The cost of operating a business in South Carolina is reasonable compared to its Southeastern counterparts. With a pro-business climate and performance-based incentives, companies can keep their operating costs low.

The State's incentives are an investment in its economic future and South Carolina is willing to invest in companies who are willing to reinvest in the state.

South Carolina is proud to offer:

• No state property tax
• No local income tax
• No inventory tax
• No sales tax on manufacturing machinery, industrial power or materials for finished products
• No wholesale tax
• No unitary tax on worldwide profits
• Favorable corporate income tax structure

Property Valuation: The value of real and personal property used in manufacturing operations is established by the South Carolina Department of Revenue. If a company creates 75 or more jobs, invests a minimum of $50,000 and operates as a distribution facility, corporate headquarters, or corporate office, the South Carolina Department of Revenue establishes their real and personal property values. All other property values are the responsibility of county government.

Assessment Ratios: Assessment ratios are applied to the fair market value of real property vary by classification set forth by State law as follows:

Manufacturing and Utility companies (real & personal property)	10.5%
Residential real estate (owner-occupied)	4.0%
Commercial and residential nonowner-occupied real property	6.0%
Agricultural real property (private ownership)	4.0%
Agricultural real property (commercial ownership)	6.0%
All other personal property	10.5%

Industries investing as little as $2.5 million in Laurens County may negotiate for a Fee-in-Lieu-of Property Taxes or FILOT which will result in savings of about 40% property taxes otherwise due. A Corporation or partnership must make the minimum investment over a five-year period to qualify.

The assessment ratio can be negotiated down from 10.5% to 6%. The agreement can extend up to 30 years. The county and the fee payer may enter into a millage rate agreement, which would set the millage rate for the entire agreement period. Payment of the fee can be structured in any way acceptable to both the county and the fee payer.

The advantages to a company include:

• Savings Payments to local government are reduced significantly through negotiation of a lower assessment ratio and negotiation of an applicable millage rate.
• Planning Payments to local government can be stabilized for the term of the agreement.

The company will be required to obtain a bond attorney to complete a fee agreement. The agreement will require county council's approval on three readings of an ordinance and will require a public hearing.

Industrial Property Example Calc: Standard Taxes vs. FILOT --Year One
$50 Million Investment	Standard Taxes	Example FILOT
Fair Market Value or Property Assessment Ratio for Manufacturing	$50,000,000 x 10.5%	$50,000,000 x 6.0%
Assessed Value Millage Rate (Clinton, Laurens County)	$5,250,000 x .2795	$3,000,000 x .2795
Property Tax (one year) Mfg Abatement: ($5,250,000 x .0545=$286,125)	$1,467,375 - 286,125	$838,500 - 0
Property Tax After Abatement	$1,181,250
Property Tax After Fee-in-lieu		$ 838,500

Special Source Revenue Credit: The County may grant a SSRC to generate additional tax reductions to offset the cost of infrastructure, land and/or building. The SSRC is offered on a sliding scale based on the amount of the investment and is typically for ten (10) years.

If the company desires, a Special Source Revenue Bond may be purchased to provide up-front financing to offset initial costs. The SSRB stream is used to repay the bond.

The company will be required to obtain services of a Bond Attorney to draft an ordinance for the SSRC. The ordinance will require approval by County Council on three readings. It will also require a public hearing.

County Property Tax Abatements: New manufacturing facilities and additions costing at least $50,000 to existing manufacturing facilities is exempt from the ordinary county taxes for a period of five years.

This does not apply if Fee-in-Lieu-of Taxes (FILOT) agreement is executed with the county nor does it apply to school or municipal taxes. Apply to the Department of Revenue for exemption using Form PT-401.

Municipal Property Tax Abatements: Requirements are the same as for county abatements except the municipality, by ordinance, must specifically exempt the property from municipal property taxes.

Value: The result could be an approximate savings of 25 percent to 35 percent on annual property taxes for real and personal property.

Property and Tax Abatement Example:
$1 Million	Investment (land, building, and equipment)
x 10.5%	Assessment Ratio
$105,000	Assessed Value
x .200	Example millage rate
$21,000	Annual Tax
$1 Million	Investment (land, building, and equipment)
x 10.5%	Assessment Ratio
$105,000	Assessed Value
x .0535	Example millage rate
$5,617.50	Annual Abatement
The estimated annual property tax for one year: $21,000 - $6,699 = $14,301.

Discretionary Incentives

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 (CCED). To qualify, a company must meet certain business requirements and the amount a company receives depends on the company's pay structure, location and number of employees.

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 percent of a company's liability.

South Carolina's ReadySC Training Program is one of the most comprehensive and successful programs in the US. Its structure and content serve as a model for other state programs throughout the country.

The primary incentive for the investor is to obtain free technical training of persons employed as workers or supervisors. ReadySC works with the company to prepare manuals, interview and screen workers, and teach classes according to the technical requirements established by the company.

The company has no obligation to hire any workers completing the training. All costs to recruit, screen, and train workers are paid by the State. In some cases, the State will pay the cost to send first line supervisors or key personnel to the parent company, even when it involves training in a foreign company, to permit new employees to learn the technical skills and supervisory procedures of the investing company.

Visit the web site for more information on ReadySC.

This is a written agreement between two or more counties. It includes provisons addressing the development of the park, the sharing between the participating counties of the expenses and revenues relating to the park, and the manner in which such revenues must be distributed to each of the taxing entities within each of the participating counties.

The park area is exempt from property tax. The owners or leasees of any property situated in the park must pay an amount equivalent to the property taxes or other fee in lieu of payments (FILOT) that would have been due and payable.

Job Tax Credits for each job are increased by $1,000 if new or expanding facility is located in a Multi-County Industrial Park.

A multi-county park agreement is required in order for the county to approve a special source revenue credit. the company will be required to obtain a bond attorney to draw up an ordinance which will be presented to the county council for approval. The ordinance will require approval on three readers and will also require a public hearing.