The Job Development Investment Grant (JDIG) is a performance-based, discretionary incentive program that provides cash grants directly to new and expanding companies to help offset the cost of locating or expanding a facility in the state. The amount of the grant is based on a percentage of the personal income tax withholdings associated with the new jobs.
The amount of a JDIG award is calculated by weighing a number of factors to determine its potential value, including the location of the project, the county tier designation, the number of net new jobs, the wages of the jobs compared to the county average wage, the level of investment and whether the industry is one of the state’s targeted industry sectors. JDIG has a Transformative Project provision for any company that creates 3,000 jobs and invests $1 billion, which can provide a grant worth up to 90% if personal income withholdings for up to 30 years.
To qualify as a transformative project, the grantee (company) must create at least 3,000 jobs and invest at least $1 billion within the base period, which can now be up to ten years. Once the minimum transformative project requirements are met and maintained, the company can receive annual grant payments of up to 90% of personal income tax withholdings of eligible employees for up to 30 years. In addition, as long as the company maintains the minimum requirements, all jobs created over the term of the grant – again, up to 30 years, can be included in the annual grant payment calculations. Workers employed in North Carolina who fill expansion positions with the company as a result of a merger or acquisition occurring during the term of the agreement are not eligible employees for the grant. Unlike a normal JDIG grant, the maximum amount of any annual grant payment associated with any specific eligible position is not limited to $16,000.
Sales Tax Exemption for Building Material and Supplies
In addition to an enhanced JDIG, transformative projects that receive a JDIG grant on or before June 30, 2019, are also allowed a refund of the sales and use tax paid on building materials, building supplies, fixtures, and equipment that become a part of the real property of the facility.
There are no restrictions on the use of JDIG funds. The company can use JDIG funds for any purpose.
Basic Requirements for Eligibility
In order for a project to be considered for JDIG, the following criteria must be met:
- The project must be competitive with locations outside North Carolina and remain competitive until the grant is formally awarded.
- The project results in a net increase in the company’s employment in North Carolina. JDIG cannot be used to incent job retention.
- The project increases opportunities for employment and strengthens the state’s economy.
- The project is consistent with the economic development goals of the state and of the area in which it is located.
- The project must meet the county average wage requirement.
- The grant must be necessary for the completion of the project in North Carolina.
- The benefits to the state outweigh the costs, rendering the grant appropriate for the project.
- The company must provide health insurance and pay at least 50% of the premiums for participating employees.
- The company must meet statutory occupational safety and environmental compliance requirements.
- For a project in a Tier 3 county, the local government(s) must provide incentives.
A five-member Economic Investment Committee (EIC) evaluates projects and makes decisions regarding JDIG awards. The North Carolina Department of Commerce administers the program on behalf of the EIC. Grant applicants are required to pay a $10,000 nonrefundable fee with the submission of a completed application for a transformative project. Grant recipients are also required to pay an annual fee with the submission of each annual report, when filed with the Department of Commerce. The annual fee amount is the greater of $2,500 or .03% of the grant amount awarded to the company. North Carolina statute requires that the company maintain operations at the project location, or at another approved site in North Carolina, for at least 150% of the term of the grant.
For more information about the Job Development Investment Grant or information regarding a new company relocation or expansion project, contact the Economic Development Partnership of North Carolina at (919) 447-7744 or firstname.lastname@example.org.
The Economic Development Partnership of North Carolina does not award or administer this incentive. All economic development incentives are awarded and administered by the North Carolina Department of Commerce.