Credit Against License Fee for Infrastructure

South Carolina Department of Revenue

Program Type:

Tax Incentive

Eligible Geography:

South Carolina

Summary:

South Carolina Code §12-20-105 allows a taxpayer subject to the license fee imposed on South Carolina property and gross receipts under South Carolina Code §12-20-100, such as a power company, water company, gas company, or telephone company, a credit against its license fee liability for 100% of the amount paid in cash for infrastructure for an eligible project of another taxpayer. A taxpayer is not allowed a credit for actual expenses it incurs in the construction and operation of any building or infrastructure it owns, leases, manages, or operates.

The maximum credit that may be earned in any tax year by a taxpayer is $400,000; however, the credit cannot reduce the license fee liability of the taxpayer below zero. Any unused credit can be carried forward to the next succeeding year. A company that claims this credit may not claim the credit for infrastructure construction in South Carolina Code §12-6-3420 (discussed above in Section 17).

Eligible Recipients:

For-Profit Business; Non-Profit Organization

Eligible Recipients Detail:

Taxpayer subject to the license fee imposed on South Carolina property and gross receipts under South Carolina Code §12-20-100, such as a power company, water company, gas company, or telephone company

Eligible Purpose:

Last Mile Connectivity; Middle Mile Connectivity; Building Connectivity

Eligible Purpose Detail:

To be considered an eligible project, the project must qualify for income tax credits and withholding tax credits (job development or retraining benefits), income tax credits (economic impact zone investment tax credit), or fee in lieu of property taxes (Little Fee, Big Fee, or Simplified Fee).

Alternatively, if a project is located in an office, business, commercial, or industrial park, or combination of these, is used exclusively for economic development and is owned or constructed by a county, political subdivision or agency of this State when the qualifying improvements are paid for, the project does not have to meet the above requirements in order to be considered an eligible project. For a county that collects at least $5 million in accommodations tax in a single fiscal year, a multi-use sports and recreation complex owned by a county or municipality qualifies as an eligible project.

The statute defines the term “infrastructure” as improvements for water, wastewater, hydrogen fuel, sewer, gas, steam, electric energy, and communications services made to a building or land that are considered necessary, suitable, or useful to an eligible project. These improvements include, but are not limited to: Improvements to either public or private electric, natural gas, and telecommunications systems including, but not limited to, ones owned or leased by an electric cooperative, electrical utility, or electric supplier as defined by Chapter 27, Title 58.