HSB Economic Development Update – January 2022 – Tax

2022 county levels set for JTCs, in lieu fees and tax moratorium

Each year, South Carolina’s 46 counties are designated as part one of four “tiers” for the purposes of the Employment Tax Credit and Employment Development Credit based on a county’s unemployment rate and per capita income. The SC Department of Revenue has released the 2022 designations. The chart to the right shows counties with a new tier designation.

Below is a full list of counties and their respective tiers for 2022:

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There were no changes to the income tax moratorium counties (Chesterfield, Dillon and Jasper), and for 2022, no county is eligible for the reduced $1 million investment threshold for FILOT agreements.

Publication of the JDC 2022 salary update

On January 13, 2022, the South Carolina Economic Development Coordinating Council released an updated hourly wage memorandum for companies participating in the Job Development Credit (JDC) program. The updated salary levels and associated JDC percentages are as follows:

2% – $10.84 – $14.44 / hour

3% – $14.45 – $18.05 / hour

4% – $18.06 – $27.09 / hour

5% – $27.10 and up

Employment Development Credits are always subject to the terms of a company’s “Final Revitalization Agreement” with the Coordinating Board. Credits are the product of salaries paid to eligible employees, a percentage ranging from 2% to 5% (as shown above), and a percentage based on county ranking, ranging from 55% for projects in Tier 1 counties. I at 100% for projects in Tier IV counties. Most Revitalization Final Agreements also contain a contractual minimum wage level, and agreements in recent years call for this wage level to be reset every five years based on an adjustment for inflation. Companies claiming JDCs should pay particular attention to these issues.

Each company participating in the JDC program must receive an updated salary note and contact sheet which must be signed and returned to the Coordinating Council by April 30.

Freight credit for port volume

South Carolina Code § 12-6-3375 provides a tax credit to a taxpayer engaged in manufacturing, warehousing, or distribution that uses South Carolina port facilities and increases its volume of port cargo in those facilities by at least 15% in a calendar year over its base year port cargo volume. Form TC-30, “Increase in Port Freight Volume”, is used to claim the credit.

It is important to note that claims for the tax credit must be submitted at the beginning of the year, as the maximum amount that all taxpayers can claim under this article is subject to an annual cap. Please contact a member of the HSB ED team if you have any questions.

Farm tax credit

In 2018, South Carolina introduced a new program that provides a tax credit to agribusiness or agricultural packaging businesses that increase their purchases of South Carolina agricultural products. If a business’ “base year” purchases exceeded $100,000 and the business increased those purchases by at least 15%, the business may apply for income or tax deductions. The amount of credits is determined by the South Carolina Coordinating Council, based on the information provided in the application. The credit cannot exceed $100,000 per taxpayer per year. As with port freight volume credits, these credits are also subject to an annual statewide cap, so eligible ratepayers should apply for credits as early in the year as possible.

Per capita income figures

On December 10, 2021, the South Carolina Department of Revenue released SC Newsletter #21-27, stating the updated per capita income level for the state at $48,021. Please access the link to view county per capita income levels. State per capita income is relevant for the Small Business Employment Tax Credit, in which a taxpayer with 99 or fewer employees in an eligible industry increases employment by two new full-time jobs or more. If the average salary for those jobs does not exceed 120% of the lowest average per capita income in the county or state, the credits are cut in half. In particular, if the small business creates at least ten new full-time jobs, it is eligible for the full amount of employment tax credits, regardless of wages.

In addition, state per capita income is relevant for purposes of the definition of a “qualifying service-related facility,” which applies to both employment tax credits and development credits. employment and which has become an increasingly important means for non-manufacturing businesses to qualify. for major incentives in South Carolina. In addition, the figure is relevant for technology-intensive facilities to determine eligibility for the computer equipment sales and use tax exemption, as well as the computer income tax credit. Statement for Personal Property Expenditures Associated with Head Office Projects.

HSB expands to North Carolina

We are delighted to announce that we have opened an office in Raleigh. The company has seen steady growth in demand from North Carolina customers. William McKinney, who joined the firm last summer after serving as general counsel to the governor of North Carolina, will be the senior partner in the office in Raleigh. William focuses his practice in the areas of state and local government, economic development and commercial litigation.

The company’s Raleigh office is located at The Dillon at 223 South West Street, the first mixed-use development of its kind in Raleigh’s vibrant and growing downtown neighborhood.

HSB in motion

HSB is proud to support the Palmetto Partners program. Gary Morris attended the recent Site Consultant Luncheon in Atlanta and Philip Land traveled to Cologne, Germany for Anuga, the global trade show for the food and beverage industry.

Will Johnson attended the SEDC Meet the Consultants conference held in Atlanta. We look forward to seeing you at an industry event in 2022!

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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