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Taxes & Incentives

As a business owner or a prospective business owner, your tax obligations consist of state, county and town taxes. The State of South Carolina administers corporate income and sales/use taxes, Beaufort County and the Town of Bluffton levy a property tax.

Each governmental entity has different plans to reward businesses which contribute economic growth, develop property and/or expand the region’s workforce.

South Carolina incentive legislation provides the ability for state agencies to give incentives to both new and existing businesses as they create new jobs or commit new investments to the state. South Carolina offers numerous statutory and discretionary incentives. See below for detailed information.

Government incentives are one of two forms: either they are statutory, meaning if requirements are met, one would automatically qualify; or negotiated, meaning they are offered at the discretion of the appropriate government agency. In general, statutory incentives are fiscal, year-end oriented; negotiated incentives are often time-sensitive and, in some cases, have a set look-back period to capture eligible expenditures.

South Carolina Tax Structure

Property Tax

In South Carolina, only local governments may levy property taxes. A company’s property tax liability is a function of:

  • Property Value x Assessment Ratio x Millage.

To determine Fair Market Value, real property is appraised, while tangible personal property is recorded at cost and then depreciated based on a statutory depreciation rate (for manufacturers) and income tax depreciation (for other businesses). The Fair Market Value is then assessed at rates established in the South Carolina Constitution. The local millage rate is applied to the assessed value to determine the property taxes. Millage rates in South Carolina are site specific and set annually by local government. A mill is equal to $0.001.

Property Tax Exemptions may include inventories (raw materials, work-in-progress, finished goods), intangibles (stocks, dividends, interest) and pollution control equipment. A partial Property Tax Exemption, called an abatement, may be made available to manufacturing, research and development, corporate headquarters, office and distribution facilities meeting certain requirements. Companies may also be able to negotiate a Fee-in-Lieu (FILOT) of property taxes, which can greatly reduce their property tax liability. This property tax incentive is offered at the discretion of local governments. Companies investing as little as $2.5 million dollars may negotiate this exemption with the county in which they locate. This 20-year incentive creates significant savings for companies by lowering the assessment ratio from 10.5% for manufacturers to as low as 6%. Furthermore, the millage may be held lower than if the property were not under a FILOT.

Corporate Tax

At 5%, South Carolina’s Corporate Income Tax Rate is among the lowest in the Southeast. The state uses a single factor sales formula for apportioning income.
Many companies qualify for a Job Tax Credit, which eliminates up to 50% of a company's corporate income tax liability for a specified number of years. The Corporate License Tax Rate is $1 for each $1,000 of capital stock and paid-in or capital surplus, plus a $15 annual fee.

Sales Tax

South Carolina’s sales and use tax rate is 6%. Counties, by approval of a majority of county voters, may assess an additional 1-2% local option sales tax. Proceeds go towards infrastructure improvements or a rollback of property taxes. A variety of sales tax exemptions for companies is offered.

For additional information regarding the South Carolina taxes, contact the South Carolina Department of Revenue.

Source: South Carolina Department of Commerce

Town of Bluffton & Beaufort County Tax Structure

Property subject to ad valorem tax includes real property, personal property used in business, and certain other personal property such as motor vehicles, boats and airplanes. Property taxes are generally assessed and collected by local governments, but the South Carolina Department of Revenue (the Department) assesses and collects some property taxes and oversees all property tax assessments to ensure equitable and uniform assessment throughout the state. There is no state or local tax on intangible personal property or inventories.

