Tax Structure and Tax Incentives South Carolina's corporate income tax rate is 5%. Certain income is allocated while other income is apportioned. For most multi-state manufacturing operations the amount of income apportioned to South Carolina is determined by the Three-Factor Formula with Double Weighted Sales. Source: South Carolina Department of Revenue, Tax Incentives for Economic Development, 2006 Edition.

Corporate Income Tax Credits Job Tax Credits: South Carolina provides companies with a credit against their corporate income tax liability for new jobs created anywhere in the state. Credits range from $750 to $8,000 per job, depending on the number of jobs created, the type of business, the location, and the wage rate. Companies creating new jobs in facilities or sites designated as "multi-county industrial parks" receive an additional $1,000 credit per new job created. New jobs created in Horry County receive job tax credits of $1,250 to $2,500 per job. Credits may be used to offset up to 50% of the company's corporate tax liability and have a 15-year carry forward for unused credits. Companies must create a minimum of 2 new jobs to qualify. Corporate Headquarters Credits: Companies that meet specific job requirements in establishing a corporate or division headquarters in South Carolina are eligible for a credit equal to 20% of their lease cost for five years, OR 20% of the building design/construction costs. This credit may be used to eliminate the company's corporate income tax liability for up to 10 years. Investment Tax Credit: Companies locating or expanding in South Carolina counties designated as Economic Impact Zones can receive a credit against their corporate income tax liability of up to 5% of their investment in new production equipment. Horry County has this designation. This credit can be used without limits against corporate tax liability and may effectively eliminate it. Unused credits may be carried forward for ten years. Child Care Credit: Companies may also claim a credit to South Carolina corporate income tax, bank tax or premium tax for costs incurred in operating a child care program, or for providing child care benefits to employees. The credit can be claimed for payments made directly to licensed or registered independent child care facilities in the name of, and for the benefit of, and employee. The company may claim a credit equal to 50 percent of the child care payments incurred by the employer, up to $3,000 per participating employee. This credit may be "stacked" with other credits. Unused credits have a 10-year carry-forward. Source: South Carolina Department of Revenue, Tax Incentives for Economic Development, 2006 Edition.

Sales Tax Exemptions South Carolina levies a 5% sales tax statewide and its counties may levy an additional 1% to fund infrastructure projects or provide property tax relief. Horry County does not levy the additional 1%. However, manufacturers are provided with numerous exemptions that reduce both up-front and long-term operating costs. Exemptions include: Equipment used in the production process Electricity and fuels used in the production process Raw materials Repair parts Packaging materials Industries investing more that $35 million are eligible for an exemption on material handling equipment. Source: South Carolina Department of Revenue, Tax Incentives for Economic Development, 2006 Edition.

Property Tax Incentives Abatement: Companies locating in South Carolina with an investment of $50,000 or more receive an abatement of the county ordinary portion of their property taxes for a period of five years. In general, this will result in a savings of up between 25% and 30% on a company's property taxes. (Note: Companies continue to pay the portion of the property taxes which goes to local public schools.) Fee-in-Lieu: Companies investing $5 million or more in South Carolina in a five-year period may negotiate fee-in-lieu of property taxes with a county to obtain a reduced assessment and a lower than normal millage rate for a period of up to 20 years. Source: South Carolina Department of Revenue, Tax Incentives for Economic Development, 2006 Edition.