Clarendon County is designated as a Tier 1 County, which means that companies can obtain highest degree of incentives available to new or existing companies in the State of South Carolina.The Clarendon County Development Board will work with you to provide you with free workforce training and other incentives that will enable your company to maximize profits and enhance its operations in a worker-friendly environment.The following is a summary of the incentive packages that may be available to your company. The Clarendon County Development Board can provide you with a detailed incentive summary for your project once the following is known:

We stand ready to assist you with any questions concerning our tax structure and incentive opportunities.

Providing Your Company a Strategic Operating Advantage
Businesses like your company benefit from our probusiness environment. South Carolina understands that industry, not the government, invests capital and creates jobs. The state created and maintains a business climate that fosters prosperity and expansion.The fact is our probusiness attitude is epitomized not only by our stable business tax structure and capital resources, but also by an unparalleled list of performance-based tax credits and investment incentives in fact, South Carolina has one of the highest economic growth rates in the Southeast, as well as the nation. During the past decade, South Carolina has provided our corporate citizens with substantial business advantages:

Corporate Income Tax Credits

Exemptions & Incentives Offset Taxes

Exemptions From Sales Tax

Corporate Income Taxes: The Lowest in the Southeast Your company’s state corporate income tax is based primarily on federal gross and taxable income. Companies engaged in multi-state activities will only pay taxes on the income derived from business activity conducted in South Carolina. South Carolina has the lowest corporate income tax rate in the Southeast at 5%.

Calculating Corporate Income: The First Step in Lowering Tax Liability
The first step to maintaining low corporate income tax liabilities is the state’s formula for calculating corporate income. your company’s annual corporate income is based on the following:

Corporate Franchise Tax and Licensing Fee
All companies must pay an annual corporate franchise tax. The rate is one mill ($0.001) per dollar of a proportion of total paid-in-capital and paid-in-surplus (earned surplus is not included), plus an annual $15 license fee. For multi-state corporations, the license fee is determined by apportionment in the same manner employed in computing apportioned corporate income.

Corporate Income Tax Credits
South Carolina maintains a number of aggressive and valuable credits that are specifically designed to lower your company’s corporate income tax liabilities.

Jobs Tax Credits: A Reward for Job Creation
By creating new jobs in Clarendon County, your company is eligible for a tax credit against annual corporate income tax liability.The value of these credits is $8,000 per job annually for a five-year period. If Clarendon County agrees to designate your site as a "multi-county industrial park," this designation allows your company to take advantage of an additional $1,000 per net new job -- meaning, Jobs Tax Credits of $9,000 are available. The credit is available for a five-year period beginning with Year 2 (Year 1 is used to establish the created job levels). Credits can be used to offset your annual state corporate income tax liability by up to 50 percent. Unused credits can be carried forward for up to 15 years. To be eligible for Jobs Tax Credits, your company must create an average of 10 net new jobs at the facility in one year.

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 percent credit based on the value 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 to 50 percent of the company’s income tax liability and can potentially eliminate corporate income taxes for as long as 10 years from the year earned.

Enhanced Credit for Corporate Headquarters
In addition to the standard headquarters credit, there is an enhanced corporate headquarters credit to offset personal property costs. This credit is for 20 percent of the tangible personal property costs of establishing the headquarters (15-year carry-forward). Like the standard credit, these credits are not limited to 50 percent of the company’s income tax liability and can potentially eliminate corporate income taxes.

To qualify for this credit, your company must meet the criteria for the standard HQ credit, and the tangible personal property must meet the following requirements:

Child Care Tax Credits
South Carolina was one of the first states to recognize the changing demographics in the labor market. This state has taken a national leadership role in offering businesses a credit for childcare expenses that can be applied to state corporate income tax. Companies may claim credits for capital costs and operating costs associated with establishing and/or operating a child care program or facility. The maximum credit claimed might equal the following:

These credits are limited to 50 percent of the company’s income tax liability and have a carry-forward period of 10 years. When used in combination with other credits, such as the Jobs Tax Credit, the child-care credit can lower your company’s effective corporate income tax rate to 1.25 percent.

