South Carolina provides a myriad of credits that can completely eliminate a company’s corporate income tax liability for up to 10, or in some cases, 15 years.
20
0%Additional Credit for HQ’s Personal Property Costs
5
0%Credit of the Taxpayer’s Qualified Research Expenses
10
0%Income Tax Credit on Renewable Energy Systems
Fairfield County
Tier 3
$4,250
The Jobs Tax Credit is a valuable financial incentive that rewards new and expanding companies for creating jobs in South Carolina. In order to qualify, companies must create and maintain a certain number of net new jobs in a taxable year. The number of new jobs is calculated as the increase in the average monthly employment from one year to the next.
Types of Businesses That Qualify for the Jobs Tax Credit
| Businesses (Non-Service Related Facilities) | Jobs Requirement |
|---|---|
| Manufacturing Processing Agricultural Packaging Warehousing and Distribution Research and Development Agribusiness Operations Qualifying Technology Intensive Facilities Corporate office facilities housing a majority of the headquarters functions |
10 New Jobs Monthly Average of 10 net new jobs must be created |
| Businesses (Service-Related Facilities) | Jobs Requirement |
|---|---|
| Facility is engaged in an activity listed under the North American Industry Classification System Manual Section 62, subsectors 621, 622 and 623 or Section 4881, subsector 488190 | 10 New Jobs Monthly Average of 10 net new jobs must be created |
| In a Tier 3 County | Facility must create in a single taxable year a monthly average of:
|
Small Business Jobs Tax Credit
Qualification Requirements
- Job Creation – monthly average of 2 net new jobs, instead of 10.
- Employees – fewer than 99 employees worldwide
- Business Types – Manufacturing, processing, agricultural packaging, warehousing and distribution, research and development, agribusiness, or qualified technology intensive facility or a corporate office that has fewer than 99 employees worldwide
Hourly Wage Determines Credit Amounts
- Net New Jobs that Pay 120% of the County’s Average Hourly Wage Rate – company receives full credit amount
- New New Jobs that Pay Less than 120% of the County’s Average Hourly Wage Rate – company receives credits from $750 to $4,000 per job (or $1,750 to $5,000 in a multi-county industrial park)
Corporate Headquarters Tax Credit
To offset the costs associated with relocating or expanding a corporate headquarters facility, South Carolina provides a generous 20% tax credit based on the value of the actual portion of the facility dedicated to the headquarters operation or direct lease costs for the first five years of operation.
Features
- credit can be applied against either corporate income tax or the license fee
- credits are not limited in their ability to eliminate corporate income taxes
- can potentially eliminate corporate income taxes for as long as 10 years from the year earned
Eligibility Requirements
- Company must create a minimum of 40 new full-time jobs that are engaged in corporate headquarters or research and development. At least 20 of these jobs must be classified as staff employees.
- Facility must be the location where the majority of the company’s financial, legal, personnel, planning, and/or other staff functions are handled on a regional or national basis.
- Facility must be the sole corporate headquarters within the region or nation with other facilities that report to it.
20
0%Tax Credit for first 5 Years of Operation
Enhanced Corporate Headquarters Tax Credit
20
0% additional credit for HQ's tangible personal property costs
In addition to the standard Corporate Headquarters Tax Credit, South Carolina offers an additional credit equal to 20% of the tangible personal property costs of establishing the headquarters.
Features
- Credit may be used to eliminate both a company’s franchise tax and the corporate income tax
- Unused credits may be carried forward for 15 years
Eligibility Requirements
- Tangible personal property must be:
- purchased for the headquarters facility or research and development facility, which is a part of the same project
- used for headquarters- or research and development-related functions and services
- used to create a minimum of 75 permanent new full-time jobs performing headquarters- or research and development-related functions and services, 20 of which are staff level
- 75 new headquarters-related jobs must have an average cash compensation level of more than 2 times the state per capita income
Investment Tax Credit
South Carolina allows manufacturers locating or expanding in South Carolina a one-time credit against a company’s corporate income tax of up to 2.5% of a company’s investment in new production equipment.
Features
- Unused credits may be carried forward for up to 10 years
Credit Values
Actual value of the credit depends on the applicable recovery period for property under the Internal Revenue Code, as illustrated in the table below:
| Recovery Period | Credit Value |
|---|---|
| 3 years | 0.5% |
| 5 years | 1.0% |
| 7 years | 1.5% |
| 10 years | 2% |
| 15 years+ | 2.5% |
Up to
2.5
0%credit
One-time corporate income tax credit up to 2.5% for new production equipment
Research & Development Tax Credit
5
0% credit of the taxpayer’s qualified research expenses
To reward companies for increasing research and development activities, South Carolina offers a credit equal to 5% of the taxpayer’s qualified research expenses in the state.
