2005 North Carolina Code - General Statutes Article 3C - Tax Incentives for Recycling Facilities.
Article 3C.
Tax Incentives For Recycling Facilities.
§ 105‑129.25. Definitions.
The following definitions apply in this Article:
(1) Reserved.
(2) Reserved.
(3) Large recycling facility. A recycling facility that qualifies under G.S. 105‑129.26(b).
(4) Machinery and equipment. Engines, machinery, tools, and implements used or designed to be used in the business for which the credit is claimed. The term does not include real property as defined in G.S. 105‑273 or rolling stock as defined in G.S. 105‑333.
(5) Major recycling facility. A recycling facility that qualifies under G.S. 105‑129.26(a).
(6) Owner. A person who owns or leases a recycling facility.
(7) Post‑consumer waste material. Any product that was generated by a business or consumer, has served its intended end use, and has been separated from the solid waste stream for the purpose of recycling. The term includes material acquired by a recycling facility either directly or indirectly, such as through a broker or an agent.
(8) Purchase. Defined in section 179 of the Code.
(9) Recycling facility. A manufacturing plant at least three‑fourths of whose products are made of at least fifty percent (50%) post‑consumer waste material measured by weight or volume. The term includes real and personal property located at or on land in the same county and reasonably near the plant site and used to perform business functions related to the plant or to transport materials and products to or from the plant. The term also includes utility infrastructure and transportation infrastructure to and from the plant. (1998‑55, s. 12.)
§ 105‑129.26. Qualification; forfeiture.
(a) Major Recycling Facility. A recycling facility qualifies for the tax benefits provided in this Article and in Article 5 of this Chapter for major recycling facilities if it meets all of the following conditions:
(1) The facility is located in an area that, at the time the owner began construction of the facility, was an enterprise tier one area pursuant to G.S. 105‑129.3.
(2) The Secretary of Commerce has certified that the owner will, by the end of the fourth year after the year the owner begins construction of the recycling facility, invest at least three hundred million dollars ($300,000,000) in the facility and create at least 250 new, full‑time jobs at the facility.
(3) The jobs at the recycling facility meet the wage standard in effect pursuant to G.S. 105‑129.4(b) as of the date the owner begins construction of the facility.
(b) Large Recycling Facility. A recycling facility qualifies for the tax credit provided in G.S. 105‑129.27 for large recycling facilities if it meets all of the following conditions:
(1) The facility is located in an area that, at the time the owner began construction of the facility, was an enterprise tier one area pursuant to G.S. 105‑129.3.
(2) The Secretary of Commerce has certified that the owner will, by the end of the second year after the year the owner begins construction of the recycling facility, invest at least one hundred fifty million dollars ($150,000,000) in the facility and create at least 155 new, full‑time jobs at the facility.
(3) The jobs at the recycling facility meet the wage standard in effect pursuant to G.S. 105‑129.4(b) as of the date the owner begins construction of the facility.
(c) Forfeiture. If the owner of a large or major recycling facility fails to make the required minimum investment or create the required number of new jobs within the period certified by the Secretary of Commerce under this section, the recycling facility no longer qualifies for the applicable recycling facility tax benefits provided in this Article and in Article 5 of this Chapter and forfeits all tax benefits previously received under those Articles. Forfeiture does not occur, however, if the failure was due to events beyond the owner's control. Upon forfeiture of tax benefits previously received, the owner is liable under Part 1 of Article 4 of this Chapter for a tax equal to the amount of all past taxes under Articles 3, 4, and 5 previously avoided as a result of the tax benefits received plus interest at the rate established in G.S. 105‑241.1(i), computed from the date the taxes would have been due if the tax benefits had not been received. The tax and interest are due 30 days after the date of the forfeiture. An owner that fails to pay the tax and interest is subject to the penalties provided in G.S. 105‑236.
(d) Substantiation. To claim a credit allowed by this Article, the owner must provide any information required by the Secretary of Revenue. Every owner claiming a credit under this Article shall maintain and make available for inspection by the Secretary of Revenue any records the Secretary considers necessary to determine and verify the amount of the credit to which the owner is entitled. The burden of proving eligibility for the credit and the amount of the credit shall rest upon the owner, and no credit shall be allowed to an owner that fails to maintain adequate records or to make them available for inspection.
(e) (Effective until January 1, 2007) Reports. The Department of Commerce shall report to the Fiscal Research Division of the General Assembly by May 1 of each year the following information for the 12‑month period ending the preceding April 1:
(1) The number and location of large and major recycling facilities qualified under this Article.
(2) The number of new jobs created by each recycling facility.
(3) The amount of investment in each recycling facility.
(4) The amount of reinvestment credit refunded to each major recycling facility under G.S. 105‑129.28.
(e) (Effective January 1, 2007) Reports. The Department of Commerce and the Department of Revenue shall jointly publish by May 1 of each year the following information itemized by taxpayer for the 12‑month period ending the preceding December 31:
(1) The number and location of large and major recycling facilities qualified under this Article.
(2) The number of new jobs created by each recycling facility.
(3) The amount of investment in each recycling facility.
(4) The amount of credits taken under this Article. (1998‑55, s. 12; 2005‑429, s. 2.4.)
§ 105‑129.27. Credit for investing in large or major recycling facility.
(a) Credit. An owner that purchases or leases machinery and equipment for a major recycling facility in this State during the taxable year is allowed a credit equal to fifty percent (50%) of the amount payable by the owner during the taxable year to purchase or lease the machinery and equipment. An owner that purchases or leases machinery and equipment for a large recycling facility in this State during the taxable year is allowed a credit equal to twenty percent (20%) of the amount payable by the owner during the taxable year to purchase or lease the machinery and equipment.
