Download This Version in Microsoft Word format
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, SO AS TO ENACT THE SOUTH CAROLINA ECONOMIC DEVELOPMENT INCENTIVE ACT, BY ADDING SECTION 12-6-3589 SO AS TO PROVIDE FOR A CREDIT AGAINST THE STATE CORPORATE INCOME TAX FOR COSTS INCURRED BY A MANUFACTURING FACILITY IN COMPLYING WITH WHOLE EFFLUENT TOXICITY TESTING, THE AMOUNT OF THE CREDIT AND A TEN-YEAR CARRY FORWARD PERIOD, AND TO DEFINE "MANUFACTURING FACILITY"; BY ADDING SECTION 12-36-2140 SO AS TO PROVIDE FOR AN EXEMPTION FOR A MANUFACTURING PROPERTY FROM THE STATE SALES TAX ON NATURAL GAS ONCE THE PRICE OF NATURAL GAS EXCEEDS $6.50 FOR A DECATHERM; TO AMEND SECTION 12-6-2250, RELATING TO APPORTIONMENT OF INCOME FOR CERTAIN BUSINESSES, SO AS TO PROVIDE FOR THE CALCULATION OF APPORTIONED INCOME USING SALES FIGURES; TO AMEND SECTION 12-6-3360, AS AMENDED, RELATING TO THE JOB TAX CREDIT, SO AS TO INCLUDE A BANK AS A TAXPAYER WHO MAY QUALIFY FOR THE CREDIT; TO AMEND SECTION 12-6-3375, RELATING TO A TAX CREDIT AGAINST INCOME TAX FOR COMPANIES USING THE STATE'S PORT FACILITIES, SO AS TO PROVIDE FOR THE ALLOCATION OF THE TOTAL AMOUNT OF THE CREDITS ANNUALLY; TO AMEND SECTION 12-6-3410, AS AMENDED, RELATING TO THE INCOME TAX CREDIT FOR CORPORATE HEADQUARTERS, SO AS TO INCLUDE A BANK'S HEADQUARTERS AND TO REDEFINE "COMPANY BUSINESS UNIT"; TO AMEND SECTION 12-10-80, AS AMENDED, RELATING TO THE JOB DEVELOPMENT TAX CREDIT, SO AS TO ALLOW FOR A REDUCTION AGAINST THE CREDIT FOR TAXES DUE AND TO INCLUDE CERTAIN EMPLOYEE RELOCATION EXPENSES AS QUALIFYING EXPENSES; TO AMEND SECTION 12-20-110, AS AMENDED, RELATING TO CERTAIN ENTITIES TO WHICH CORPORATION LICENSE FEES PROVISIONS DO NOT APPLY, SO AS TO INCLUDE A CERTIFIED COMMUNITY DEVELOPMENT ENTITY; TO AMEND SECTION 12-36-2120, AS AMENDED, RELATING TO EXEMPTION FROM THE STATE SALES TAX, SO AS TO EXEMPT CONSTRUCTION MATERIALS USED IN BUILDING A SINGLE MANUFACTURING AND DISTRIBUTION CENTER WITH CERTAIN MINIMUM INVESTMENTS; TO AMEND SECTIONS 12-44-130 AND 12-44-140, BOTH AS AMENDED, RELATING TO THE FEE IN LIEU OF PROPERTY TAXES, SO AS TO CORRECT A CROSS REFERENCE; TO AMEND SECTION 4-12-30, AS AMENDED, RELATING TO QUALIFICATION OF AN INDUCEMENT LEASE AGREEMENT FOR THE FEE IN LIEU OF PROPERTY TAXES, SO AS TO REDUCE THE MINIMUM INVESTMENT REQUIREMENT AND TO DELETE CERTAIN INVESTMENTS FROM A FOUR PERCENT MINIMUM ASSESSMENT RATIO; AND TO AMEND SECTION 4-29-67, AS AMENDED, RELATING TO THE FEE IN LIEU OF PROPERTY TAXES FOR INDUSTRIAL DEVELOPMENT PROJECTS, SO AS TO DELETE CERTAIN INVESTMENTS FROM A FOUR PERCENT MINIMUM ASSESSMENT RATIO AND TO REDUCE THE MINIMUM INVESTMENT REQUIREMENT.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. This act may be cited as the South Carolina Economic Development Incentive Act.
SECTION 2. Chapter 6 of Title 12 of the 1976 Code is amended by adding:
"Section 12-6-3589. (A) A manufacturing facility may claim a tax credit equal to twenty-five percent for costs it incurs in complying with whole effluent toxicity testing. The credit is allowed only against taxes imposed by Section 12-6-530. Unused credits may be carried forward for ten years.