Credit limits
Credit taken in any one taxable year may not exceed 50% of the company’s remaining tax liability after all other credits have been applied
Unused portion of the credit
Can be carried forward for 10 years from the date of the qualified expenditure
Port Volume Increase Tax Credit
South Carolina provides a credit against income taxes or withholding taxes to entities that use state port facilities and increase base port cargo volume by 5% over base-year totals.
Tax Credits
Total amount of tax credits allowed to all qualifying companies is limited to $8 million annually
Eligibility Requirements
Company must have 75 net tons of non-containerized cargo or 10 loaded TEUs transported through a South Carolina port for their base year
$
8
0million
tax credits allowed annually
Recycling Facility Tax Credit
No Limit To the amount of tax
To reward qualified recycling facilities, South Carolina offers a credit equal to 30% of the cost of recycling property placed into service each year.
Benefits
- there is no limit to the amount of tax that can be offset with the credit
- the credit can be carried forward indefinitely
Qualification Requirements
- recycling facility that has a $300 million investment within five years
- manufactures products for sale composed of 50% or more postconsumer waste material by weight or volume
Solar Energy Tax Credit
South Carolina allows a company a credit against income taxes equal to 25% of the costs incurred by the company in the purchase and installation of the following:
- solar energy system
- small hydropower system
- geothermal machinery and equipment for heating water, space heating for heating water, space heating, air cooling, energy-efficient daylighting, heat reclamation, energy-efficient demand response or the generation of electricity in or on a facility in South Carolina owned by the company
Benefits
- amount of the credit in any year may not exceed $3,500 for each facility or 50% of the income tax liability for the taxable year, whichever is less
- unused credit can be carried forward for 10 years
Up to
$
3500
0credit
for each facility
Biomass Resources Tax Credit
Up to
$
650000
0of credit in a year
South Carolina allows a company a credit against income taxes or corporate license fees, or both, for 25% of the costs incurred for the purchase and installation of equipment used to create power, heat, steam, electricity, or another form of energy for commercial use from a fuel consisting of 90% or more biomass resource.
Benefits
- taxpayer may use up to $650,000 of credit in a tax year
- unused credit may be carried forward 15 years
Renewable Fuels Tax Credit
Credits may be available to a company constructing a facility in South Carolina that produces and/or distributes renewable fuels.
Benefits
- credits for the construction of biodiesel production or distribution facilities can completely eliminate state income tax
- unused credits may be carried forward for up to 10 years
Credit Amounts
- Production facility = 25% of the cost of constructing or renovating a building and equipping the facility for the purpose of producing renewable fuel.
- Distribution facility = 25% of the cost of purchasing, constructing, and installing the property. Eligible property includes pumps, storage tanks, and related equipment that are directly and exclusively used for distribution, dispensing, or storing renewable fuel.
Can completely eliminate state income tax
Renewable Energy Systems and Components Tax Credit
10
0%income tax credit
South Carolina provides a nonrefundable income tax credit equal to 10% of qualifying expenditures to qualifying companies in the renewable energy field that are expanding or locating in South Carolina.
Benefits
- 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
Company Qualification Requirements
- Manufacture renewable energy systems and components in this state for solar, wind, geothermal, or other renewable energy uses
- Invest at least $500 million in new qualifying plant and equipment in the year the tax credit is claimed
- Meet certain job and wage requirements of the State Energy Office.
NOTE: This income tax program is available until December 31, 2019.
Energy Conservation and Renewable Energy Tax Credit
South Carolina allows a taxpayer a credit equal to 25% of all expenditures incurred during the taxable year for the purchase and installation of the following energy conservation and renewable energy production measures:
- Conservation tillage equipment
- Drip/trickle irrigation systems including all necessary measures and equipment
- Dual purpose combination truck and crane equipment
Credit Claims
- company may claim the credit only one time for each of the three measures in a lifetime
- maximum credit that may be claimed for each measure is $2,500
- pass through entities, the credit is determined at the entity level and is limited to $2,500
- unused credit can be carried forward for 5 years
Up to
$
2500
0Claimed for each production measure