(b) Taxes Credited. The credit provided in this section is allowed against the franchise tax levied in Article 3 of this Chapter and the income tax levied in Part 1 of Article 4 of this Chapter. Any other nonrefundable credits allowed the owner are subtracted before the credit allowed by this section.
(c) Carryforwards. The credit provided in this section may not exceed the amount of tax against which it is claimed for the taxable year, reduced by the sum of all other credits allowed against that tax, except tax payments made by or on behalf of the owner. Any unused portion of the credit may be carried forward for the succeeding 25 years.
(d) Change in Ownership of Facility. The sale, merger, consolidation, conversion, acquisition, or bankruptcy of a recycling facility, or any transaction by which the facility is reformulated as another business, does not create new eligibility in a succeeding owner with respect to a credit for which the predecessor was not eligible under this section. A successor business may, however, take any carried‑over portion of a credit that its predecessor could have taken if it had a tax liability.
(e) Forfeiture. If any machinery or equipment for which a credit was allowed under this section is not placed in service within 30 months after the credit was allowed, the credit is forfeited. A taxpayer that forfeits a credit under this section is liable for all past taxes avoided as a result of the credit plus interest at the rate established under G.S. 105‑241.1(i), computed from the date the taxes would have been due if the credit had not been allowed. The past taxes and interest are due 30 days after the date the credit is forfeited; a taxpayer that fails to pay the past taxes and interest by the due date is subject to the penalties provided in G.S. 105‑236.
(f) No Double Credit. A recycling facility that is eligible for the credit allowed in this section is not allowed the credit for investing in machinery and equipment provided in G.S. 105‑129.9. (1998‑55, s. 12; 1999‑369, s. 5.3.)
§ 105‑129.28. (Repealed effective January 1, 2008. See note) Credit for reinvestment.
(a) Credit. A major recycling facility that is accessible by neither ocean barge nor ship and that transports materials to the facility or products away from the facility is allowed a credit against the tax imposed by Part 1 of Article 4 of this Chapter equal to its additional transportation and transloading expenses incurred with respect to the materials and products due to its inability to use ocean barges or ships. The additional expenses for which credit is allowed are expenses due to using river barges and expenses due to having to use another mode of transportation because the quantity that is transported by river barge is insufficient to meet the facility's needs. In order to claim the credit allowed by this section, the facility must provide the Secretary of Commerce audited documentation of the amount of its additional transportation and transloading expenses incurred during the taxable year.
(b) Cap. The credit allowed to a major recycling facility under this section for the taxable year may not exceed the applicable annual cap provided in the following table:
Taxable Year Cap
1998 $ 150,000
1999 $ 640,000
2000 $ 3,860,000
2001 $ 8,050,000
2002 $ 9,550,000
2003 $ 10,100,000
2004‑2007 $ 10,400,000
(c) Reduction. For the first ten taxable years after the owner begins transporting materials and products to and from the major recycling facility, the credit allowed by this section must be reduced by the amount of credit allowed in previous years that was used for a purpose other than an allowable purpose under subsection (d) of this section, as certified by the Secretary of Commerce.
(d) Use of Credited Amount. For the first ten taxable years after the owner begins construction of the major recycling facility, the owner must use the amount of credit allowed under this section to pay for (i) investment in rail or roads associated with the facility, (ii) investment in water system infrastructure designed to reduce the expense of transporting materials and products to and from the recycling facility, and (iii) investment in land and infrastructure for other industrial sites located in the same county as the recycling facility. If the owner determines that there are no reasonable economic opportunities in a given year to use the total amount of credit for the expenditures described above, the owner may use the excess for investment at or in connection with the recycling facility above the initial required investment of three hundred million dollars ($300,000,000).
Expenses incurred for the purposes allowed in this subsection during a taxable year in the ten‑year period may be counted toward a credit allowed in a later taxable year in the ten‑year period. If the owner is not able to use the full amount of the credit during a taxable year for any of the purposes allowed by this subsection, the excess may be used for these purposes in subsequent taxable years.
The owner must provide the Secretary of Commerce with annual audited documentation demonstrating that the amount of credit received under this section during the previous twelve‑month period has not been used for a purpose inconsistent with this subsection. If the Secretary of Commerce determines that the owner has used any of the credit for a purpose that is inconsistent with the requirements of this subsection, the Secretary of Commerce shall certify the amount so used to the Secretary of Revenue and the credit allowed the owner under this section for the following taxable year shall be reduced by that amount in accordance with subsection (c) of this section.
After the end of the ten‑year period, the amount of any credit allowed under this section that has not yet been used may be used for investment at or in connection with the recycling facility above the initial required investment of three hundred million dollars ($300,000,000).
(e) Credit Refundable. If the credit allowed by this section exceeds the amount of tax imposed by Part 1 of Article 4 of this Chapter for the taxable year reduced by the sum of all credits allowable, the Secretary shall refund the excess to the taxpayer. The refundable excess is governed by the provisions governing a refund of an overpayment by the taxpayer of the tax imposed in Part 1 of Article 4 of this Chapter. In computing the amount of tax against which multiple credits are allowed, nonrefundable credits are subtracted before refundable credits. (1998‑55, s. 12.)
§§ 105‑129.29 through 105‑129.34. Reserved for future codification purposes.
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