(B) For purposes of this section, 'manufacturing facility' is as defined in Section 12-6-3360(M)(5)."
SECTION 3. Article 21, Chapter 36, Title 12 of the 1976 Code is amended by adding:
"Section 12-36-2140. Purchases of natural gas made by a manufacturing property including, but not limited to, distribution and warehouse space are exempt from the sales tax if natural gas prices equal or exceed $6.50 for each decatherm."
SECTION 4. Section 12-6-2250 of the 1976 Code is amended to read:
"Section 12-6-2250. A taxpayer whose principal business in this State is (a i) manufacturing or any form of collecting, buying, assembling, or processing goods and materials within this State, or (b ii) selling, distributing, or dealing in tangible personal property within this State, shall make returns and pay annually an income tax which that includes its income apportioned to this State. Its income apportioned to this State is determined by multiplying the net income remaining after allocation under pursuant to Sections 12-6-2220 and 12-6-2230 by a fraction, the numerator of which is the property ratio, plus the payroll ratio, plus twice the number of sales ratio made in South Carolina, and the denominator of which is four the total number of sales for the taxpayer. However, where the if a sales ratio does not exist, the denominator of the fraction is the number of existing ratios, and where the sales ratio exists but the payroll ratio or the property ratio does not exist, the denominator of the fraction is the number of existing ratios plus one. The property, payroll, and sales ratios must be determined in accordance with Sections 12-6-2260, 12-6-2270, and Section 12-6-2280, respectively."
SECTION 5. Section 12-6-3360(A) of the 1976 Code, as last amended by Act 332 of 2002, is further amended to read:
"(A) Taxpayers that operate manufacturing, tourism, processing, warehousing, distribution, research and development, corporate office, qualifying service-related facilities, and qualifying technology intensive facilities, and banks as defined pursuant to this title are allowed an annual job tax credit as provided in this section. In addition, taxpayers that operate retail facilities and service-related industries qualify for an annual jobs tax credit in counties designated as least developed or distressed. Credits under pursuant to this section may be claimed against income taxes imposed by Section 12-6-510 or 12-6-530, and insurance premium taxes imposed pursuant to Chapter 7 of Title 38, and are limited in use to fifty percent of the taxpayer's South Carolina income tax, or insurance premium tax liability. In computing any a tax payable by a taxpayer under pursuant to Section 38-7-90, the credit allowable under pursuant to this section must be treated as a premium tax paid under pursuant to Section 38-7-20."
SECTION 6. Section 12-6-3360(M)(1) of the 1976 Code is amended to read:
"(1) 'Taxpayer' means a sole proprietor, partnership, corporation of any classification, limited liability company, or association taxable as a business entity which that is subject to South Carolina taxes as contained in Sections 12-6-510 and 12-6-530, Chapter 11 of Title 12, and Chapter 7 of Title 38."
SECTION 7. Section 12-6-3375(G) of the 1976 Code, as added by Act 124 of 2005, is further amended to read:
"(G) The maximum amount of tax credits allowed to all qualifying taxpayers pursuant to this section may not exceed eight million dollars per for each calendar year. Tax credits allowed shall must be allocated based on the date an application is received by the Coordinating Council for Economic Development upon the fraction calculated by dividing the applicant's qualified credits by the total credits of all qualified applicants."
SECTION 8. Section 12-6-3410(A) of the 1976 Code is amended to read:
"(A) A corporation or bank establishing a corporate headquarters in this State, or expanding or adding to an existing corporate headquarters, is allowed a credit against any tax due pursuant to Section 12-6-530, or Section 12-20-50, or Chapter 11 of Title 12, as set forth in this section."
SECTION 9. Section 12-6-3410(J)(1) of the 1976 Code, as last amended by Act 89 of 2001, is further amended to read:
"(J) As used in this section:
(1) 'Corporate headquarters' means the facility or portion of a facility where corporate or bank staff employees are physically employed, and where the majority of the company's or company business unit's financial, personnel, legal, planning, information technology, or other headquarters-related functions are handled either on a regional, or national, or global basis. A corporate headquarters must be a regional corporate or bank headquarters, or a national corporate or bank headquarters, or global corporate or bank headquarters as defined below:
(a) National corporate or bank headquarters must be the sole corporate or bank headquarters in the nation and handle headquarters-related functions at least on a national basis. A national headquarters shall be deemed is considered to handle headquarters-related functions on a national basis from this State if the corporation has a facility in this State from which the corporation engages in interstate commerce by providing goods or services for customers outside of this State in return for compensation.
