South Carolina Economic Development Directory

South Carolina State Incentives

The JOB TAX CREDIT is a statutory incentive offered to companies, both existing and new, that create new jobs in South Carolina. The credit is available to companies that establish or expand manufacturing, distribution, processing, warehousing, research and development, corporate office, tourism and technology intensive facilities. Agribusiness operations are eligible effective January 1, 2011. In certain limited instances, service and retail facilities may also be eligible. The company must create a monthly average of 10 net new full-time jobs at the facility in a single taxable year. If a company has fewer than 99 employees worldwide, it may be eligible for a job tax credit if it creates a monthly average of two or more net new full-time jobs in a single taxable year. In most instances, companies can expect to receive from $1,500 to $8,000 per job depending on the development tier of the county. Credits can be used to offset up to 50 percent of South Carolina income tax in a single year, and unused credits may be carried forward for 15 years.

SINGLE FACTOR SALES APPORTIONMENT: Companies whose primary business in the state is manufacturing, distribution, or selling or dealing in tangible personal property will apportion its income by multiplying the net income remaining after allocation by a fraction consisting of a company’s sales made in South Carolina divided by its total number of sales. This new formula eliminates property and payroll from the equation and is advantageous for a company whose majority of sales occurs outside South Carolina. The new method is being phased in over a five-year period with a 20 percent reduction each year of income attributable to South Carolina which began in 2007. In 2011, the new formula will be fully applicable.

SALES TAX EXEMPTION: South Carolina offers a number of sales tax exemptions for manufacturers including manufacturing production machinery and applicable repair parts; manufacturing materials that become an integral part of the finished product; industrial electricity and other fuels used in manufacturing tangible personal property; research and development equipment; manufacturers’ air, water and noise pollution control equipment; material handling equipment for manufacturing or distribution projects investing $35 million or more; packaging materials; long distance telecommunication services, including 800 services; and parts and supplies used to repair or condition aircraft owned or leased by the federal government or commercial air carriers. An exemption for construction materials used in manufacturing or distribution facilities, investing at least $100 million over 18 months, was fully implemented July 1, 2011.

PRE-JOB TRAINING PROGRAM: The readysc™ program, offered through the S.C. Technical College System, provides pre-job training at little or no cost for eligible new or expanding companies with curricula tailored to meet a company’s workforce requirements. The comprehensive program includes recruiting, screening, testing, developing customized instruction material along with coordinating and upfitting training space.

JOB DEVELOPMENT CREDIT (JDC): A discretionary, performance-based incentive that rebates a portion of new employees’ withholding taxes that can be used to address the specific needs of individual companies. A company must meet certain business requirements and the amount a company receives depends on the company’s pay structure and location.

ECONOMIC DEVELOPMENT SET-ASIDE PROGRAM: Assists companies in locating or expanding in South Carolina through road or site improvements and other costs related to business location or expansion. Overseen by the Coordinating Council for Economic Development, it is the Council’s primary business development tool for assisting local governments with road, water/sewer infrastructure or site improvements related to business location or expansion.

ENTERPRISE ZONE RETRAINING PROGRAM: Helps existing industries maintain their competitive edge and retain their existing workforce by allowing them to claim a Retraining Credit for existing production employees. If approved, companies can reimburse themselves up to 50 percent of approved training costs for eligible production workers (not to exceed $500 per person per year).

RURAL INFRASTRUCTUR FUND (RIF): Assists qualified counties in the state’s rural areas by providing financial assistance for infrastructure and other activities that enhance economic growth and development. It can be used for job creation and/or product development. Qualified counties are designated as “Tier III” or “Tier IV” by the Department of Revenue and have received approval for an economic development strategic plan by the Coordinating Council for Economic Development.

PORT VOLUME INCREASE CREDIT: A possible credit against income taxes or withholding taxes to entities that use state port facilities and increase base port cargo volume by 5 percent over base-year totals. To qualify, a company must have 75 net tons of non-containerized cargo or 10 loaded TEUs transported through a SC port for their base year. The total amount of tax credits allowed to all qualifying companies is limited to $8 million per calendar year.

TOURISM INFRASTRUCTURE DEVELOPMENT GRANT: Supports new or expanding tourism or recreation facilities or designated development areas primarily through infrastructure projects. This program is generated from a share of the state admissions tax on qualified tourism and recreation establishments and is overseen by the Coordinating Council for Economic Development.

The COORDINATING COUNCIL FOR ECONOMIC DEVELOPMENT was established by the General Assembly in response to a general need for improved coordination of economic development efforts by those state agencies involved in the recruitment of new business and the expansion of current enterprises throughout the state.

ECONOMIC IMPACT ZONE INVESTMENT CREDIT: Allows manufacturers locating in Economic Impact Zone (EIZ) counties a one-time credit against a company’s corporate income tax of up to 5 percent of a company’s investment in new production equipment. The actual value of the credit depends on the applicable recovery period for property under the Internal Revenue Code.

CORPORATE HEADQUARTERS CREDIT: Provides a 20 percent credit based on the cost of the actual portion of the facility dedicated to the headquarters operation or direct lease costs for the first five years of operation. The credit can be applied against either corporate income tax or the license fee. These credits are not limited in their ability to eliminate corporate income taxes and can potentially eliminate corporate income taxes for as long as 10 years from the year earned. Eligibility is determined by meeting a number of specific criteria.

RESEARCH & DEVELOPMENT TAX CREDIT: A credit equal to 5 percent of the taxpayer’s qualified research expenses in the state. The credit taken in any one taxable year may not exceed 50 percent of the company’s remaining tax liability after all other credits have been applied. Any unused portion of the credit can be carried forward for 10 years from the date of the qualified expenditure.