not satisfy any of theconditions of G.S. 143‑215.6B(d). The Secretary of Environment andNatural Resources shall notify the Department of Revenue annually of everyperson that currently has any of these pending actions and every person thathas had any of these final determinations within the last five years.

(f)         Safety and HealthPrograms. – A taxpayer is eligible for a credit allowed under this Article onlyif the taxpayer certifies that, as of the time the taxpayer claims the credit,at the establishment with respect to which the credit is claimed, the taxpayerhas no citations under the Occupational Safety and Health Act that have becomea final order within the past three years for willful serious violations or forfailing to abate serious violations. For the purposes of this subsection,"serious violation" has the same meaning as in G.S. 95‑127. TheCommissioner of Labor shall notify the Department of Revenue annually of allemployers who have had these citations become final orders within the pastthree years.

(g)        Overdue Tax Debts.– A taxpayer is not eligible for a credit allowed under this Article if, at thetime the taxpayer claims the credit or an installment or carryforward of thecredit, the taxpayer has received a notice of an overdue tax debt and thatoverdue tax debt has not been satisfied or otherwise resolved.

(h)        Expiration. – If,during the period that installments of a credit under this Article accrue, thetaxpayer is no longer engaged in one of the types of business described insubsection (a) of this section at the establishment for which the credit wasclaimed, the credit expires. If, during the period that installments of acredit under this Article accrue, the number of jobs of an eligible companyheadquarters falls below the minimum number required under subsection (b) ofthis section, any credit associated with that company headquarters expires.When a credit expires, the taxpayer may not take any remaining installments ofthe credit. The taxpayer may, however, take the portion of an installment thataccrued in a previous year and was carried forward to the extent permittedunder G.S. 105‑129.84. A change in the development tier designation ofthe location of an establishment does not result in expiration of a creditunder this Article.

(i)         Forfeiture. – Ataxpayer forfeits a credit allowed under this Article if the taxpayer was not eligiblefor the credit for the calendar year in which the taxpayer engaged in theactivity for which the credit was claimed. In addition, a taxpayer forfeits acredit for investment in real property under G.S. 105‑129.89 if thetaxpayer fails to timely create the number of required new jobs or to timelymake the required level of investment under G.S. 105‑129.89(b). Ataxpayer that forfeits a credit under this Article is liable for all past taxesavoided as a result of the credit plus interest at the rate established underG.S. 105‑241.21, computed from the date the taxes would have been due ifthe credit had not been allowed. The past taxes and interest are due 30 daysafter the date the credit is forfeited; a taxpayer that fails to pay the pasttaxes and interest by the due date is subject to the penalties provided in G.S.105‑236.

(j)         Change inOwnership of Business. – As used in this subsection, the term"business" means a taxpayer or an establishment. The sale, merger,consolidation, conversion, acquisition, or bankruptcy of a business, or anytransaction by which an existing business reformulates itself as anotherbusiness, does not create new eligibility in a succeeding business with respectto credits for which the predecessor was not eligible under this Article. Asuccessor business may, however, take any credit or carried‑over portionof a credit that its predecessor could have taken if it had a tax liability.The acquisition of a business is a new investment that creates new eligibilityin the acquiring taxpayer under this Article if any of the following conditionsare met:

(1)        The business closedbefore it was acquired.

(2)        The business wasrequired to file a notice of plant closing or mass layoff under the federalWorker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101, before itwas acquired.

(3)        The business wasacquired by its employees directly or indirectly through an acquisition companyunder an employee stock option transaction or another similar mechanism. Forthe purpose of this subdivision, "acquired" means that as part of theinitial purchase of a business by the employees, the purchase included anagreement for the employees through the employee stock option transaction oranother similar mechanism to obtain one of the following:

a.         Ownership of morethan fifty percent (50%) of the business.

b.         Ownership of notless than forty percent (40%) of the business within seven years if thebusiness has tangible assets with a net book value in excess of one hundredmillion dollars ($100,000,000) and has the majority of its operations locatedin a development tier one area.

(k)        Advisory Ruling. – Ataxpayer may request in writing from the Secretary of Revenue specific adviceregarding eligibility for a credit under this Article. G.S. 105‑264governs the effect of this advice. A taxpayer may not legally rely upon adviceoffered by any other State or local government official or employee acting inan official capacity regarding eligibility for a credit under this Article.

(l)         Planned Expansion.– A taxpayer that signs a letter of commitment with the Department of Commerce,after the Department has calculated the development tier designations for thenext year but before the beginning of that year, to undertake specificactivities at a specific site within the next two years may calculate thecredit for which it qualifies based on the establishment's development tierdesignation and urban progress zone or agrarian growth zone designation in theyear in which the letter of commitment was signed by the taxpayer. If thetaxpayer does not engage in the activities within the two‑year period,the taxpayer does not qualify for the credit; however, if the taxpayer laterengages in the activities, the taxpayer qualifies for the credit based on thedevelopment tier and urban progress zone or agrarian growth zone designationsin effect at that time.

(m)       (Effective fortaxable years beginning on or after January 1, 2010) Qualified CapitalIntensive Corporations. – A corporation that is a qualified capital intensivecorporation under G.S. 105‑130.4(s1) is not eligible for any credit underthis Article with respect to the facility that satisfies the condition ofsubdivision (2) of that subsection.  (2006‑252, s. 1.1; 2007‑491, s. 44(1)a;2009‑54, s. 3.)