Below is a brief overview of incentive programs that may apply to your business. It is our goal to work closely with companies looking to come to the Bottineau area. As part of competitive process of attracting large scale projects, we utilize variety of other incentives such as land use approvals, expedited permits, low interest financing, R&D credits and other tax regulatory considerations. For more state business incentive programs, visit www.business.nd.gov/finance.
2017/2018 Tax Incentives – ND Tax
Revolving loan fund programs: The Bottineau Economic Development Corporation provides low-interest loan funds to businesses as a gap financing tool. These loans have ranged in size from $3,000 to $250,000 and are flexible enough to respond to the needs of individual projects.
The primary purpose of the funds are to expand the financial base of the community by: creating new jobs; expanding the local tax base; increasing capital investment; improving the entrepreneurial climate and attracting people to the Bottineau area for recreational activities. Generally funds will be used to develop private enterprise. Non-profit organizations will be considered for these funds when it can be determined that the non-profit venture meets the general purpose for which the fund was established.
Funds available through the Bottineau County Economic Development Corporation may be used to provide temporary or permanent financing of any business cost related to the relocation and /or establishment of a new business or the expansion of an existing business. Other uses shall include recreational activities and area improvement projects. These funds will not be used for restructuring existing debt.
Funds will be available for leveraging related financing through venture capital funds or through financial institutions, or other sources of financing.
APUC: The Agricultural Products Utilization Commission (APUC) grant program encourages development of new and expanded uses of North Dakota agricultural products. Grant categories include:
- Basic and applied grants
- Marketing and utilization grants
- Farm diversification grants
- Nature based agri-tourism grants
- Prototype grants
- Technology grants
- Technical assistance grants
For more information on APUC grants, including the application and deadlines, visit www.business.nd.gov/apuc.
Property Tax Exemption: A new or expanding business project that is certified as a primary sector business by the ND Department of Commerce may be granted a property tax exemption for up to five years. Two extensions are available:
- Agricultural processors may be granted a partial or full exemption for up to five additional years.
- A project located on property leased from a government entity qualifies for an exemption for up to five additional years upon annual application by the project operator. In addition to, or instead of, an exemption, local governments and any project operator may negotiate payments in lieu of property tax for a period of up to 20 years from the date project operations begin.
Sales Tax Exemptions:
- Agricultural Commodity Processing Plant Construction Materials: Construction materials used to construct an agricultural processing facility are exempt from sales and use taxes.
- Agricultural Equipment: A new or expanding plant may exempt machinery or equipment from sales and use tax if it is used primarily for manufacturing or agricultural processing.
Income Tax Exemptions: A primary sector or tourism business may qualify for an income tax exemption for up to five years.
Biodiesel and Soybean/Canola Processing Tax Credits: A corporation is allowed an income tax credit for adapting or adding equipment to retrofit a facility or to construct a new facility in North Dakota that either (1) produces or blends biodiesel fuel or green diesel fuel or (2) crushes soybeans or canola. The credit is equal to 10% of the direct costs incurred, and is allowed in each of five tax years, starting with the tax year in which the production, blending, or crushing begins. An unused credit may be carried forward up to five tax years. A corporation is allowed no more than $250,000 of credits for all tax years.
A licensed fuel supplier of biodiesel fuel or green diesel fuel having at least a 5% blend is allowed an income tax credit for blending the fuel in North Dakota. The credit is equal to five cents for each gallon blended. An unused credit may be carried forward up to five tax years. A licensed seller of biodiesel fuel or green diesel fuel having at least a 2% blend is allowed an income tax credit for adapting or adding equipment to the seller’s facility in North Dakota to enable it to sell the biodiesel or green diesel blend. The credit is equal to 10% of the direct costs incurred, and is allowed in each of five tax years, starting with the tax year in which the facility begins selling the biodiesel fuel or green diesel fuel. An unused credit may be carried forward up to five tax years. A seller is allowed no more than $50,000 of credits for all years.
Microbusiness Investment and Employment Credit: An income tax credit is allowed to an individual, estate, trust, partnership, corporation, or limited liability company certified as a microbusiness by the Department of Commerce Division of Economic Development and Finance. A microbusiness is a business with up to five employees located in a community with a population under 2,000 that is actively involved in economic development. The credit is equal to 20% of the amount of new investment and new employment during the tax year.
Workforce Recruitment Credit: An individual, estate, trust, partnership, corporation, or limited liability company is allowed an income tax credit for employing extraordinary recruitment methods to recruit and hire employees for hard-to-fill positions in North Dakota. The credit is equal to 5% of the compensation paid during the first 12 consecutive months to an employee hired to fill a hard-to-fill employment position, and is allowed in the first tax year following the tax year in which the employee completes the 12 consecutive month employment period. To qualify, an employer must pay an annual salary that is at least 125% of North Dakota’s average wage and must have employed all of the following recruitment methods for at least six months to fill a position for which the credit is claimed:
- Contracted with a professional recruiter for a fee
- Advertised in a professional trade journal, magazine, or other publication directed at a particular trade or profession;
- Provided employment information on a website for a fee
- Paid a signing bonus, moving expenses, or atypical fringe benefits.
In addition, if an employer claims the credit, the employee hired in the hard-to-fill position is allowed a deduction for the signing bonus, moving expenses, or atypical fringe benefits paid by the employer that are included in the employee’s federal taxable income.
Partnership in Assisting Community Expansion (PACE): The PACE family of programs at the Bank of North Dakota (BND) is designed to encourage specific types of economic activity within the State of North Dakota. In general terms, PACE provides an interest buy down that can reduce the borrower’s rate of interest by as much as 5%.