South Carolina Incentives

Job Tax Credit

South Carolina provides a tax credit for qualifying businesses that create new jobs in the State.

To qualify, a business must:

  • Be a certain type of business:
    • Manufacturing
    • Processing
    • Tourism
    • Warehousing
    • Distribution
    • Research & Development
    • Service-related Facility
    • Corporate Office Facility
    • Technology Intensive Facility
  • Create and maintain a required minimum number of 'new, full time jobs' at the time the facility is initially staffed.

The credit is available for 5 years with a 15 year carry forward.

The basic credit amount for each new job ranges from $1,500 to $8,000, partially dependent upon where the facility is located.

An additional credit amount per new qualifying job, subject to certain dollar amounts, is $1,000 per job.

The Credit is adjusted for job increases or decreases.

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Job Development and Job Retraining Credits

Two economic incentives are contained in the South Carolina Code, commonly referred to Job Development and Job Retraining Credits. These credits allow businesses approved by the Coordinating Council for Economic Development at the Department of Commerce to obtain a refund of employee withholding to use for, or reimburse the cost of, approved business expenditures.

Job Development Credit
To qualify a business must:

  • Be primarily in the type of business required for the job tax credit (see previous incentive),
  • Provide a benefits packages, including healthcare, to full time employees at the project site where the investment is made,
  • Enter into a revitalization agreement with the Council,
  • Have negotiated incentives determined by the Council to be appropriate for the project, benefits of project outweigh the costs to the public, and full all requirements.

Job Retraining Credit
To qualify, a business must:

  • Be engaged in manufacturing, processing, or technology at a manufacturing, processing, or technology intensive facility,
  • Demonstrate the necessity for retraining of production or technology employees so that the business may remain competitive or to introduce new technologies,
  • Provide a benefits package, including healthcare, to employees being retrained,
  • Match on a dollar for dollar basis the amount claimed as a job retraining credit,
  • Enter into a retraining agreement with the Council and submit a nonrefundable $500 processing fee,
  • Have approved by and/or performed by a technical college under the jurisdiction of the Sate Board for Technical and Comprehensive Education.

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Tax Moratorium

A Tax Moratorium is available for businesses that invests and created at least 100 new, full time jobs in counties that have an average unemployment rate of at least twice the State average, over the last 24 months, or in one of three counties with the lowest per capita income.

To qualify, the business must:

  • Create the first new job by July 1, 2005,
  • Create the new jobs within 5 years from the date of the first job,
  • Place at least 90% of its total investment in the South Carolina county referred to.

The moratorium begins the first full taxable year after the taxpayer qualifies and either at 10 years or when the number of full time jobs falls below 100, whichever is earlier.

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Research and Development Credit

The Research and Development Credit allows a corporation to take a credit against corporate income tax, imposed under South Carolina Code, or corporate licensing fees imposed. The credit is equal to 5% of qualified research expenses made in the State. The Credit is limited to 50% of the taxpayer's tax liability remaining after all other credits have been applied. Any unused credit can be carried forward but must be used before 10 years after from the date of the qualified expenses.

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Economic Impact Zone Tax Credit

When a business invests in a qualified manufacturing and productive equipment property, an Economic Impact Zone, South Carolina allows the business an “Economic Impact Zone Investment Tax Credit.

The amount of credit for qualifying investments are:

  • 1% of total aggregate bases for 3 year property
  • 2% of total aggregate bases for 5 year property
  • 3% of total aggregate bases for 7 year property
  • 4% of total aggregate bases for 10 year property
  • 5% of total aggregate bases for 15 year property

The credit is limited to $5 million.

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Corporate Headquarters Credit

The Corporate Headquarters Credit is available to a corporation that establishes a corporate headquarters in South Carolina, or expands or adds to an existing corporate headquarters.

The credit may be taken against corporate income tax or corporate license fees imposed and equals 20% of the qualifying costs.

The credit may be carried forward for 10 years, up to 15 years.

The Corporate Headquarters Credit is made up of two parts:

  • Part I - Real Property Costs
  • Part II - Personal Property Costs

(The taxpayer may qualify for Part I or Part I and II)

To qualify for Part I:

  • The real property costs must be at least $50,000.
  • Must create at least 40 new, full time jobs, with at least 20 of these jobs be headquarters staff employees

To qualify for part II:

  • Personal property is purchased fro the facility
  • Property is used for headquarters or research and development related functions
  • Property is capitalized for income tax purposes
  • At least 75 new, full time jobs are created, with at least 20 jobs being headquarters staff employees.

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Credit for Hiring Family Independence Recipient

When a company hires persons who receive family independence payments from South Carolina for 3 months prior to employment, a credit is allowed.

The basic credit amount is equal to:

  • 20% of wages paid to employee for each full month of employment during the first 12 months of employment
  • 15% of wages paid to employee for each full month of employment during the second 12 months of employment
  • 10% of wages paid to employee for each full month of employment during the third 12 months of employment

The total amount claimed per employee under both the job tax credit and the basic part of the family independence credit is limited to $5,500 for companies not located in a "distressed" county.

If the company is located in a distressed or least developed county, an additional credit per employee is $175, up to an additional $2,100 for each qualifying year.

Any unused credit may be carried forward for 15 years.

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Palmetto Seed Capital Credit

Palmetto Seed Capital Credit allows a business a credit for qualified investments in the Palmetto Seed Capital Corporation or the Palmetto Seed Capital Fund Limited Partnership against income or bank taxes or insurance premium taxes.

The credit is equal to the lesser of:

  • All qualified investments during the tax year multiplied by 30% plus any credit carryover.
  • 50% of all qualified investments during all tax years multiplied by 30%.
  • The use of the credit is limited to the taxpayer's tax liability for the year, after the application of all other credits.
  • Unused credits can be carried forward 10 years from date of qualified investment.

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Credit Against License Fee for Infrastructure

A business subject to a license fee imposed on South Carolina property and gross recipients, such as a power company, water company, gas company, or telephone company can take a credit against its license fee liability for 100% of the amount paid in cash for infrastructure for an eligible project of another taxpayer.

The maximum credit that may be earned in any tax year is $300,000. But the credit cannot reduce the license fee liability below zero.