Article 3J Tax Credits
The North Carolina Department of Revenue maintains authority to determine eligibility for this and other tax programs. For detailed information please contact the Corporate Tax Division at 919-733-8510.
Information published by the Department of Revenue concerning the
Article 3J Tax Credits can be reviewed by following this link.
North Carolina offers several types of tax credits to eligible taxpayers that undertake qualifying initiatives. One class of these credits, the Article 3J Tax Credits, may be used to offset up to 50% of the taxpayer's state income and/or franchise tax liability, and unused credits may be carried forward for up to five years.
Article 3J offers credits for:
- Creating jobs – Companies who meet a minimum threshold of new fulltime jobs created during the taxable year may claim a credit.
- Investing in business property – Companies can claim a credit based on a percentage of the cost of capitalized tangible personal property that is placed in service during the taxable year.
- Investment in real property – Companies located in a Tier 1 County (see below) that invest at least $10 million in real property within a three-year period and create at least 200 new jobs within two years are allowed a credit equal to 30% of the eligible investment.
North Carolina contains 100 counties. Every year the Department of Commerce ranks each county based on economic well-being and assigns it to one of three tiers. The 40 most distressed counties are designated as Tier 1, the next 40 are Tier 2 and the 20 least distressed are Tier 3. This tier system is incorporated into various state programs, including Article 3J Credits.
To determine if your business is eligible for Article 3J Tax Credits, review the legal statutes in the documents below and then visit the 2013 County Tier Designations area of our site to find the correct Tier designation.
No application is required to claim Article 3J Credits.
- Summary of Article 3J Tax Credits
- Enabling Legislation- House Bill 2170
- 2013 Article 3J Wage Standards
- 2012 Article 3J Wage Standards
- 2011 Article 3J Wage Standards
- 2010 Article 3J Wage Standards
- 2009 Article 3J Wage Standards (Please discard wage standards for 2009 that were published previous to January 26th.)
- 2008 Article 3J Wage Standards
- 2007 Article 3J Wage Standards
Projects located within certain areas of the state qualify to receive enhanced Article 3J Credits.
Municipalities with a population of at least 10,000 have the ability to define qualifying areas of poverty as Urban Progress Zones. Counties that do not have a municipality with a population of at least 10,000 have the ability to define qualifying areas of poverty as Agrarian Growth Zones.
For more information please download the PDFs below:
- Guidelines to the Urban Progress Zones (UPZ)
- Urban Progress Zone (UPZ) Application
- Guidelines to the Agrarian Growth Zones (AGZ)
- Agrarian Growth Zone (AGZ) Application
- Article 3J Contact Information
- Article 3J Zone Locations
- 2012-2013 3J Zone Applications
Note: Article 3J Tax Credits should not be confused with William S. Lee Tax Credits, an earlier tax credit program. Article 3J is not a revision of the Lee Act; it replaces it. In general, William S. Lee Credits are repealed for business activities that occur on or after January 1, 2007 and Article 3J Credits take effect for taxable years beginning on or after January 1, 2007.