Section 12-20-105 - Tax credits(A) Any company subject to a license tax under Section 12-20-100 may claim a credit against its license tax liability for amounts paid in cash to provide infrastructure for an eligible project. A company may enter into a multi-year commitment to provide cash for eligible infrastructure. Where a company has entered into an agreement to pay in cash for infrastructure for an eligible project, and the eligible project is not constructed by the end of the tax year, the company may provide cash in that or a future year to another eligible project and retain the credit.(B)(1) To be considered an eligible project for purposes of this section, the project must qualify for income tax credits under Chapter 6, Title 12, withholding tax credit under Chapter 10, Title 12, income tax credits under Chapter 14, Title 12, or fees in lieu of property taxes under either Chapter 12, Title 4, Chapter 29, Title 4, or Chapter 44, Title 12.(2) If a project is located in an office, business, commercial, or industrial park, or combination of these, and is used exclusively for economic development and is owned or constructed by a county, political subdivision, or agency of this State when the qualifying improvements are paid for, the project does not have to meet the qualifications of item (1) to be considered an eligible project. As provided in subsection (C)(4), the county or political subdivision may sell all or a portion of the business or industrial park.(3) In a county in which at least five million dollars in state accommodations tax imposed pursuant to Section 12-36-920 has been collected in at least one fiscal year, a county or municipality-owned multiuse sports and recreational complex is considered an "eligible project" promoting economic development for all purposes of the credit allowed pursuant to this section.(C) For the purpose of this section, "infrastructure" means improvements for water, wastewater, hydrogen fuel, sewer, gas, steam, electric energy, and communication services made to a building or land that are considered necessary, suitable, or useful to an eligible project. These improvements include, but are not limited to: (1) improvements to both public or private water and sewer systems;(2) improvements to both public or private electric, natural gas, and telecommunications systems including, but not limited to, ones owned or leased by an electric cooperative, electric utility, or electric supplier, as defined in Chapter 27, Title 58;(3) fixed transportation facilities including highway, road, rail, water, and air;(4) for a qualifying project under subsection (B)(2), infrastructure improvements include shell buildings, incubator buildings whose ownership is retained by the county, political subdivision, or agency of the State and the purchase of land for an office, business, commercial, or industrial park, or combination of these, used exclusively for economic development which is owned or constructed by a county, political subdivision, or agency of this State. The county, political subdivision, or agency may sell the shell building or all or a portion of the park at any time after the company has paid in cash to provide the infrastructure for an eligible project;(5) for a qualifying project pursuant to subsection (B)(2), infrastructure improvements also include due diligence expenditures relating to environmental conditions made by a county or political subdivision after it has acquired contractual rights to an industrial park. Due diligence expenditures include such items as Phase I and II studies and environmental or archeological studies required by state or federal statutes or guidelines or similar lender requirements. Contractual rights include options to purchase real property or other similar contractual rights acquired before the county or political subdivision files a deed to the property with the Register of Mesne Conveyances;(6) for a qualifying project pursuant to subsection (B)(2), site preparation costs include, but are not limited to: (a) clearing, grubbing, grading, and stormwater retention; and(b) refurbishment of buildings that are owned or controlled by a county or municipality and are used exclusively for economic development purposes; and(7) for a qualifying project pursuant to subsection (B)(2) cash payments to a county, political subdivision, or agency of this State for purposes of defraying public debt incurred to pay for infrastructure on the project are allowed.(D) A company is not allowed the credit provided by this section for actual expenses it incurs in the construction and operation of any building or infrastructure it owns, leases, manages, or operates.(E)(1) The maximum aggregate credit that may be claimed in any tax year by a single company is six hundred thousand dollars.(2) Notwithstanding the annual credit limit provided pursuant to item (1), for a contribution for a qualifying project located in a county classified as a Tier II, III, or IV county pursuant to Section 12-6-3360(B), the maximum aggregate credit that may be claimed in a tax year by a taxpayer is increased by: County Tier | Credit Amount Increase |
Tier II County | Fifty thousand dollars |
Tier III County | One hundred thousand dollars |
Tier IV County | One hundred fifty thousand dollars. |
(3) To be eligible for the increased credit amount provided in item (2), the total of the taxpayer's credit claim for the taxable year must be for a qualifying project located in a single Tier II, III, or IV county. If the single qualifying project extends across a county boundary, then for purposes of determining eligibility and the amount of the applicable increased credit, the qualifying project is considered to be located in the county with the lowest credit amount unless at least eighty percent of the total costs associated with the project are attributable to that portion of the project located in the county with the higher allowable credit amount.(F) The credits allowed by this section may not reduce the license tax liability of the company below zero. If the applicable credit originally earned during a taxable year exceeds the liability and is otherwise allowable under subsection (D), the amount of the excess may be carried forward to the next taxable year.(G) For South Carolina income tax and license purposes, a company that claims the credit allowed by this section is ineligible to claim the credit allowed by Section 12-6-3420.(H) By March first of each year, the Department of Revenue shall issue a report to the Chairman of the Senate Finance Committee, the Chairman of the House Ways and Means Committee, and the Secretary of the Department of Commerce outlining the history of the credit allowed pursuant to this section. The report shall include the amount of credit allowed pursuant to this section and the types of infrastructure provided to eligible projects.(I) For the purposes of this section, for a qualifying project pursuant to subsection (B)(3), infrastructure includes all applicable provisions of subsection (C) applying to the development and construction of the sports and recreational complex and further includes costs of land acquisition and preparation, construction of facilities and venues in the complex, improvements and upgrades to existing facilities and venues, and any other capital costs incurred in the acquisition, construction, and operation of the complex, including debt payments on any loans or bonds issued to pay for such infrastructure.Amended by 2022 S.C. Acts, Act No. 184 (HB 3340),s 1, eff. 5/16/2022, app. for credits first claimed for taxable years beginning after 2021.Amended by 2014 S.C. Acts, Act No. 279 (HB 3644), s 3, eff. 6/10/2014.Amended by 2012 S.C. Acts, Act No. 187 (HB 3720), s 2, eff. 6/7/2012.Amended by 2010 S.C. Acts, Act No. 290 (HB 4478), s 18, eff. 1/1/2011.2008 Act No. 313, Section 2.I.2, eff 6/12/2008; 2007 Act No. 116, Section 6, eff 6/28/2007, applicable for tax years beginning after 2003; 2007 Act No. 110, Section 59.A, eff 6/21/2007, applicable for tax years beginning after 2003; 2005 Act No. 145, Section 22.A, eff 6/7/2005; 2003 Act No. 69, Section 3.QQ, eff 6/18/2003; 1999 Act No. 93, Section 15; 1997 Act No. 151, Section 9; 1996 Act No. 231, Section 4A. 2014 Act No. 279, Section 3.C, provides as follows:
"C. This section takes effect upon approval by the Governor and applies for contributions made for a multiuse sports and recreational complex placed in service after 2011."
2022 Act No. 184, Section 2, provides as follows:
"SECTION 2. Upon approval of the Governor, this act applies for credits first claimed for taxable years beginning after 2021."