Biggins Lacy Shapiro & Company, LLC

South Carolina Economic Development Incentives Programs

TAX CREDITs

Jobs Tax Credit: A business that creates a monthly average of at least 10 net new jobs at a corporate headquarters, manufacturing, distribution, processing, warehousing, agribusiness or R&D facility is eligible to receive an annual credit of $1,500 to $8,000 per job.  Qualified service-related facilities that meet certain job number and wage thresholds may also qualify for this credit.  This non-refundable, as-of-right credit may be claimed for 5 years. An additional $1,000 per job bonus is available to companies that locate in a multi-county industrial park.  The actual amount of the tax credit will depend on the development tier of the county where the project is located.  The credits cannot be used to offset more than 50% of income tax liability in a given year. Unused credits may be carried forward for up to 15 years.

Corporate Headquarters Tax Credit: Companies that establish or expand a corporate headquarters facility in South Carolina may receive a tax credit equal to 20% of the value of the portion of the facility dedicated to the headquarters operation or 20% of the first 5 years of direct lease costs.  To qualify, a business must create at least 40 full-time jobs that are engaged in corporate headquarters or R&D. At least 20 of those jobs must be classified as headquarters staff positions. Tax credits are non-refundable and non-transferable and may be claimed for up to 10 years. Businesses that create a minimum of 75 new jobs with average cash compensation that is at least two times the state’s per capita income may receive an enhanced credit. 

Investment Tax Credit: Manufacturers that relocate to or expand in South Carolina are eligible for a one-time corporate income tax credit of up to 2.5% of the cost of new production equipment.   The credit can be used to offset up to 100% of corporate tax liability.  All unused credits can be carried forward for up to 10 years.    

Research and Development Tax Credit: A credit equal to 5% of a company’s qualified research expenses in the state may be claimed by eligible businesses. The credit cannot be used to offset more than 50% of a company’s remaining tax liability after all other credits have been applied. Unused credits can be carried forward for up to 10 years.

Corporate Income Tax Moratorium: Companies creating net new jobs in certain of South Carolina’s economically distressed counties can benefit from a corporate income tax moratorium where the Company’s entire state corporate income tax liability may be eliminated for a period of either 10 or 15 years. At least 90% 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. 

GRANTS

Governor’s Closing Fund: Discretionary cash grant available to businesses that can demonstrate additional funding is needed to close a competitive cost gap relative to other states in contention for a project that involves new job creation and capital investment.

Job Development Credit:  Discretionary program offers a quarterly cash refund of a portion of the personal withholding taxes of new employees. To qualify, businesses must create at least 10 full-time jobs with wages at or above the average county wage and make a substantial capital investment. (Additional job creation and wage thresholds must be met in order for a service facility to be eligible.) The actual amount of refund a business is eligible to claim will depend on the tier level of the county where the project is located, the gross wages of new employees, as well as other factors.  The Coordinating Council generally limits the amount of JDC that may be claimed to no more than $3,250 per new employee per year.  A business is eligible to claim the credit for up to 10 years (15 years if certain criteria is met) provided it retains the number of new jobs specified in the project agreement.  Refunds must be used to reimburse the company for eligible capital expenditures and cannot be used to reduce state tax liability.    

Economic Development Set-Aside Program: Business expansion and attraction projects may qualify for discretionary state funds for road, water/sewer infrastructure and site improvements.

TAX EXEMPTIONS

Sales Tax Exemption: Inventories, intangible personal property, R&D equipment, manufacturing equipment, and industrial electricity are exempt from sales tax.  Construction materials used to construct a manufacturing or distribution facility with at least $100 million invested over an 18-month period are exempt from sales and use tax.  For a new or expanding recycling facility that invests at least $300 million, South Carolina provides certain exemptions from sales and use tax.For a new or expanding recycling facility that invests at least $300 million by the end of the fifth calendar year after the year in which the company begins construction or operation of the facility, South Carolina provides certain exemptions from sales and use tax.For a new or expanding recycling facility that invests at least $300 million by the end of the fifth calendar year after the year in which the company begins construction or operation of the facility, South Carolina provides certain exemptions from sales and use tax.For a new or expanding recycling facility that invests at least $300 million by the end of the fifth calendar year after the year in which the company begins construction or operation of the facility, South Carolina provides certain exemptions from sales and use tax.

Data Centers: Businesses that operate data centers may receive exemptions from sales and use taxes in exchange for investing at least $50 million (or $75 million at a multi-tenant facility) and creating at least 25 jobs with an average wage that is 150% of the county or state per capita wage, whichever is lower.

JOB TRAINING

readySC and Apprenticeship Carolina: These two programs provide recruiting, training, and workforce development tools through the South Carolina Technical College System. Through the Apprenticeship program, eligible businesses can also receive a tax credit of up to $1,000 for each registered apprentice employed for at least 7 months during a year.  This credit may be claimed for up to 4 years. 

Last updated: June 2018



 
Biggins Lacy Shapiro & Company, LLC
609-924-9775
info@blsstrategies.com