Doing business in South Carolina can be a great opportunity for companies looking to expand their operations. The state offers a variety of tax incentives to businesses located in its communities, making it an attractive option for businesses of all sizes. The state reviews the development categories of South Carolina counties every year and reclassifies them annually in the five-tier system based on the unemployment rate and the number of people living below poverty in each of the state's 46 counties. This system helps to determine which businesses are eligible for certain tax credits.
For example, transportation providers, utilities, electric unions and telephone companies may be eligible for a credit against license fees. Manufacturers located in Economic Impact Zone (EIZ) counties may be eligible for a single credit against their corporate income tax of up to 5% of their investment in new production equipment. Employers who hire residents who have received family independence payments in South Carolina for three months immediately before getting a job are entitled to a tax credit. South Carolina also provides a tax credit to taxpayers who have contracts with the state if they award a subcontract to a certified minority company based in South Carolina.
Additionally, companies that create new jobs in the state are eligible for a tax credit against their South Carolina income tax liability. South Carolina allows an income tax credit equivalent to 10% of the company's qualifying investments in plants and equipment for renewable energy operations. The state also exempts from property tax all industrial plant facilities or equipment that are designed to eliminate, mitigate, prevent, treat, reduce, or control internal or external water, air, or noise pollution required by the state or federal government and that are used in the performance of its businesses. South Carolina gives companies that build or operate a qualified recycling facility a 30% credit each year to invest in recycling properties.
There are eight census districts designated as qualifying opportunity zones in Charleston County, South Carolina. Some financial incentives available in South Carolina are legal and your company requests them directly when filing its state corporate income taxes. These include a five-year property tax reduction, sales tax exemptions, labor tax credits, corporate headquarters credit, and the 26% development credit for research. Sales in states that do not tax the corporation (as a result of Public Law 86-27) are not added back to sales in South Carolina in the apportionment formula. South Carolina helps businesses locate or expand in the state through road, water and sewer infrastructure, site improvements, and other costs related to the location or expansion of the business.
All these incentives make South Carolina an attractive option for businesses looking to expand their operations.