Cost of Doing Business
Incentivizing Your Move
Each year, South Carolina is ranked by many of the top business publications as one of the most cost-effective locations to open a business. Our competitive advantages at both the state and local level sets us apart from our competition. Our pro-business environment remains after you’ve selected Chesterfield County as your new home. More than 80% of our new announcements are from existing industry!
The following is a summary of tax and incentive information for your review. The Chesterfield County Development Board staff can assist you with creation of a specific state and local tax and incentive summary for your project.
In South Carolina, only local governments may levy property taxes. A company’s property tax liability is a function of: Property Value x Assessment Ratio x Millage.
To determine Fair Market Value, real property is appraised, while tangible personal property is recorded at cost and then depreciated based on a statutory depreciation rate (for manufacturers) and income tax depreciation (for other businesses). The Fair Market Value is then assessed at rates established in the South Carolina Constitution. The local millage rate is applied to the assessed value to determine the property taxes. Millage rates in South Carolina are site specific and set annually by local government. A mill is equal to $0.001.
Property Tax Exemptions may include inventories (raw materials, work-in-progress, finished goods), intangibles (stocks, dividends, interest) and pollution control equipment.
A partial Property Tax Exemption, called an abatement, may be made available to manufacturing, research and development, corporate headquarters, office and distribution facilities meeting certain requirements.
Companies may also be able to negotiate a Fee-in-Lieu (FILOT) of property taxes with Chesterfield County, which can greatly reduce their property tax liability. This property tax incentive is offered at the discretion of local governments. Companies investing as little as $2.5 million dollars may negotiate this exemption with the county in which they locate. This incentive creates significant savings for companies by lowering the assessment ratio from 10.5% for manufacturers to as low as 6% or even 4% for companies investing more than $150 million and creating at least 150 jobs. Furthermore, the millage may be held lower than if the property were not under a FILOT.
At 5%, South Carolina’s Corporate Income Tax Rate is among the lowest in the Southeast. The state uses a single factor sales formula for apportioning income.
Many companies qualify for a Job Tax Credit, which eliminates up to 50% of a company’s corporate income tax liability for a specified number of years. As a SC Tier IV County, Chesterfield County can provide up to $9,000 per job for five years in Jobs Tax Credits for new or expanding companies. Unused credits can be carried over for 15 years
The Corporate License Tax Rate is $1 for each $1,000 of capital stock and paid-in or capital surplus, plus a $15 annual fee.
South Carolina’s sales and use tax rate is 6%. Counties, by approval of a majority of county voters, may assess an additional 1-2% local option sales tax. Proceeds go towards infrastructure improvements or a rollback of property taxes. A variety of sales tax exemptions for companies is offered.
Successful businesses require growth. Chesterfield County and the State of South Carolina offer an array of grants and incentives to help businesses that invest in South Carolina.
- No state property tax
- No local income tax
- No inventory tax
- No sales tax on manufacturing machinery, industrial power or materials for finished products
- No wholesale tax
- No unitary tax on worldwide profits
- Favorable corporate income tax structure
Discretionary State Incentives
Job Development Credit
A Job Development Credit (JDC) is 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. JDCs are approved on a case-by-case basis by the S.C. Coordinating Council for Economic Development. To qualify, 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
The 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 Credit Program
The Enterprise Zone Retraining Credit 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 for the Enterprise Zone Retraining Credit, companies can reimburse themselves up to 50% of approved training costs for eligible production workers (not to exceed $500 per person per year). This program is also overseen by the Coordinating Council for Economic Development.
Rural Infrastructure Fund
The Rural Infrastructure 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
South Carolina provides a possible credit against income taxes or withholding taxes to entities that use state port facilities and increase base port cargo volume by 5% over base-year totals. To qualify, a company must have 75 net tons of non-containerized cargo or 10 loaded TEUs transported through a South Carolina port for their base year.
The Coordinating Council has the sole discretion in determining eligibility for the credit and the amount and type of credit that a company may receive. The total amount of tax credits allowed to all qualifying companies is limited to $8 million per calendar year. A company must submit an application to the Coordinating Council to determine its qualification for, and the amount and type of, any tax credit it will receive.
Tourism Infrastructure Development Grants
The 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
The Coordinating Council for Economic Development, established in 1986 by the General Assembly, was formed 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. The Council consists of the heads or board chairs of 11 state agencies concerned with economic development: S.C. Department of Commerce, State Ports Authority, S.C. Department of Parks, Recreation & Tourism, S.C. Department of Agriculture, S.C Technical College System, S.C. Research Authority, S.C. Department of Employment and Workforce, S.C. Department of Revenue, Jobs for Economic Development Authority, S.C. Department of Transportation and Santee Cooper.