North Carolina is offering $12 million in tax incentives tech giant Microsoft Corp. for setting up an additional facility in the state.
Gov. Roy Cooper said Microsoft will invest $47.5 million to expand its operations in Morrisville, North Carolina, opening up 500 jobs. It is the second expansion announced by the Fortune 500 company in the state in three months. Both facilities were acquired through multi-million development grants from the state.
“Companies like Microsoft continue to expand in North Carolina because they see us as the right fit for technology success,” Cooper said. “Skilled, diverse workers and strong infrastructure mean businesses are confident that expanding in our state is a good business decision.”
Microsoft announced in October its $23 million investment into a facility in Charlotte that is slated to create 430 jobs. The cost to the state, in that case, is $7.9 million in tax incentives from development grants.
Development grants are tax incentives that critics argue is a way for the government to pick winners and losers in the private sector. Critics also contend that such incentives are a waste of taxpayer money because companies generally will expand without them. Improving the state's overall tax and business climate is a fairer way to grow jobs, critics say.
If Microsoft meets its job creation and economic returns, the grants will be issued over 12 years. Cooper said he expects the Morrisville facility to generate $1.2 billion for the state’s economy.
“We look forward to growing our workforce in Wake County, and expanding our ability to both drive innovation and serve employees, customers and partners in the community,” said Reggie Isaac, U.S. Citizenship Lead for Economic Development for Microsoft.
In addition to the jobs and the projected economic stimulus, Microsoft will bring high-paying positions to Wake County.
The average for all new positions could reach up to $125,354, according to the North Carolina Department of Commerce. The current average annual wage in Wake County is $58,138.
Wake County is one of North Carolina’s least distressed economic areas ranked by the Department of Commerce.
The counties are ranked based on average unemployment rate; median household income; percentage growth in population; and adjusted property tax base per capita.
Wake County’s unemployment rate is 3.1 percent, according to October numbers. The median household income is about $77,000. Its percentage growth in population over seven years has been about 18 percent, according to the U.S. Census Bureau of Statistics.
Microsoft’s move will also benefit more distressed parts of the state, officials said.
The company’s development agreement secures about $4 million to some rural areas to the state’s Industrial Development Fund.
The money is set aside to help the communities finance infrastructure projects that will create more economic opportunities.
“This additional investment by Microsoft further cements North Carolina as a booming ecosystem for startups and large information technology companies,” Sen. Wiley Nickel, D-Wake.