(b) Regional corporate or bank headquarters must be the sole corporate or bank headquarters within the region and must handle headquarters-related functions on a regional basis. For purposes of this section, 'region' or 'regional' means a geographic area comprised of either:
(i) at least five states, including this State; or
(ii) two or more states, including this State, if the entire business operations of the corporation or bank are performed within fewer than five states.
(c) A 'company business unit' is an organizational unit of a corporation or bank and is defined by the particular product or category of products it sells."
SECTION 10. Section 12-10-80(A)(2) of the 1976 Code, as last amended by Act 89 of 2001, is further amended to read:
"(2) A business that is current with respect to its withholding tax and other tax due and owing the State and that has maintained its minimum employment and investment levels identified in the revitalization agreement may claim the credit on a quarterly basis beginning with the first quarter after the council's certification to the department that the minimum employment and capital investment levels were met for the entire quarter. If a qualifying business is not current as to all taxes due and owing to the State as of the date of the return on which the credit would be claimed, without regard to extensions, the business is barred from claiming the credit that would otherwise be allowed for that quarter may claim the credit only in an amount reduced by the amount of taxes due and owing to the State as of the date of the return on which the credit is claimed."
SECTION 11. Section 12-10-80(C)(1)(f) of the 1976 Code, as last amended by Act 89 of 2001, is further amended to read:
"(f) employee relocation expenses associated with new or expanded technology intensive facilities as defined in Section 12-6-3360(M)(14) or relocation expenses associated with new national, regional, or global corporate headquarters as defined in Section 12-6-3410(J)(1)(a) that qualify for the enhanced corporate income tax credit under pursuant to Section 12-6-3410(D) or relocation expenses associated with an expanded research and development facility to include personnel and laboratory research and development equipment;"
SECTION 12. Section 12-20-110 of the 1976 Code, as last amended by Act 89 of 2001, is further amended by adding at the end:
"(8) a community development entity certified by the United States Department of the Treasury through the Community Development Financial Institution Fund as a company established to distribute allocations received as a part of the New Market Tax Credit Program."
SECTION 13. Section 12-36-2120 of the 1976 Code, as last amended by Act 164 of 2005, is amended by adding an appropriately numbered item at the end:
"( ) construction materials used in the construction of a single manufacturing and distribution facility with a capital investment of at least one hundred million in real property in the State over an eighteen-month period. The taxpayer must provide notice of the exemption, and the Department of Revenue may assess taxes owing in the manner provided in Section 12-36-2120(51)."
SECTION 14. Section 12-44-130(A) of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"(A) Except as otherwise provided in Section 12-44-30(18), to be eligible for the fee, a sponsor and each sponsor affiliate must invest the minimum investment as defined in Section 12-44-30(14). For an enhanced investment pursuant to Section 12-44-30(87), a single sponsor must make the investment, unless otherwise provided in that section. The county and the sponsors who are part of the fee agreement may agree that investments by other sponsor affiliates within the investment period qualify for the fee regardless of whether the sponsor affiliate was part of the fee agreement, except that each new sponsor affiliate must invest at least the minimum investment or the enhanced investment if applicable in the project, unless the project is a manufacturing, research and development corporate office, or distribution facility as provided in Section 12-44-30(18). To qualify for the fee, the sponsor affiliates must be approved specifically by the county and must agree to be bound by agreements with the county relating to the fee. These sponsor affiliates are not bound by agreements, or portions of agreements, to the extent the agreements do not affect the county. The investments pursuant to this subsection must be at the sponsor's project. The fee agreement may provide for a process for approval of sponsor affiliates."
SECTION 15. Section 12-44-140(B) and (C) of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"(B) Except as provided in Section 12-44-100(A), a fee agreement is automatically terminated if the sponsor fails to satisfy the minimum investment level provided in Section 12-44-30(14) within the investment period or the applicable minimum investment or job creation requirements provided in Section 12-44-30(87). If the fee agreement is terminated under this subsection, all economic development property is subject, as of the commencement date, to ad valorem property taxation as imposed by law. At the time of termination, the sponsor shall pay to the county an additional fee equal to the difference between the total amount of property taxes that would have been paid by the sponsor had the project been taxable, taking into account exemptions from property taxes that would have been available to the sponsor, and the total amount of fee payments actually made by the sponsor. This additional amount is subject to interest as provided in Section 12-54-25.
