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The State of South Carolina has a reputation as a superior business location, largely due to an exceptional economic climate that helps companies hold down operating costs and increase their return on investment. South Carolina's performance-based tax incentives reward companies for job creation and investment. The state's probusiness policies are demonstrated by the following:
A Cash Rebate of Payroll Taxes Directly Back To Your Company
South Carolina's Enterprise Program is substantially different from the state's other tax incentives because it does not reduce a particular tax liability; instead, it provides companies with funds to offset the cost of locating or expanding a business facility in this state. Representing actual cash contributions to the project, this incentive allows South Carolina to lower the effective cost of investment and positively contribute to a company's bottom line and profitability.
The company realizes these benefits through the Job Development Credit, which it can collect for up to 10 or 15 years, depending on the development status of the county in which the company is located.
This incentive is awarded to the company at the discretion of the State of South Carolina Coordinating Council. An application must be completed with certain criteria obtained.
The Nation’s Top Workforce Training Program – Customized Training At No Cost To Your Company
ReadySC (formerly the Center for Accelerated Technology Training-CATT) is South Carolina's unique and outstanding employment training resource for companies locating or expanding in the state. The State Board for Technical and Comprehensive Education (TECH) operates the program and oversees the statewide Technical Education College System. ReadySC recruits, screens, and trains individuals for specific assignments with new businesses and industries as well as expanding businesses. With the exception of very specialized areas, the training is provided at no cost to the company. The program is funded entirely with state money and imposes no target populations.
ReadySC is one of the oldest start-up training programs in the nation and has been used as a model elsewhere. Since its inception 1961, the program has trained more than 250,000 trained workers for more than 1,900 firms. ReadySC's extensive start-up training expertise developed over the years is unmatched in any other state. Training is usually short-term and is provided prior to opening day or expansion. This assures a trained workforce ready to go to work when the facility opens. The training programs are usually located near the facility and often conducted at the facility itself, if feasible. Each program is customized to a company's unique specifications.
The Corporate Income Tax Is Being Phased Out By 2010
South Carolina's positive business environment starts with its corporate income tax structure. Businesses locating in South Carolina will benefit from:
In South Carolina, businesses are only taxed on the portion of income derived from their in-state operations.
Offsets Corporate Income Tax Liability By 50% For As Long As 20 Years
The Jobs Tax Credit is a valuable financial incentive that rewards new and expanding companies for creating jobs in South Carolina. In order to qualify, companies must create and maintain a certain number of net new jobs in a taxable year. The number of new jobs is calculated as the increase in the average monthly employment from one year to the next. This credit is then used to against your South Carolina corporate income tax liability. Unused credits can be carried forward for fifteen years.
South Carolina's Sales and Use Tax & Incentives Sales and Use Tax
The sales and use tax rate in South Carolina is 5 percent. Some counties assess a local option sales tax and/or a capital project sales tax. The sales tax applies to all retail sales, leases, and rentals of tangible personal property, including the value of property purchased at wholesale and then used or consumed by the purchaser. The use tax is based on the sales price of such property.
Out-of-State Sales
South Carolina exempts sales tax on the gross proceeds of the sales of tangible personal property where the seller, by contract of sale, is obligated to deliver to the buyer, an agent of the buyer, or a donee of the buyer, at a point outside of the state, a carrier, or mails for transportation outside this state.
Out-of-State Purchases-Use Tax Credit
South Carolina provides a credit to the use tax for sales and use taxes on purchases of tangible personal property paid in another state, if the state in which the property is purchased and the sales and use are taxes paid allows substantially similar tax credits on tangible personal property purchased in this state. If the amount of the sales or use tax paid in the other state is less than the amount of use tax imposed in this state, the user shall pay the difference to this state.
Sales Tax Incentives
South Carolina supports new and expanding industry with a wide range of valuable exemptions to the sales tax (state and local). Some of these exemptions include exemptions on:
Property Taxes
In South Carolina, only local government levies property taxes. There is no state tax on real or personal property. In addition, there is no tax, state or local, on inventories or intangibles in South Carolina.
Property Tax Exemptions
In support of business, South Carolina exempts three classes of property from local property taxation:
5-Year Property Tax Abatement
By law, manufacturers (investing $50,000 or more) and distribution or headquarters facilities (investing $50,000 or more and creating 75 new jobs) are entitled to a five-year property tax abatement from county operating taxes. This abatement usually represents an offset of between 20 to 50 percent savings. The property tax abatement is available for the first five years of the investment.
Fee-In-Lieu of Taxes (FILOT)
In addition to the statutory incentives explained in the previous sections, South Carolina also uses discretionary incentives at the state and local level to address the specific needs of individual companies on a case-by-case basis. 20-Year Fee-in-Lieu of Property Taxes (FILOT) Under this program, companies making substantial capital investments may negotiate a lower assessment ratio and stabilize millage rates for up to 20 years. South Carolina law allows a county to negotiate with a company for a FILOT agreement if total capital investment is $5 million or greater. The FILOT replaces the 5-year abatement and is offered at the discretion of the county.
Companies may include both real and personal property under the FILOT agreement. The one exception to this rule is property that has been on the tax rolls in the state previously, including existing buildings. (This restriction is waived for companies investing $45 million or more in new equipment.)
Source: http://www.unioncountydevelopment.com/incentives.htm