Tax Credit for Research and Development Activities
In order to reward companies for increasing research and development activities in a taxable year, South Carolina offers a credit equal to 5 percent of the taxpayer’s qualified expenditures for research and development made in the state.The credit taken in any one taxable year may not exceed 50 percent 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.

Local Property Taxes
your company’s property taxes are only levied by the local (county and/or city) government. Unlike some states, South Carolina exempts all inventories (raw materials, work-in-progress, and finished goods), all intangible property, and pollution control equipment from property taxation. Three factors are used to determine property taxes:

Clarendon County’s Ability to Offset Property Tax Liability
To offset property tax liabilities, your company may take advantage of one of two potential incentive programs. Depending upon your total investment, your company may qualify for either a five-year abatement of a portion of property tax or by agreement of Clarendon County, a fee-in-lieu of property taxes.

Five-Year Property Tax Abatement
South Carolina law mandates a five-year abatement of the county’s operating portion of the millage rate. Generally, this portion makes up about 25 percent to 35 percent of the local millage rate. Since your company is investing more than $50,000, you are eligible for this abatement. The advantage of this incentive is that for the first five years — the crucial time for a new operation — your company can substantially reduce local tax liability.However, if your company is investing more than $5 million, you are eligible for a second incentive that offers greater savings above that of the Five-Year Abatement. This incentive, called a Fee-in-Lieu of Property Tax (FILOT), replaces the Abatement and is offered at the discretion of Clarendon County.

Fee-in-Lieu of Property Tax
South Carolina law allows Clarendon County to enter into a negotiated agreement for a Fee-in-Lieu of local property taxes with your company if total capital investment is $5 million or greater. The long-term savings of the Fee-in-Lieu is based on the actual investment (both real and personal property), and is dependent on both the assessment and millage rates negotiated with Clarendon County.

This incentive may result in substantial benefits for your company:

Sales Taxes and Tax Exemptions
South Carolina’s corporate citizens pay one of the lowest sales and use tax rates at 5 percent.

Sales Tax Exemptions
In addition to maintaining a low sales tax rate, South Carolina offers a number of exemptions that reduce both upfront costs and recurring costs on equipment. The following sales tax exemptions are comprehensive and generous:

Sales Tax Caps
In addition to the sales tax exemptions, South Carolina further reduces your company’s tax burden by providing valuable sales tax caps on specific items: a maximum sales tax of $300 on the sale or lease of automobiles, trucks, boats, and aircraft.

Enterprise Program Job Development Credit
As a manufacturer, your company is qualified to apply for the Job Development Credit. The credit is a unique incentive that allows South Carolina to assist your company in significantly reducing, or in some cases completely offsetting, certain approved capital expenditures over a 10-year period. Unlike tax credits or exemptions, this incentive is credited quarterly as a direct cash contribution. your company can only expect to collect Job Development Credits from employees earning an hourly wage equal to or more than that of Clarendon County. If approved, your company may be reimbursed for portions of the following types of expenditures (please note if approved, only those eligible expenditures that occur within 60 days of the application submittal will be considered for reimbursement by the Council):

To be qualified to apply, your company must submit an Application for Qualification for Enterprise Program Incentives to the South Carolina Coordinating Council for Economic Development. your company must create at least 10 net new full-time jobs or equivalents with a benefits package that includes health care. Only qualifying capital investments made within five years after the application has been approved (and any similar investments made sixty days prior to approval) can be considered for reimbursement. Please note there is a $4,000 processing fee included in the application process and a $500 annual renewal fee.Please note that your company has 18 months from the date of approval by the Coordinating Council to finalize the Revitalization Agreement and the amount of Job Development Credits cannot exceed the amount of eligible expenditures approved.The Revitalization Agreement establishes your company’s investment and employment commitments used to claim the credit, sets the project’s investment and employment completion date (must be within five years of the date of the agreement), and identifies eligible expenditures. Once your company has met the investment and job creation criteria outlined in the Revitalization Agreement, your company would be able to begin collecting Job Development Credits.

The total amount of Job Development Credits your company will receive depends on three criteria: