S.C. Code § 12-6-3775

Current through 2024 Act No. 225.

Section 12-6-3775 - [Repealed Effective 12/31/2024] Solar energy tax credits

(A) For the purposes of this section, "solar energy property" means any nonresidential solar energy equipment with a nameplate capacity of at least one thousand nine hundred kilowatts (1,900 kw AC) that uses solar radiation as a substitute for traditional energy for water heating, active space heating and cooling, passive heating, daylighting, generating electricity, distillation, desalination, detoxification, or the production of industrial or commercial process heat. The term also includes related devices necessary for collecting, storing, exchanging, conditioning, or converting solar energy to other useful forms of energy.

(B)

(1) A taxpayer is allowed an income tax credit equal to twenty-five percent of the cost, including the cost of installation, of a solar energy property if he constructs, purchases, or leases a solar energy property that is located in the State of South Carolina and if:

(a) the property is located on:

(i) the Environmental Protection Agency's National Priority List;

(ii) the Environmental Protection Agency's National Priority List Equivalent Sites;

(iii) a list of related removal actions, as certified by the Department of Health and Environmental Control;

(iv) land that is subject to a Voluntary Cleanup Contract with the Department of Health and Environmental Control as of December 31, 2017, or to corrective action under the Federal Resource Conservation and Recovery Act of 1976; or

(v) land that is owned by the Pinewood Site Custodial Trust; and

(b) he places it in service in this State during the taxable year.

(2) The credit is earned in the year in which the solar energy property is placed in service but must be taken in five equal annual installments, beginning within three years of the year in which the solar energy property is placed in service. Unused credit may be carried forward for five taxable years from the year that the credit was able to be taken. A lessor shall give a taxpayer who leases solar energy property from him a statement that describes the solar energy property and states the cost of the property upon request. A credit is not allowed pursuant to this section if the cost of the solar energy property is provided by public funds. For the purposes of this section, "public funds" does not include federal grants or tax credits.

(C) If the solar energy property with respect to which the credit was claimed is disposed of, taken out of service, or moved out of the State in a year in which the installment of a credit accrues, then the credit expires and the taxpayer may not take any remaining installments of the credit.

(D) A credit for each installation of solar energy property placed in service may not exceed five million dollars. The credit is allowed on a first come, first served basis, and the total amount of credits available to be taken, pursuant to the five equal annual installments, for all taxpayers in a taxable year, may not exceed two million five hundred thousand dollars in the aggregate.

(E) A taxpayer who claims any other state credit allowed with respect to solar energy property may not take the credit allowed in this section with respect to the same property. A taxpayer may not take the credit allowed in this section for solar energy property that the taxpayer leases from another unless the taxpayer obtains the lessor's written certification that the lessor will not claim a credit pursuant to this section with respect to the property.

(F) The department may promulgate regulations necessary to implement the provisions of this section.

(G) To the extent that the taxpayer is a partnership or a limited liability company taxed as a partnership, the credit, including any unused credit amount carried forward, may be passed through to the partners or members and may be allocated among any of its partners or members on an annual basis including, without limitation, an allocation of the entire credit or unused carryforward to any partner or member who was a member or partner at any time in the year in which the credit or unused carryforward is allocated. The allocation must be allowed without regard to any provision of the Internal Revenue Code or regulations promulgated pursuant thereto, that may be interpreted as contrary to the allocation including, without limitation, the treatment of the allocation as a disguised sale. This subsection only applies to credits earned for a solar energy property placed in service after 2019.

S.C. Code § 12-6-3775

Repealed by 2022 S.C. Acts, Act No. 237 (SB 901),s 7, eff. 12/31/2024.

Amended by 2022 S.C. Acts, Act No. 237 (SB 901),s 2, eff. 6/22/2022.

Added by 2022 S.C. Acts, Act No. 237 (SB 901),s 2, eff. 6/22/2022.

Repealed by 2019 S.C. Acts, Act No. 77 (HB 4133),s 4, eff. 12/31/2021.

Added by 2019 S.C. Acts, Act No. 77 (HB 4133),s 4, eff. 5/16/2019.

2019 Act No. 77, Sections 4.B, 5, provide as follows:

"B. Upon approval by the Governor, this SECTION takes effect in income tax years beginning after 2018. The provisions of this SECTION are repealed on December 31, 2021, except that if the credit allowed by Section 12-6-3775, as added by this SECTION, is earned before the repeal, then the provisions of Section 12-6-3775 continue to apply until the credits have been fully claimed.

"SECTION 5. This act takes effect upon approval by the Governor and first applies to credits earned and certificates issued, and the administration thereof, after 2018. Any credits earned and certificates issued, and the administration thereof, before 2019 must be claimed in accordance with the provisions of Section 12-6-3530 as it existed on December 31, 2018. However, any credits earned and certificates issued before 2019 must count toward the aggregate credit limit for all taxpayers in all calendar years set forth in Section 12-6-3530(B)."

2022 Act No. 237, Sections 1, 2.B, and 7 provide as follows:

"SECTION 1.A. Section 12-6-3775 as it existed on December 31, 2021, is reenacted retroactively, subject to the amendments contained in SECTION 2.

"B. This SECTION takes effect upon approval by the Governor and applies to income tax years beginning after 2021.

"C. Section 4 B. of Act 77 of 2019 is repealed."

"[SECTION 2.]B. This SECTION takes effect upon approval by the Governor and first applies to income tax years beginning after 2021."

"SECTION 7. (A) Except as otherwise provided, this act takes effect upon approval by the Governor.

"(B)(1) If a solar energy tax credit is earned and any portion taken pursuant to Section 12-6-3775 before 2022, then the provisions of Section 12-6-3775 as they existed on December 31, 2021, continue to apply to such credits until the credits have been fully claimed.

"(2) If a solar energy tax credit is earned pursuant to Section 12-6-3775 after 2021, but before the effective date of this act, then the reenacted provisions of Section 12-6-3775, as amended pursuant to SECTION 2, apply.

"(C) The provisions of Section 12-6-3775 are repealed on December 31, 2024, except that if the credit allowed by Section 12-6-3775 is earned before the repeal, then the provisions of Section 12-6-3775, as amended, continue to apply until the credits have been fully claimed."