Positioning Business for Success
TAXES & INCENTIVES
In South Carolina and the Central SC region, we’ve designed and formalized a tax and incentive environment that positions business and people for success. From customized incentive packages and a host of credits and exemptions, Central SC makes business welcome.
5% Corporate Income Tax. One of the lowest in the nation.
#1 Top-Ranked Business Incentive Programs
Corporate Income Tax & Incentives
Corporate Income Tax
- 5% Corporate Income Tax
- Single Factor Apportionment
- Only taxed on portion of income derived from in-state operations
Job Tax Credit
- Credit of $750 to $25,000 per job to offset up to 50% of annual corporate income tax or premium tax liability
- 15 year carry-forward
- Credits available for 5 years, beginning with year 2
- Value of credit dependent on county’s development tier
Research & Development Tax Credit
- Credit equal to 5% of taxpayer’s qualified research expenses to offset up to 50% of remaining corporate income tax liability
- Carry forward of up to 10 years
Corporate HQ Tax Credit
- 20% credit based on cost of facility or direct lease costs offset annual corporate income tax or license fee
- Carry forward of up to 10 years
- Available for 5 years
- Not limited in ability to eliminate corporate income taxes
Other Corporate Income Tax Credits
- Enhanced Corporate HQ Tax Credit
- Investment Tax Credit
- Recycling Facility Tax Credit
- Solar Energy Tax Credit
- Biomass Resources Tax Credit
- Renewable Fuels Tax Credit
- Renewable Energy Systems & components tax credit
Sales & Use Tax Exemptions
- Manufacturing machinery & equipment and repair parts
- Materials that will become an integral part of the finished product
- Coal, coke, or other fuel for manufacturers, transportation companies, electric power companies, and processors
- Industrial electricity and other fuels used in manufacturing tangible personal property
- Research and development machinery and equipment
- Air, water, and noise pollution control equipment
- Packaging materials
- Long distance telephone calls and access charges, including 800 services
- Material-handling equipment for manufacturing or distribution projects investing $35 million or more.
- Construction materials used in the construction of a single manufacturing or distribution facility with a capital investment of at least $100 million in an 18 month period Job Tax Credit
- Other exemptions include specific technology intensive and datacenter materials
Local Property Taxes & Incentives
- Only local governments levy property taxes.
- No state tax on real or personal property.
- No tax, state or local, on inventories or intangibles.
- Local Property Tax Liability: Property Value (less depreciation) x Assessment Ratio x Millage.
- All inventories (raw materials, work-in-progress, and finished goods)
- All Intangible property
- All pollution control equipment
5-Year Property Tax Abatement
- Represents a reduction of 20 to 50 percent of the total millage, depending on the county.
- By law, manufacturers and research and development facilities (investing $50,000 or more) and distribution or headquarters’ facilities (investing $50,000 or more and creating 75 new full-time jobs) are entitled to a five-year property tax abatement from county ordinary operating taxes.
Fee-in-Lieu of Property Taxes (FILOT)
- Assessment ratio can be lowered from 10.5% to as low as 6%
- Companies investing more than $2.5 million are eligible to negotiate a lower assessment ratio, and stabilize millage rates for the period the Fee is in effect.
- Existing buildings already on the tax rolls may not be included in the FILOT unless new equipment investment is over $45 million
- Assessment ratio can be lowered to 10.5% to 4%
- Real and personal property may be included under the FILOT agreement
- Single investment of at least $400 million or invest more than $150 million and create at least 125 net new jobs.
Special Source Revenue Credit (SSRC)
- County’s discretion to offset project’s infrastructure and/or machinery and equipment costs with a credit reduction on property tax
- Done in the form of a credit off the tax payment due to the county in designated years
Other Property Tax Incentives
- Textile Revitalization Credit
- Retail Facilities Revitalization Act
- Revitalization of Abandoned Building Credits
State Discretionary Incentives
Job Development Credit (JDC)
- Rebates a portion of new employees’ withholding taxes that can be used to address the specific needs of individual companies.
- Credit per employee per year cannot exceed $3,250.
- Available for up to 10 years
- Reimbursements can only be used for eligible capital expenditures.
Job Retraining Credit
- Refund of up to $1,000 per full-time production or technology employee per year.
- Cannot exceed $2,000 per employee over 5 years
- Cannot be claimed on the same employee
Other Discretionary Incentives
- Port Volume Increase Tax Credit
- SC Agricultural Products Purchases Credit
New Market Tax Credit (NMTC)
- Competitive program by the U.S. Department of the Treasury’s Community Development Financial Institutions Fund administered locally
- Lower interest rates (sometimes below market) on loans
- Non-traditional financing not available in the marketplace
- Access to a reduced cost of capital
- CDFI Fund New Market Tax Credit Program
- Tax Cuts and Jobs Act federal incentive to spur investment in undercapitalized communities
- Temporary deferral of taxes on previously earned capital gains not taxed until the end of 2026 or when the asset is disposed of
- Basis step-up of previously earned capital gains invested in Opportunity Funds for at least 5 years, investors’ basis on the original investment increases by 10 percent. If invested for at least 7 years, investors’ basis on the original investment increases by 15 percent.
- Permanent exclusion of taxable income on new gains for investments held for at least 10 years