| State and County Incentives |
Income Tax The State of South Carolina's corporate income tax rate is 5%, the lowest in the Southeastern United States. Corporations engaged in multi-state activities are taxed only on the portion of income derived from doing business in South Carolina. The basis for South Carolina's gross corporate income and taxable corporate income is based primarily upon a corporation's federal gross income and taxable income. Job Tax Credit The Jobs Tax Credit is a valuable financial incentive that rewards new and expanding technology intensive companies for creating jobs in South Carolina. To qualify, a company must create and maintain a minimum of 10 net new jobs in a taxable year. The credit for each employee ranges from $2,500 in Charleston County to $3,500 in Berkeley County for a period of 5 years and may be carried forward for 15 years from the year earned. The credit per employee may be increased by $1,000 if the project is located in a designated 'multi-county industrial park.' Corporate Headquarters Credit To offset the cost associated with establishing, relocating or expanding a national or regional corporate headquarters facility with at least 40 employees, South Carolina provides a generous credit against corporate income tax or corporate license fees. The credit is equal to 20% of qualifying real property costs and direct construction costs or lease costs for the first 5 years of operation for the headquarters. Research and Development Credit This credit is designed to reward companies for increasing research and development activities in a taxable year, South Carolina offers a credit equal to 5% of the taxpayers qualified expenditures for R&D made in the state. Unused credits may be carried forward for 10 years from the date of the qualified expenditure. (top of page) Property Tax Incentives In South Carolina, only local governments levy property taxes. There is no state tax on real and personal property. To offset property tax liability, qualified companies may take advantage of one of two incentives programs. Depending on the total investment, a company may qualify for either a five-year abatement of a portion of property tax or, by agreement of the county, a fee-in-lie of taxes. Five-Year County Property Tax Abatement Companies may apply for a five-year exemption from county property taxes (the exemption does not apply to school taxes) for the following:
Fee-in-lieu of Taxes (FILOT) Qualified companies investing five million dollars or more in a facility are eligible to take advantage of a very valuable local incentive that allows a county to negotiate a fee-in-lieu of property taxes. The advantages to a company include:
(top of page) Enterprise Zone South Carolina's Enterprise Program is substantially different from the state's other tax incentives because it provides companies with funds to offset the cost of locating or expanding a business facility in the state. (top of page) Job Development Credit With the approval of the South Carolina Coordinating Council, the Job Development Credit provides qualifying technology intensive facilities companies with funds to offset the cost of locating or expanding a business facility in the State. Companies are allowed to keep a portion of their employees state withholding taxes funds the company would normally transfer to the South Carolina Department of Revenue. Representing actual cash contributions to a project, this incentive allows companies to lower the effective cost of investment and positively contribute to a company's bottom line and profitability. Qualified companies creating at least 10 full-time jobs and providing health care benefits, are eligible for cash reimbursements on capital expenditures including land, building, site development or infrastructure, as well as training costs and employee relocation expenses for technology intensive facilities. The actual value of the credit of the credit depends on the following:
(top of page) Job Retraining Credit To remain competitive or introduce new technologies eligible businesses may negotiate with the Coordinating Council for a refund of up to $500 per employee per year for retraining. Companies may use employee withholdings to support half the cost of training the employee. Companies are not allowed to claim the Job Development Credits and the Retraining Credits for the same employee. Participation is subject to the following:
(top of page) Sales Tax South Carolina imposes a 5% sales tax on the gross proceeds of sales of every person engaged in the business of selling tangible personal property at retail. Companies located in the Corridor pay an additional 1% sales tax imposed by local government and used to provide additional revenue and a property tax rollback. Sales Tax Exemptions:
(top of page) Revolving Loan Fund The Berkeley-Charleston-Dorchester Council of Governments' Revolving Loan Fund (RLF) is a locally controlled source of capital that assists start-up and growing businesses whose projects help improve the Charleston region's economy. The primary purpose of the RLF is to aid creation and retention of permanent full-time jobs in the region. The RLF is used as "gap financing," meaning that RLF loans are used to leverage private sector loans and investments to help fulfill an applicants capital needs. Eligible uses of loans include the purchase of machinery, equipment, real estate and inventory, as well as the improvement of real estate and building facilities. Loans can be used to provide permanent working capital on a limited basis. In general, loan terms will average three to five years on working capital, five to seven years on machinery and equipment, and up to 15 years on real estate. The Council of Governments (COG) will fix the interest rate between Prime (+) 2 points and Prime (-) 4 points for the life of the loan. To calculate the approximate amount the RLF can inject into a project, multiply the total project amount by 33%. The overall job creation-to-loan ratio must be one job created or retained per $10,000 in funds borrowed from the COG. RLF loans may be subordinated to a participating lender. Financing is available in amounts up to $150,000. Further, Corridor companies may be able to combine funds available from the Berkeley-Charleston-Dorchester Council of Government's Revolving Loan Fund with monies available from the Charleston Local Development Corporation. (top of page) |
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