If a company’s total capital investment is $2.5 million+, a county can negotiate a FILOT agreement, resulting in substantial cost savings for a company coming to South Carolina.
Up to 30 Years
Of Lower Assessment Ratio and Stabilized Millage Rates
Under this program, companies making substantial capital investments may negotiate a lower assessment ratio and stabilize millage rates for up to 30 years. The long-term savings of the FILOT is based on the actual investment and is dependent on both the assessment and millage rates negotiated with the county.
Substantial Benefits of FILOT for a Company
| Savings | Payments to local government are significantly reduced through the negotiation of a lower assessment rate (from 10.5% to as low as 6%) |
|---|---|
| The company may negotiate a locked-in millage rate for up to 30 years or a five-year adjustable rate for the property that is subject to the FILOT | |
| With a FILOT, personal property depreciates, but real property is fixed at the original cost for the life of the fee. However, the county and the company may instead provide that any real property subject to the FILOT may be reported at its fair market value as determined by the appraisal of the South Carolina Department of Revenue and may be re-appraised every five years. | |
| Replacement Property | Property that is replacing property previously under the FILOT is allowed to go under the agreement up to the original income tax basis of the original fee property it is replacing at any time during the agreement. |
| Additional Savings for Substantial Capital Investments | If a company is investing more than $400 million, or investing more than $150 million and creating at least 125 net new jobs, a “Super Fee” is negotiable. This fee can further lower the assessment rate to as low as 4%. |
Eligibility Requirements
- If total capital investment is $2.5 million or greater, a county can negotiate with a company for a FILOT agreement
- Company has five years to meet the minimum investment threshold, and the county can offer an additional five-year extension to complete the project.
- Company may include both real and personal property under the FILOT agreement. (Property that has been on the tax rolls in the state previously, including existing buildings, is not eligible for the FILOT. This restriction is waived for companies investing an additional $45 million or more in new investment.)
Job Development Credit
The Job Development Credit effectively uses the personal withholding taxes of new employees to reimburse qualified, approved companies that add value to South Carolina and the community in which they locate. These reimbursements are for eligible capital expenditures (land, building, site development, pollution control equipment, or infrastructure) associated with projects creating new full-time jobs that also provide health care benefits for South Carolina citizens.
Eligibility Requirements
- Company is required to make its payroll books and records available for inspection by the South Carolina Coordinating Council for Economic Development and the Department of Revenue
- Company must furnish a report prepared by the company that itemizes the sources and uses of the funds, and such report must be filed by June 30 following the calendar year in which the refunds are received
- Meet the requirements of a manufacturing, agricultural packaging, processing, corporate office and processing, corporate office, warehouse and distribution, research and development, agribusiness, tourism, or qualified service related facility as required for the Jobs Tax Credit
- Create at least 10 new, full-time jobs (or meet additional requirements if qualifying as a service facility)
- Provide full-time employees with a benefits package that includes a comprehensive health plan and pay at least 50% of an eligible employee’s cost of health plan premiums
- Pay a non-refundable $4,000 application fee, receive a positive cost/benefit certification (the project is of greater benefit than cost to the state) from the Coordinating Council, and pay a $500 annual renewal fee
Reimbursements for creating new, full-time jobs with health care benefits
Funds for Retraining Available for Existing Industry
Up to
$
1000
0Refund
per full-time employee for retraining costs
Eligible businesses engaged in the manufacturing, processing or technology intensive industry may be eligible for a refund of up to $1,000 per eligible full-time employee per year for retraining costs. Refunds per eligible employee for retraining may not exceed $1,000 in a year, or $5,000 over five years.
Eligible Employee
An eligible employee is a production or technology first line employee or immediate supervisor who has been continuously employed by the company for at least two years.
- “Production employee” includes an employee who is directly engaged in the actual making of tangible personal property or who is directly involved in the manufacturing or processing.
- “Technology employee” includes an employee who is directly engaged in the design, development and introduction of new products or innovative manufacturing processes, or both, through the systematic application of scientific and technical knowledge at a technology intensive facility.
Eligibility Requirements
- The retraining must be necessary for the business to remain competitive or to introduce new technologies.
- Retraining must be approved and coordinated by the technical college(s) under the jurisdiction of the State Board for Technical and Comprehensive Education serving the designated region where the company is located. The technical college may provide the retraining program delivery directly or contract with other training entities to accomplish the required training outcomes or supervise the employer’s approved internal training program.
- Company must match $1.50 for each dollar of the employee’s withholding share used for the training. The total amount is paid to the technical college providing the training.
- To collect funds for retraining, a company must pay an annual $250 renewal fee.
Please note that companies will not be allowed to claim Job Development Credits and Retraining Credits on the same employee.