(C) If at any time a sponsor or sponsor affiliate no longer has the minimum level of investment as provided in Section 12-44-30(14), without regard to depreciation, that sponsor or sponsor affiliate no longer qualifies for the fee. If the sponsor qualifies for the enhanced investment, the sponsor must maintain the applicable level of investment, without regard to depreciation. If the sponsor fails to maintain the applicable level of investment in Section 12-44-30(87), it no longer qualifies for the fee unless the provisions of Section 12-44-100 apply."
SECTION 16. Section 4-12-30(B)(3) of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"(3) The minimum level of investment in the project must be at least five two and one-half million dollars and must be invested within the time period provided in subsection (C)(2). If a county has an average annual unemployment rate of at least twice the state average during the last twenty-four months based on data available on the most recent November first, the minimum level of investment is one million dollars. The department shall designate these reduced investment counties by December thirty-first of each year using data from the South Carolina Employment Security Commission and the United States Department of Commerce. The designations are effective for a sponsor whose inducement agreement is signed in the calendar year following the county designation. Investments may include amounts expended by a sponsor as a nonresponsible party in a voluntary cleanup contract on the property at a project pursuant to Article 7, Chapter 56 of Title 44, the Brownfields Voluntary Cleanup Program, if the Department of Health and Environmental Control has issued a certificate of completion for the cleanup. If the amounts, under the Brownfields Voluntary Cleanup Program, equal at least one million dollars, the investment threshold requirement of this chapter is deemed to have been met."
SECTION 17. Section 4-12-30(H)(3) of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"(3) An inducement agreement or a lease agreement may provide that a sponsor who has committed to an investment under subsection (D)(4) may continue to receive the benefits of this chapter even if the sponsor fails to make or maintain the required investment or fails to create the jobs required by subsection (D)(4), if the sponsor meets the five two and one-half million dollar minimum investment. If the sponsor fails to make or maintain the required investment or create the required number of jobs, the inducement agreement or the lease agreement may not provide for an assessment ratio and an exemption period more favorable than those allowed for the minimum investment. To the extent that the sponsor obtained a four percent assessment ratio under subsection (D)(4), the sponsor must recalculate the fee using a six percent ratio or such other ratio as the inducement agreement or lease agreement may provide for all years in which the four percent assessment ratio was used and pay the county any difference. This difference is subject to interest as provided in Section 12-54-25."
SECTION 18. Section 4-12-30(D)(4)(a) of the 1976 Code, as last amended by Act 161 of 2005, is further amended to read:
"(4)(a) The assessment ratio may not be lower than four percent:
(i) in the case of a single sponsor investing at least two one hundred fifty million dollars, resulting in a total investment of at least four three hundred million dollars when added to previous investments by a sponsor, and creating at least two twenty-five hundred new full-time jobs at a project;
(ii) in the case of a single sponsor investing at least four hundred million dollars and which is creating at least two hundred new full-time jobs at a project;
(iii) in the case of a single sponsor investing at least six hundred million dollars in this State;
(iv) (ii) in the case of a business including a corporation, its subsidiaries, and its limited liability company members, that: A. builds a project consisting of gas-fired combined-cycle power facility and invests at least four hundred million dollars and creates at least twenty-five full-time jobs as defined in Section 12-6-3360(M) at that project; and
B. invests an additional five hundred million dollars in this State; or
(v) (iii) in the case of a project that satisfies the requirements of Section 11-41-30(2)(a), and for which the Secretary of Commerce has delivered certification pursuant to Section 11-41-70(2)(a)."
SECTION 19. Section 4-29-67(D)(4)(a) of the 1976 Code, as last amended by Act 161 of 2005, is further amended to read:
"(a) The assessment ratio may not be lower than four percent:
(i) in the case of a single sponsor investing at least two one hundred fifty million dollars, resulting in a total investment of at least four three hundred million dollars when added to previous investments by a sponsor, and which is creating at least two twenty-five hundred new full-time jobs at the project;
(ii) in the case of a single sponsor investing at least four hundred million dollars and which is creating at least two hundred new full-time jobs at the project;
(iii) in the case of a single sponsor which is investing at least six hundred million dollars in this State;
(iv)(ii) in the case of a business including a corporation, its subsidiaries, and its limited liability company members, that: A. builds a project consisting of gas-fired combined-cycle power facility and invests at least four hundred million dollars and creates at least twenty-five full-time jobs as defined in Section 12-6-3360(M) at that project; and
B. invests an additional five hundred million dollars in this State; or
(v)(iii) in the case of a project that satisfies the requirements of Section 11-41-30(2)(a), and for which the Secretary of Commerce has delivered certification pursuant to Section 11-41-70(2)(a)."
SECTION 20. This act takes effect upon approval by the Governor.
This web page was last updated on Tuesday, June 23, 2009 at 2:43 P.M.