York County looks to partner with new and expanding companies making capital investments. To offset local property tax liability, a qualifying company may take advantage of one of two local incentive programs.
Property Tax Abatement
- Statutory exemption that allows qualifying companies to abate the county portion of property taxes for five-years on any new investment over $50,000. The Town of Clover, City of Rock Hill, and Town of Fort Mill also provide for an abatement of their property taxes for new investment. Estimated savings of approximately 20 to 25% annually over a five-year period.
- Investment must be greater than $50,000 in new capital expenditure in one year.
- Companies must be involved in manufacturing, R&D, corporate headquarters or distribution/warehouse operations. If other than manufacturing and R&D, there must be at least 75 new jobs created.
- Company files return PT-300 to SC Department of Revenue and reduction is automatic.
Fee-in-Lieu of Property Tax Agreement
- Discretionary agreement negotiated with York County that can provide a long-term benefit to a qualified company while insulating the firm from annual property tax increases. This value amounts to up to a 43% reduction in property taxes annually for 20 to 30 years. Additional savings may be achieved for qualifying companies.
- The company’s project must be competitive with other locations and the firm must be a manufacturer, warehouse/distribution, or an office, headquarter or R&D operation.
- Qualified company must commit to a minimum of $2.5 million investment over a five-year period to be eligible.
- Manufacturers can benefit from lowering the statutory 10.5% assessment rate to as low as 6% on real and personal property. Warehouse/distribution and office operations can benefit from reducing the statutory assessment of 10.5% to as low as 6% on personal property.
- A bond/incentive attorney must prepare legal documents for review and final submission to York County Council for final approval. The process for full approval by York County Council is approximately eight weeks once negotiated terms have been reached.
Property Tax Exemptions
- Statutory property tax exemptions on inventories, intangibles, pollution control equipment.
Industrial Revenue Bonds
- A low cost means to finance a new or expanding operation which can be used to acquire land, construct buildings, improve real property and acquire new machinery.
- Maximum bond issuance is $10 million. Investment cannot exceed $20 million in expenditures over three years.
South Carolina looks to incentivize both new and expanding companies investing or adding jobs to the state. Programs are either statutory or discretionary in nature. Discretionary programs are negotiated and in some cases have established time periods required for capital expenditures and/or job goals to be achieved.
Jobs Tax Credit
- A benefit to companies for job creation that helps reduce state corporate income tax liability, up to 50% in a given year. Program allows for 15 year carry forward of unused credits.
- An annual average monthly employment increase of 10 or more new full-time jobs must be created in order to be eligible andthe company must be involved in manufacturing, processing, warehousing, distribution, tourism, be considered a corporate office facility, bank or qualified technology intensive facility.
- Credit of $1,500 annually for five years for each new job. Credit increases to $2,500 per job with Multi-County Business Park status.
- Qualified small businesses (a firm employing 99 or fewer employees) can receive a credit benefit from this program but value of credit may vary depending upon certain performance criteria.
Investment Tax Credit
- Manufacturers can take a one-time negotiated credit against their corporate income tax of up to 2.5 % of a company’s investment in new production equipment. Value of credit varies depending upon the recovery period for property under Internal Revenue Code. Can be used to offset up to 100% of corporate income tax liability with unused credits carrying forward for up to 10-years.
Corporate Headquarters Tax Credit
- A credit against state corporate income tax, or corporate license tax based on adding or growing an existing corporate headquarters.
- Credit is equal to 20% of the qualifying costs for establishing or expanding a corporate headquarters. Unused credits can have a 10 year carry forward.
- To qualify a corporate headquarter operation must meet certain investment and/or job thresholds.
Research and Development Tax Credit
- A credit against state corporate income tax, or corporate license tax based on a firm making qualified research and development expenditures.
- Credit equal to 5% of expenditures is available; credit is limited to offset 50% of income tax liability after all other tax credits have been applied.
Job Development Credit
- A discretionary performance based incentive from the state that rebates a portion of a new employees’ state withholding tax back to the company. Requires approval by the South Carolina Coordinating Council for Economic Development and applicants are considered on a case-by-case basis.
- Eligible companies must meet specific requirements per the program guidelines and a non-refundable application fee of $4,000 must be paid.
- Approved companies can receive a percentage of each eligible individual employee’s personal income tax returned to them as a cash rebate in either quarterly or annual payments. Depending on salary values, this could be as much as 4% of annual payroll.
Sales Tax Exemptions
- Machinery and equipment for both research and development and production
- Repair parts
- Materials which will become an integral part of the finished product
- Manufacturing of electricity
- Pollution control equipment
- Packaging Materials
- Long distance telecommunications, including 800 services
Sales Tax Caps
- South Carolina provides a $500 sales tax cap on the purchase or lease of aircraft, motor vehicles, motorcycles, boats, recreational vehicles and other items.