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

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

Details

  • 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.

Exemptions

  • 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

Super FILOT

  • 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

Federal Incentives

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

Opportunity Zones

  • 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

Opportunity Zone Information

South Carolina Opportunity Zones & Mapper

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Opportunity Zone Resources & Information

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New Market Tax Credit Resources & Information

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Opportunity Zones & New Markets Tax Credits (NMTC) Interactive Map

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