Corporate Income Tax
South Carolina's positive business environment starts with its corporate income tax structure. Businesses located in South Carolina benefit from:
- 5% corporate income tax, among the lowest in the nation.
- Corporations engaged in multi-state operations are taxed only on the portion of income derived from doing business in South Carolina.
- The basis for South Carolina's gross corporate income and taxable corporate income is based primarily upon a corporation's federal gross income and taxable income.
Jobs Tax Credit
- Rewards new and expanding companies for creating jobs in South Carolina.
- 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.
- This credit is then used against your South Carolina corporate income tax liability.
- Unused credits can be carried forward for 15 years.
Jobs Development Credit
With the approval of the South Carolina Coordinating Council, qualified companies are provided funds to help offset the cost of locating or expanding a business facility in the state. Effectively, the credit uses the state withholding taxes of new employees to reimburse the company for eligible expenditures including:
- Utility upgrades
- Fixed transportation facilities
- Real estate (site or building improvements)
- Manufacturing pollution control equipment
- Approved training costs
- Employee relocation expenses for technology-intensive facilities, R&D and certain corporate headquarters
The Job Development Credit begins once the company meets the agreed-upon job and investment goals, and is generally available for 10 or 15 years, depending on the development status of the county in which the company is located.
Corporate Headquarters Credit
- South Carolina provides a generous credit against corporate income tax or corporate license fees to offset costs associated with establishing, relocating or expanding a corporate headquarters facility with at least 40 employees.
- The credit is equal to 20% of qualifying real property costs and direct construction or lease costs for the first five years of operation.
Investment Tax Credit
- One-time credit against a company’s corporate income tax of up to 2.5% of a company’s investment in new production machinery.
- Actual credit depends on applicable recovery period for property under the Internal Revenue Code.
- Unused credits may be carried forward for up to 10 years.