Apple Computer Inc. would have one more reason to set up shop in North Carolina under a bill approved by the Senate Monday night.
Senators voted 37 to 9 to change the way corporate taxes are calculated for companies that make enormous capital investments. The bill would affect only a handful of companies now in the state, but it was designed to lure Apple to locate an operation in North Carolina, spending more than $1 billion.
Under the bill, only a company's North Carolina sales would be used to calculate its corporate income tax. North Carolina now includes a company's property and payroll when calculating the tax.
Comments
Re: Senate: thumbs up on incentives
May 12, 2009 - 8:56am — jonoflockeIt is flat-out immoral for politicians to play favorites with the tax code. If they truly care about economic development, then they would work to foster a climate favorable to job creation, period. That would include, of course, creation of jobs that don't allow them to be photographed in ribbon-cutting ceremonies.
Re: Senate: thumbs up on incentives
May 12, 2009 - 8:22am — domewatcherWe know something about incentives down here in GTP country. (GTP = God’s Troubled Paradise.) Some think the incentives to lure Spirit Aero down to the Transpark will top $240,000,000. Incentives have been likened to the “forbidden fruit.” If that is so then we are like Adam because we are enjoying eating this free fruit.
http://triangle.bizjournals.com/triangle/stories/2008/06/30/story1.html
That figure of $240,000,000 may or may not be correct because no one has ever found anyone who can say for sure what the incentives are worth. We sure don’t know what the answer is because we can’t even figure out how to get people to stop here in Kinston while they are on the way down to the beach.
The Gov announced a type of “mission accomplished” when he landed Spirit Aero. I hope he is right and the incentives, whatever they truly are, bring “hope, growth and opportunity.” The stimulus package has given us some $65,000,000 for an extension of the GTP Parkway. The extension will mean the road to nowhere will be somewhat longer and it will just take a few more minutes to get nowhere. And I think we’re getting a rail spur for something like $35,000,000 which will connect the airport to the railroad track to the port at Morehead so the fuselages can be floated over to France. (At one time we were going to ship strawberries to France until we figured out you could carry our whole season’s crop on two planes. And to think that some smart mathematician ruined that deal for us!)
Incentives remind me of high school dating days. The guys all wanted to date the “loose” girls. The “loose” girls got plenty of dates but nobody wanted to marry them. So incentives worked well in the short term but I don’t know about the long term. So the question is should you marry a “loose” girl or a “good” girl? I think if we find the answer to that then business incentives will be fairly easy.
Re: Senate: thumbs up on incentives
May 12, 2009 - 7:43am — bytheseaThis is a good change. The effect of single factor apportionment is to shift the tax burden from companies that invest and employ in North Carolina to those that are essentially just selling here. Apportionment formulas which determine the portion of a multi-state companies that is taxed in a particular state are about who ends up paying.
Maybe you should spend some time
May 12, 2009 - 7:14am — James_Protzmanin economic development before assuming you know how the game works. The truth is, there are plenty of other states with lower tax rates than North Carolina. If that was all that mattered, no states would be in the business of creating incentives in the first place. Tax rate is only one of many factors companies take into consideration. For example, quality of schools, overall workforce, technology infrastructure, energy costs ... all come into play.
That said, this particular incentive is badly misguided, as you can read here. It appears the North Carolina Senator, Inc., can see no farther ahead than the next election cycle.
Re: Senate: thumbs up on incentives
May 11, 2009 - 9:14pm — JRS1988If North Carolina simply lowered corporate tax rates, as well as personal income tax rates, the state would not have to resort to special favors like this to attract business and jobs to the state. Why our legislators cannot understand that lower tax rates would attract business without special favors is difficult to understand.