Last week, we told you about a pair of important companion bills (HB 1090/SB 826: Prosperity & Economic Opportunity for All NC Act) introduced recently in the state House and Senate. The Prosperity & Economic Opportunity for All NC Act contains a number of strong measures that would create greater economic growth opportunities throughout North Carolina’s rural communities, as well as in its urban centers. Many of these measures align closely with key recommendations outlined in a recent report conducted by the North Carolina Chamber Foundation (Spreading Economic Opportunity Across North Carolina). For this reason, the North Carolina Chamber is strongly encouraging both House and Senate members to act quickly to secure these priorities for North Carolina.
We are also actively seeking out forward-thinking leaders in the business community to add your voices to the chorus of support that has been building behind this legislation. To lend your support to our growing coalition, contact Jake Cashion at email@example.com or 919-836-1411. The Prosperity & Economic Opportunity for All NC Act is a significant piece of legislation for job creators for a number of reasons, so this week I wanted to take the time to delve into a bit more detail on a few of the key components of the bill.
Much like the budget passed by the House last week, the bill would repeal North Carolina’s Mill Machinery Tax, an onerous tax on production for North Carolina manufacturers and other companies that purchase mill machinery, parts and accessories. The Mill Machinery Tax is currently levied at a rate of 1 percent, or $80, per taxed article (whichever is higher). And since it hits manufacturers and cutting-edge research and development firms especially hard, it deals a direct blow to our state’s ability to foster the growth of innovation in our economy. Even worse, none of our immediate neighbors levy a similar tax on production, and other states in the Southeast, like Florida, have recently acted to repeal analogous measures. With that in mind, it is clear to see why in order to continue matching the competition the repeal of the Mill Machinery Tax is a must-do for North Carolina.
But repealing a burdensome tax is not the only way the bill would help stimulate competitive innovation. The act also includes measures to create a robust research and development grant program for North Carolina employers. Intellectual property supports more than half of all private-sector jobs in North Carolina (1.77 million workers), and IP-intensive companies produce more than 100 percent greater economic output per employee than other sectors according to the U.S. Chamber’s Global Intellectual Property Center. A strong R&D grant program would award employers in key industries for investing in technological innovation and supporting the growth of exactly the types of jobs North Carolina needs in our fast-changing global economy. Adding this component to our state’s economic development toolbox would send a strong message that North Carolina is fully invested in continuing to support an economy that remains competitive in the 21st century and beyond.
The repeal of the Mill Machinery Tax and the creation of the R&D grant program are just a couple of the important measures contained in the Prosperity & Economic Opportunity for All NC Act which would significantly impact job creators and boost North Carolina’s overall ability to grow the best jobs in our modern economy. As the current legislative session advances, we will continue to update you on additional priorities contained in the bill and encourage legislative leaders to act quickly to secure their passage.
Gary J. Salamido
Vice President, Government Affairs
North Carolina Chamber