South Carolina Tax Credits and Incentives
Job Tax Credit provides a state tax credit for the creation of new jobs. There are three types of SC job tax credits: traditional, annual, and accelerated. Depending on the type of credit, the amount of credit per year for each job created ranges from $1,500 - $8,000. Like the GA credit, the SC credit amount is based on what tier the business in located in (Tiers 1 – 4). For the “traditional” credit, the required monthly average increase in employees is generally 10. For the “annual” and “accelerated” credits, the required monthly average increase in employees is generally 2.
Credit for Investing Property in South Carolina provides a credit against income taxes for qualified manufacturing and productive equipment properties placed in service during the taxable year in SC. Any unused credit may be carried forward for 10 years.
Corporate Headquarters Credit provides a credit against corporate income tax, corporate license fees, or bank taxes, equal to 20% of the qualifying costs of establishing a corporate headquarters in SC, or expanding or adding to an existing corporate headquarters. The credit is made up of two parts - the real property costs and the personal property costs.
Credit for Infrastructure Construction is a credit against corporate income tax or bank tax equal to 50% of the contributions or expenses paid or accrued by the taxpayer for the construction or improvement of water lines, sewer lines, and road projects that are eventually dedicated to public use or a qualifying private entity. Per the SC courts’ interpretation, this credit is only available to corporate taxpayers, not pass-through entities. A credit is available for each infrastructure project of the taxpayer, but is limited to $10,000 per project per year. The maximum infrastructure credit that may be claimed for each project is $40,000. Any unused credit, up to $30,000 for each project, may be carried forward for three years.
Research and Development Tax Credit is similar to the federal tax credit mentioned above. The tax credit can be used to offset up to 50% of net GA income tax liability, after all other credits have been applied. The credit is equal to five percent of a taxpayer's qualified research expenditures made in SC.
Port Volume Increase Credit is a credit to a taxpayer engaged in manufacturing, warehousing, freight forwarding, freight handling, goods processing, cross docking, transloading, wholesaling of goods or distribution that uses South Carolina port facilities and increases its port cargo volume at these facilities by at least 5% in a calendar year over its base year port cargo volume. The credit may be claimed against corporate income taxes under South Carolina Code §12-6-530, income taxes attributable to active trade or business income under South Carolina Code §12-6-545, or employee withholding under South Carolina Code Chapter 8, Title 12. Any unused income tax credit may be carried forward for five years and unused withholding tax credits may be carried forward for 20 quarters.