South Carolina & Chesterfield County
Corporate Income Tax Credits:
Job Tax Credits
South Carolina rewards qualifying businesses for creating new jobs—in Chesterfield County, a Jobs Tax Credit of $8,000, per job, for five years. Unused credits can be carried forward 15 years.
Multi-County Industrial Park
In South Carolina, a county may join with another county to form a “multi-county industrial park,” which raises the value of the Jobs Tax Credit by $1,000 per job.
Corporate Headquarters Credit
To offset the costs of relocating or expanding corporate headquarters, the state provides credit equal to 20% of the development, construction or direct lease costs during the first five years of operations.
Enhanced Corporate Headquarters Credit
An Enhanced Headquarters Credit—equal to 20% of the personal property costs of establishing the headquarters—is offered to eligible companies when employee compensation levels exceed 1.5 times the state per capita income average.
Research & Development Tax Credit
South Carolina offers a credit equal to 5% of the taxpayer’s qualified expenditures for research and development made in the state. The credit taken, in any one tax year, may not exceed 50% 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.
State and Local Tax Credits:
Sales and Use Tax
The state Sales and Use Tax rate is 5%. Chesterfield County assesses an additional 3%. Out-of-state sales are exempted. Use Tax credits are available for tangible personal property purchases made out of state.
State Sales Tax Incentives
Exemptions include state sales tax on:
- Manufacturing machinery and equipment
- Research and development machinery and equipment
- Repair parts
- Materials that will become a integral part of a finished product
- Electricity or other fuels used in the manufacturing process
- All pollution control equipment
- Packaging materials
- Long distance telecommunications, including 800 services
- Material handling equipment for manufacturers and distributors investing $35 million or more
Job Development Credit (JDCs)
A performance-based incentive, JDCs provide companies with funds to offset the cost of locating or expanding a business facility in the state, by allowing them to use a portion of new employees’ withholding taxes for eligible project expenses. A company can collect the credit for 10 years and in some instances up to 15 years. JDCs are approved on a case-by-case basis by the S.C. Coordinating Council for Economic Development (CCED). Qualifying companies must meet certain business requirements and the amount a company receives depends on the company’s pay structure and location. JDC funds must go to pay for real property or real property improvements.
Port Volume Increase Credit
South Carolina provides income tax credits to qualifying companies that use state port facilities and increase base port cargo volume by five 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 South Carolina port for their base year. Tax credits are limited to $8 million per calendar year.
Economic Development Set-Aside Program
The primary business development tool for the Coordinating Council for Economic Development, the Economic Development Set-Aside Program provides funds for road or site improvements and other costs related to business location or expansion.
Rural Infrastructure Fund
The Rural Infrastructure Fund (RIF) provides qualified counties in the state’s rural areas with financial assistance for infrastructure and other activities that enhance economic growth and development. The fund also can be used for job creation and product development.
Five-Year Property Tax Abatement
Manufacturers, distributors and certain other kinds of businesses are exempt from County Ordinary and County Operating Taxes for the first five years of operations. This results in an average 30-35% reduction in both real and personal property taxes for the first five years.
Fee in Lieu of Property Taxes (FILOT)
The CCEDA has the authority to offer a FILOT to companies that meet the criteria set forth annually by the South Carolina Department of Revenue in their publication, South Carolina Tax Incentives for Economic Development. Any FILOT will be applied to new investment or expanding real and personal property only and will not include existing property currently on the Chesterfield County tax digest. The following performance table will apply:
Super and Enhanced Investment Fees
The CCEDA has the authority to offer of a Super or Enhanced Investment Fee to companies that meet or exceed the minimum criteria set forth annually by the South Carolina Department of Revenue in their publication, South Carolina Tax Incentives for Economic Development. As of 2011, the statutory minimum requirement for this incentive was $150 million investment and 125 new jobs. This incentive reduces the company’s property tax assessment to 4% for up to 40 years. Any Special Source Revenue Credits (SSRC) offered in addition to a Super or Enhanced Investment Fee will be evaluated and preliminarily approved by the county administrator prior to being offered.
Special Source Revenue Credit (SSRC)
The Special Source Revenue Credit (SSRC) is a rebate of a percentage of the Fee Agreement payments for a negotiated period of time. This incentive is at the discretion of the CCEDA and Chesterfield County government. The amount of the SSRC and the number of years are negotiated and based on the type of project, total investment, job creation, and average wages.
Special Source Revenue Bond (SSRB)
The CCEDA asks that Chesterfield County provide it with the authority to negotiate a SSRB with companies meeting the following minimum criteria: $20 million capital investment, 100 jobs, and county average wage rate. A SSRB effectively bonds the revenue stream associated with a SSRC and provides companies with upfront cash. Essentially, a SSRB is a front-end reimbursement of a percentage of the company’s property taxes over time. Please note that the CCEDA reserves the right to ask for a special letter of conditions from the county administrator and subject to approval by Chesterfield County Council should a quality company be interested in locating in the county and not precisely fit the above criteria. Limited claw-back provisions would be a part of any SSRB agreement.
Industrial Revenue Bonds
For qualifying projects, and companies that obtain external letters of credit for collateral, Chesterfield County agrees to assist by serving as a conduit for low-interest Industrial Revenue Bonds (IRBs). Companies may also utilize the South Carolina Jobs Economic Development Authority (JEDA) as an IRB conduit. All parties agree that IRB financing is a non-recourse, non-obligation financing instrument.
Certain projects require commitment from the local leadership to expedite permitting and plan review. To the extent allowed by local and state law, Chesterfield County will commit to assist projects with expedited permitting as needed.