The assessment ratios are established for each class of property in the State Constitution to ensure stability. The fair market value is multiplied by the assessment ratio to produce the “assessed value” of a particular piece of property. Taxes are levied based on this assessed value as follows:

Property Type
Assessment Ratio
 Primary Residence
4.0%
 Agricultural (Private)
4.0%
 Agricultural (Corporate)
6.0%
 Other Real Property
6.0%
 Motor Vehicles
6.0%
 Other Personal
10.5%
 Manufacturing
10.5%
 Utility
10.5%
 Business Personal
10.5%
 Motor Carrier
9.5%

The Town of Bluffton and Beaufort County determines its tax rate annually by dividing the cost of its budget by the total assessed value of property in the county. The resulting figure is a fraction expressed in thousandths that is commonly referred to as the millage rate. Generally, the County and the Town may increase the millage rate year over year only to reflect changes in the resident population of the county or in the Consumer Price Index (CPI) for the preceding twelve months. However, the County or Town may levy an additional millage for certain purposes identified in South Carolina law. The Town of Bluffton and Beaufort County currently levies a tax on the following mills on the dollar of assessed value of property within the County and the Town as follows:

Description
Millage
 County Operations
48.77
 Purchase of Real Property Program
4.90
 County Debt Service
5.48
 School Operations
103.5
 School Bond Debt Service (Principal and Interest)
31.71
 Bluffton Fire Operations
24.02
Bluffton Fire Debt
1.22
 Town of Bluffton General Fund
40.00
 Town of Bluffton Debt Service
4.35

To determine an estimate of The Town of Bluffton and Beaufort County ad valorem taxes the following equation is utilized:

  • Property Value x Assessment Ratio x Millage

South Carolina Statutory Incentives

Job Tax Credit

The Job Tax Credit (JTC) is a statutory incentive offered to companies, both existing and new, that create new jobs in the state. The credit is available to companies that establish or expand corporate headquarters, manufacturing, distribution, processing, qualified service-related, research and development facilities. This credit is extremely beneficial for companies, because it is a credit against corporate income taxes, which can eliminate 50% of a company's liability.

Economic Impact Zone Investment Credit

South Carolina allows manufacturers locating in Economic Impact Zone (EIZ) counties a one-time credit against a company’s corporate income tax of up to 5% of a company’s investment in new production equipment. The actual value of the credit depends on the applicable recovery period for property under the Internal Revenue Code.

Corporate Headquarters Credit

In an effort to offset the cost associated with relocating or expanding a corporate headquarters facility, South Carolina provides a generous 20% credit based on the cost of the actual portion of the facility dedicated to the headquarters operation or direct lease costs for the first five years of operation. The credit can be applied against either corporate income tax or the license fee. These credits are not limited in their ability to eliminate corporate income taxes and can potentially eliminate corporate income taxes for as long as 10 years from the year earned. Eligibility for this credit is determined by meeting a number of specific criteria.

Research and Development Tax Credit

In order to reward companies for increasing research and development activities in a taxable year, South Carolina offers a credit equal to 5% of the taxpayer’s qualified research expenses in the state. The term “qualified research expenses” is defined in Section 41 of the Internal Revenue Code. The credit taken in any one taxable year may not exceed 50% of the company’s remaining tax liability after all other credits have been applied. Any unused portion of the credit can be carried forward for 10 years from the date of the qualified expenditure.

Source: South Carolina Department of Commerce

South Carolina Discretionary Incentives

Job Development Credit

A Job Development Credit (JDC) is a discretionary, performance-based incentive that rebates a portion of new employees' withholding taxes that can be used to address the specific needs of individual companies. JDCs are approved on a case-by-case basis by the S.C. Coordinating Council for Economic Development. To qualify, a company must meet certain business requirements and the amount a company receives depends on the company's pay structure and location.

Economic Development Set-Aside Program

The Economic Development Set-Aside Program assists companies in locating or expanding in South Carolina through road or site improvements and other costs related to business location or expansion. Overseen by the Coordinating Council for Economic Development, it is the Council’s primary business development tool for assisting local governments with road, water/sewer infrastructure, or site improvements related to business location or expansion.

Enterprise Zone Retraining Credit Program

The Enterprise Zone Retraining Credit Program helps existing industries maintain their competitive edge and retain their existing workforce by allowing them to claim a Retraining Credit for existing production employees. If approved for the Enterprise Zone Retraining Credit, companies can reimburse themselves up to 50% of approved training costs for eligible production workers (not to exceed $500 per person per year). This program is also overseen by the Coordinating Council for Economic Development.

