Key insights
- South Carolina recently changed some rules for its job development, retraining, and corporate headquarters income tax credits.
- Most of the changes largely expand the rules, allowing more businesses to qualify.
- Remote employees can now count as new employees for the job creation credits.
South Carolina expands business tax credits. See if you qualify.
Some popular South Carolina business tax credits got a recent update, largely expanding the rules and allowing more businesses to qualify.
The changes impact the job development, retraining, and corporate headquarters income tax credits. Explore what has changed and how you might take advantage.
South Carolina business tax credit changes
Corporate headquarters income tax credit
The corporate headquarters income tax credit provides an income tax credit of up to 20% of the qualifying costs of establishing or expanding a headquarters. Recent changes to the credit include:
- Allowing taxpayers of any filing status to claim the credit
- Amending the definition of “headquarters” to clarify it doesn’t include a taxpayer’s business unit doing business solely within South Carolina
- Amending the definition of “national headquarters” to tighten the definition to mean “to plan, direct, and control all aspects of taxpayer’s business unit’s operation, and it has final authority over regional offices”
- Clarifying that the required 40 new jobs must be offered pay twice the per capita income of South Carolina based on the most recently available reports (2021 per capita — $32,823) and certain health benefits
- Including remote workers subject to South Carolina withholding in new job numbers
Job development credit
The job development credit effectively uses the personal withholding taxes of new South Carolina employees to reimburse qualified, approved companies adding value to South Carolina and the community where they locate.
The changes now allow for a company to include remote employees for credits for new jobs. A remote employee is now defined as a full-time employee who is a resident of South Carolina, North Carolina, or Georgia subject to South Carolina withholding taxes — and who works either completely or partially from a home office or other residence within or outside South Carolina.
The changes also expand the definition of eligible expenditures for qualified business to include operating leases:
- A qualifying business creating 25 jobs paying two and one-half times the per capital income in the county where the project is located may be reimbursed annually for lease payments
- The reimbursements may begin in the first year the business creates at least 10 new jobs meeting wage thresholds and may continue for up to 10 years
Retraining credit
The retraining credit allows eligible businesses engaged in manufacturing, processing, or a technology intensive industry up to a $1,000 refund per eligible full-time employee per year for retraining costs. The state recently added warehousing and distribution as eligible businesses.
How CLA can help with South Carolina business tax credits
CLA’s tax credits and incentives team is well versed in state tax incentives. We can help you understand the qualifications, submit applications, and navigate compliance rules.
Contact us
South Carolina expands business tax credits. See if you qualify. Complete the form below to connect with CLA.
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