Benefits of doing business in South Carolina
Consistently named among Condé Nast Traveler's top 10 US destinations, Charleston boasts a world-class array of recreational and cultural amenities rarely found in a mid-size market. The three-county region is also home to several colleges and universities, which greatly influence local arts and entertainment options. And for the career-minded, several professional associations and training programs are available to ensure business success.
Greater Charleston has become a recognized hotspot for new business investment, while also offering the natural beauty, world-class culture and historic charm that have made the area such a popular visitor destination. With a fast-growing population, a technically skilled workforce, efficient access to the global marketplace, and a diverse portfolio of real estate options, Charleston offers the right combination for business success.
In addition, the State of South Carolina offers many incentives to help companies locate in our area.
With a business-friendly tax and incentive structure, Charleston-area companies are able to hold down operating costs while improving their ROI.
- Workforce recruiting and training programs at little or no cost to qualifying companies
- Numerous ways to reduce, or in some cases eliminate, your company's corporate income taxes
- A wide range of sales tax exemptions to reduce start-up and annual operating costs
- Property tax incentives can be tailored to meet your company's needs
- Special discretionary incentives at the local and state level can be used to meet specific needs of a company on a case-by-case basis
1. To offset property tax liability, qualified companies may take advantage of one of two incentives programs.
- Five-Year Property Tax Abatement
- Companies may apply for a five-year exemption from county property taxes (the exemption does not apply to school taxes) for the following:
- $50,000 investment in manufacturing facilities
- $50,000 investment in research and development facilities
- $50,000 investment (and 75 new jobs) in corporate headquarters or distribution facilities
- Fee-In-Lieu of Property Tax (FILOT)
- This discretionary local incentive allows qualifying companies to negotiate a fee instead of paying property taxes. Advantages include:
- Significantly lowering property tax payments by negotiating a lower assessment ratio (from 10.5% to as low as 6%)
- Ability to lower property tax payments 43% on average by negotiating a fee-in-lieu
- Negotiating the applicable millage rate to a 20-year locked rate or a five-year adjustable rate
- Stabilizing payments to local government for the term of the agreement (up to 20 years)
In addition to the property tax abatement, the State of South Carolina offers the following:
2. Jobs Tax Credit
- Rewards new and expanding companies for creating jobs in South Carolina.
- 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 against your South Carolina corporate income tax liability.
- Unused credits can be carried forward for 15 years.
3. Corporate Headquarters Credit
- South Carolina provides a generous credit against corporate income tax or corporate license fees to offset costs associated with establishing, relocating or expanding a corporate headquarters facility with at least 40 employees.
- The credit is equal to 20% of qualifying real property costs and direct construction or lease costs for the first five years of operation.
4. Research & Development Credit
- Designed to reward companies for increasing research and development activities in a taxable year.
- Offers a credit equal to 5% of the taxpayer's qualified expenditures for R&D made in the state.
- Unused credits may be carried forward for 10 years.
5. Job Development Credit
- With the approval of the South Carolina Coordinating Council, qualified companies are provided funds to help offset the cost of locating or expanding a business facility in the state. Effectively, the credit uses the state withholding taxes of new employees to reimburse the company for eligible expenditures including:
- Utility upgrades
- Fixed transportation facilities
- Real estate (site or building improvements)
- Manufacturing pollution control equipment
- Approved training costs
- Employee relocation expenses for technology-intensive facilities, R&D and certain corporate headquarters
- The Job Development Credit begins once the company meets the agreed-upon job and investment goals, and is generally available for 10 or 15 years, depending on the development status of the county in which the company is located.
