County Incentives
The
Greenville Area Development Corporation (GADC) was created by
Greenville County to act as the County’s agent for economic development.
As its agent, the GADC has the sole ability to negotiate property
tax-based incentives; however, final approval rests with Greenville
County Council.
Specifically, a company may take advantage of one of two potential incentive programs.
Depending on total investment, a company may qualify for either a
five-year abatement of a statutorily-set portion of property tax or, by
agreement with the county, a fee-in-lieu-of-tax arrangement. Other unique options can be considered given the project size.
Property Tax Abatement - Statutory
South Carolina provides a property tax abatement to new or existing companies making new capital investments in the state.
Purpose:
- Reduce tax burden when new assets are at their greatest value
Value:
- Approximately 20% - 25% tax reduction annually for 5 years on new capital investment
Requirements:
- Invest greater than $50,000 in new capital expenditures in one year
- Company
must be involved in manufacturing, research and development, corporate
headquarters, or distribution/warehouse facilities
- If other than manufacturer or R&D, must create at least 75 new jobs
- File tax return/PT-300 to SC Dept. of Revenue; deduction is automatic.
(See SC Department of Revenue website for more information: www.sctax.org)
Mechanics:
- The
abatement is given for 5 years – years 2 through 6 and is a waiver of
the county’s operating portion (55.9 mills) of property tax.
Property Tax: Value x Assessment Ratio x Millage
Tax Example: (assumes manufacturer & non-depreciable asset)
$10 Million investment x 10.5% assessment ratio x .2750 millage rate = $288,750 annual tax (before abatement)
Abatement Savings Example:
$10
Million investment x 10.5% assessment ratio x .0559 millage abatement =
$58,695 annual abatement savings or $293,475 over 5 years
So, taxes after the abatement in Year 1 would be $230,055.
Note:
Besides the abatement, SC provides the following property tax
exemptions - All inventories (raw materials, work-in-progress and
finished goods), all intangible property, and all pollution control
equipment.
Fee-in-Lieu of Property Tax - Negotiated
A company may negotiate with the Greenville Area Development Corporation a Fee-in-Lieu of Property Taxes (FILOT) agreement. FILOT agreements are subject to final approval by Greenville County Council.
Purpose:
-
Reward substantial investment by reducing tax burden over the long-term
Value:
-
Approximately 42% tax reduction annually for 20 years on new capital investment occurring in a 5-year investment window.
Requirements:
-
Company must be manufacturer, warehouse/distributor or an office/headquarters
-
Commit to significant new investment (greater than $10 Million over 5 years)
-
Project must be competitive with other locations
Mechanics:
-
May lower assessment ratio from 10.5% to as low as 6% on real and personal property for manufacturers
-
For
headquarters and corporate offices, the assessment ratio can be reduced
from 10.5% to as low as 6% on personal property (real property is
already assessed at 6%)
-
May
lock millage rate for 20 years or adjust it every 5 years; historical
millage increase has been 1.5% annually (School System)
-
Bond/Incentive attorney must prepare legal documents
-
8-week process with County Council
Industrial Revenue Bond – Negotiated
For
small manufacturers, the IRB is the lowest cost means to finance a new
operation or an expansion due to tax-exempt status of the bond (loan).
It can be used for the acquisition of land, the construction of
buildings, improvements to real property and the acquisition of new
machinery. Investment cannot exceed $20 million in expenditures 3+/- years.
State Incentives
Jobs Tax Credit - Statutory
The
Jobs Tax Credit is a valuable financial incentive that rewards new and
expanding companies for creating jobs in South Carolina. In order 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.
Purpose:
-
South Carolina rewards companies for job creation by reducing corporate income tax liability
Requirements and Corresponding Values:
- For
companies involved in manufacturing, processing, warehousing,
distribution, tourism, or be considered a corporate office facility
(HQs), bank or qualified technology intensive facility, increase annual
average monthly employment by 10 or more new full-time jobs.
Credit of $1500 annually for 5 years for each new job; $2500 when located in a Multi-County Business Park
- “Small
Business” - For companies involved in manufacturing, processing,
warehousing, distribution, tourism, or considered as a corporate office
facility (HQs), bank or qualified technology facility and employing
corporation-wide 99 or less employees, create 10 net new jobs as noted
III.a.1) above or increase annual average monthly employment by 2 or
more new full-time jobs.
Credit
of $1500 annually for 5 years for each new job with gross wages that
equal or exceed $19.50 per hour (120% of the state’s per capita of
$16.25/hr); $2500 when located in a Multi-County Business Park
or $750 annually for 5 years for each new job that pays less than $19.50; $1750 when located in a Multi-County Business Park
- Service-related
facilities are eligible but they must create 250 new full-time jobs
within 5 years (or the equivalent of 500 part-time jobs) OR meet one of
the following criteria:
Create 125 jobs with an average salary 1.5 times the State of South Carolina’s per capita income ($48,743); or
Create 75 jobs, with an average salary 2 times the State of South Carolina’s per capita income ($64,990); or
Create 30 jobs, with an average salary 2.5 times the State of South Carolina’s per capita income ($81,238).
If
meeting one of the above requirements, service-related companies are
also eligible for a credit of $1500 annually for 5 years for each new
job or $2500 per job when located in a Multi-County Business Park.
Mechanics:
-
Offsets corporate income tax liability up to 50% in a given year
-
Can carry forward unused credits for 15 years
- Credits are given each year for five years beginning with years 2 through 6
Example:
100 Employee Manufacturer to create 50 jobs
50 jobs x $1500 = $75,000 annual value
5 year value = $375,000
Corporate Headquarters Credits - Statutory
Income
tax credits to partially reimburse for real and personal property
expenditures associated with new Headquarters related jobs.
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