Rural Infrastructure Fund

The Rural Infrastructure Fund (RIF) assists qualified counties in the state's rural areas by providing financial assistance for infrastructure and other activities that enhance economic growth and development. It can be used for job creation and/or product development. Qualified counties are designated as “Tier III” or “Tier IV” by the Department of Revenue and have received approval for an economic development strategic plan by the Coordinating Council for Economic Development.

Port Volume Increase Credit

South Carolina provides a possible credit against income taxes or withholding taxes to entities that use state port facilities and increase base port cargo volume by 5% over base-year totals. To qualify, a company must have 75 net tons of non-containerized cargo or 10 loaded TEUs transported through a South Carolina port for their base year.

The Coordinating Council has the sole discretion in determining eligibility for the credit and the amount and type of credit that a company may receive. The total amount of tax credits allowed to all qualifying companies is limited to $8 million per calendar year. A company must submit an application to the Coordinating Council to determine its qualification for, and the amount and type of, any tax credit it will receive.

Tourism Infrastructure Development Grants

The Tourism Infrastructure Development Grant supports new or expanding tourism or recreation facilities or designated development areas primarily through infrastructure projects. This program is generated from a share of the state admissions tax on qualified tourism and recreation establishments and is overseen by the Coordinating Council for Economic Development.

The Coordinating Council for Economic Development

The Coordinating Council for Economic Development, established in 1986 by the General Assembly, was formed in response to a general need for improved coordination of economic development efforts by those state agencies involved in the recruitment of new business and the expansion of current enterprises throughout the state. The Council consists of the heads or board chairs of 11 state agencies concerned with economic development: S.C. Department of Commerce, State Ports Authority, S.C. Department of Parks, Recreation & Tourism, S.C. Department of Agriculture, S.C. Technical College System, S.C. Research Authority, S.C. Department of Employment and Workforce, S.C. Department of Revenue, Jobs for Economic Development Authority, S.C. Department of Transportation and Santee Cooper.

Source: South Carolina Department of Commerce

Town of Bluffton Incentives

Buckwalter Place Multi-County Business/Industrial Park (MCIP)

The Town of Bluffton may offer incentives to qualified business that create primary, high quality jobs within the Buckwalter Place MCIP such as:

  • Construction of Public Infrastructure to serve the Site;
  • Reduction of land acquisition costs.
Business License Abatement

The Town of Bluffton offers Business License Abatement to all businesses whose annual gross receipts exceed a cap of $25,000,000 (Twenty-Five Million Dollars). As a result, the annual gross receipts in excess of the cap are exempt from the business license fees.

Business License Incentive Program

The Town of Bluffton Business License Incentive Program offers qualified businesses that create and sustain new jobs within Bluffton a three year abatement of business license as follows:

  • Year 1: One Hundred percent (100%) for the first taxable year of operation or any portion thereof;
  • Year 2: Sixty percent (60%) for the second taxable year of operation; and
  • Year 3: Thirty-Three percent (33%) for the third taxable year of operation.

For more information regarding qualifying businesses, please refer to Town of Bluffton Ordinance 2010-14.

Sustainable Development Incentives

The Town of Bluffton offers Sustainable Development Incentives for qualifying development and redevelopment projects demonstrating Sustainable Neighborhood Design, achieving LEED Certification for Sustainable Building Design, providing Workforce/Affordable Housing, and/or utilizing Development Agreement Transfer of Development Rights. Qualifying projects may be eligible for the rebate of a portion of application and development agreement fees paid, such as:

  • Master Plan Application;
  • Development Plan Application;
  • Subdivision Plan Application;
  • Development Agreement Application;
  • Building Permit Application;
  • Development Agreement Fees:
  • Interim Development Agreement Fee; and/or
  • Development Agreement Boat Ramp Repair Fund Fee.

For more information regarding Sustainable Development Incentives, please refer to the Town of Bluffton’s Unified Development Ordinance Article 6.

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