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South Carolina Basic Business Taxes 2012

South Carolina's economic development, finance, and tax organizations provide a range of incentive programs to initiate new business and commercial investment. Specific programs include corporate income taxes, property tax abatements, and worker training incentives.

Area Development Online Research Desk (2012)
(page 3 of 3)
Credit for Manufacturers of Renewable Energy Systems and Components:
South Carolina offers a nonrefundable income tax credit equal to 10 percent of qualifying expenditures to qualifying companies in the renewable energy field who are expanding or locating in South Carolina. To qualify, the company must: 1) manufacture renewable energy systems and components in this state for solar, wind, geothermal, or other renewable energy uses; 2) invest $500 million in new qualifying plant and equipment in the year the tax credit is claimed; and 3) meet certain job and wage requirements. Expenditures qualifying for the credit must be certified by the State Energy Office. A qualifying taxpayer must submit a request for the credit to the State Energy Office by January 31st for expenditures incurred in the previous calendar year. By March 1st, the taxpayer will be notified of qualifying expenditures and the allocated credit amount. A taxpayer's total credit for all expenditures cannot exceed $500,000 for any taxable year and $5 million total for all taxable years. Unused credits can be carried forward for 15 years. The credit is in lieu of all other credits or abatements allowed by state law, but the taxpayer may select the credit or abatement desired in the manner prescribed by the Department.

Textile Communities Revitalization Credit:
South Carolina offers credits for rehabilitating abandoned textile mill sites that encourage businesses to renovate, improve, and redevelop abandoned textile mill sites. Sites that are eligible are abandoned sites initially used for, or designed for use by, textile manufacturing. "Abandoned" means that at least 80 percent of the site has been closed for a period of at least one year.
A taxpayer who improves, renovates, or redevelops an eligible site may be eligible for one of two tax credits:
•A credit against income taxes or license tax may apply equal to 25 percent of the rehabilitation expenses. This credit is to be taken in equal installments over five years beginning with the tax year in which the site is placed in service. The credit is limited to 50 percent of income or license tax liability. Unused credits can be carried forward up to five years.

•A credit against real property taxes equal to 25 percent of the rehabilitation expenses of an eligible site multiplied by the local taxing ratio of each local taxing entity that has consented to the tax credit. This credit can offset up to 75 percent of property taxes for a period of up to 8 years. To receive this credit, the county or municipality in which the site is located must determine the eligibility of the site and the proposed project. A majority vote of the local governing body must approve the project, and the determinations and approval must be made by public hearing and ordinance.

Please note: Companies must provide written notification to the Department of Commerce stating which mode of credit they elect to receive before the eligible site is placed in service. Without written notification and/or obtaining necessary approvals before site is placed in service, the taxpayer will be considered to have elected to receive the income tax or license tax credit.

Retail Facilities Revitalization Credit:
There are credits for rehabilitating abandoned retail facility sites that encourage businesses to renovate, improve, and redevelop abandoned retail facility sites. Sites that are eligible are abandoned sites formerly used for, or designed for use by, a retail sales facility. "Abandoned" means that at least 80 percent of the site has been closed for a period of at least one year. A taxpayer who improves, renovates, or redevelops an eligible site may be eligible for one of two tax credits:

•A credit against income taxes or license tax may apply equal to 10 percent of the rehabilitation expenses. This credit is to be taken in equal installments over eight years beginning with the tax year in which the site is placed in service. The credit is limited to 50 percent of income or license tax liability. Unused credits can be carried forward up to five years.

•A credit against real property taxes equal to 25 percent of the rehabilitation expenses of an eligible site multiplied by the local taxing ratio of each local taxing entity that has consented to the tax credit. This credit can offset up to 75 percent of property taxes for a period of up to eight years. To receive this credit, the county or municipality in which the site is located must determine the eligibility of the site and the proposed project. A majority vote of the local governing body must approve the project, and the determinations and approval must be made by public hearing and ordinance.

Discretionary Income, License, or Withholding Tax Incentives
Job Development Credit:
Job Development Credits (JDCs) are discretionary incentives that can address the specific needs of individual companies. JDCs are approved on a case-by-case basis by the South Carolina Coordinating Council for Economic Development (Coordinating Council).

To qualify, a company must:
•Be a qualifying type of business;
•Provide competitive health care benefits to employees;
•Pass a cost/benefit analysis;
•Meet certain job and capital investment requirements;
•Be competitive with other states; and
•Enter into a revitalization agreement with the Coordinating Council.

The credit provides a rebate from personal income withholdings tax of eligible new employees and can be used to offset certain approved expenses such as real property costs, training, or infrastructure. The value of the credit is based on the county designation of the county in which the project locates and actual wages of each individual new job created. Generally, companies can expect to collect credits for 10 years, but only on new full-time jobs with wages at or above the current county average wage for the county in which the project is located.

Port Volume Increase Credit:
South Carolina provides a possible income tax credit or withholding tax credit to manufacturers, warehousers, and distributors that use South Carolina port facilities and increase base port cargo volume by 5 percent over base-year totals. To qualify, a company must have 75 net tons of noncontainerized cargo or 10 loaded TEUs transported through a South Carolina port for their base year. The base year is re-calculated every year.

The Coordinating Council has the sole discretion in determining eligibility for the credit and the amount of credit that a company may receive. The total amount of tax credits allowed to all qualifying companies is limited to $8 million per calendar year. Total credits against withholding taxes may not exceed $4 million of the $8 million.

In addition, the Coordinating Council may annually award up to $1 million of the $8 million to a new warehouse or distribution facility which commits to expending at least $40 million at a single site and creating 100 new full-time jobs, without regard to the base year cargo provisions.

A company must submit an application to the Coordinating Council to determine its qualification for, and the amount of, any tax credit it will receive.

Corporate Income Tax Moratorium:
Companies creating net new jobs in certain of South Carolina's economically distressed counties will benefit from a corporate income tax moratorium. Companies that qualify for the moratorium will be able to entirely eliminate their state corporate income tax liability for a period of either 10 or 15 years. In order to qualify, at least 90 percent of the company's total investment in South Carolina must be in a county where the unemployment rate is twice the state average. The length of the moratorium depends on the number of net new full-time jobs created. Companies creating at least 100 net new full-time jobs in a five-year period qualify for a 10-year moratorium, and companies creating at least 200 net new full-time jobs in a five-year period qualify for a 15-year moratorium. The moratorium period begins once a company meets the required job target.

In order to qualify for the moratorium, a company must also obtain certification through an application process from the Coordinating Council that the project will have a significant beneficial effect on the region for which it is planned, and that the benefits of the project to the public exceed its costs. If a company is approved for the moratorium, it must enter into a contract with the South Carolina Department of Revenue.

South Carolina Contact:
South Carolina Department of Commerce
1201 Main Street, Suite 1600
Columbia, SC 29201
Phone: (803) 737-0400
Fax: (803) 737-0818
Email: info@sccommerce.com
SCcommerce.com


Incentive and tax information is provided to Area Development by each state's economic development or commerce agency for information purposes only and is subject to revision at any time by the state government. Please contact the state agency directly for full requirements and offerings.
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