Town of Fort Mill Incentives
Economic development objectives are to increase its tax base, create jobs, and stimulate the local economyby encouraging new business activities or expansion of existing business activities.Main Street Grant – Fort Mill’s Facade Improvement Grant ProgramOn September 26, 2016, Fort Mill Town Council adopted a Façade Improvement Grant Program to encourage reinvestment in, and revitalization of, the downtown commercial district. This program provides reimbursable matching grants of up to $5,000 to help offset the cost of exterior improvements to a property owner or tenant’s commercial building. The Façade Improvement Grant Program requires a minimum match equal to, or greater than, the total grant amount. Grants will be awarded on a competitive basis until all available funding for the current fiscal year has been committed. Individuals and business owners who wish to be considered for a grant must complete and submit a formal application.
“Historic Main Street in Fort Mill has seen a great deal of change in the past year including renovations to be completed in 2017. The redevelopment of the Old Centre Theatre will be a unique opportunity to save a portion of Fort Mill’s history and position it for its future success. We have been very fortunate to work with the sellers [Bayles Mack and Michael Chase], the town of Fort Mill, and the Fort Mill Economic Council, to be given this unique opportunity to renovate historic Main Street and make downtown Fort Mill a destination again.” – Shaw Kuester
For developers doing their first historic rehabilitation tax credit deal in Fort Mill there potentially is available property tax incentives that may accompany your historic rehab tax credits. In South Carolina, state law authorizes local tax authorities to adopt, by ordinance, a special assessment for eligible historic rehabilitation properties and low income properties. This little known incentive is known as the “Bailey Bill”. It can lock-in the assessed value on the property at its pre-rehab value for up to 20 years. It could save you hundreds of thousands in property taxes over the life of the special assessment period. This requires preliminary approval for the Bailey Bill from the Town of Fort Mill before you start construction.
Bailey Bill Form: Bailey Bill Application – Preliminary Certification
State of South Carolina Incentives
Corporate Headquarters Credits
A corporation establishing a corporate headquarters in South Carolina, or adding to an existing corporate headquarters, is entitled to a credit against corporate income and license taxes. The credit is equal to 20% of the (a) qualifying real property costs incurred in the design, preparation and development of either establishing or expanding a corporate headquarters, and (b) direct construction or direct lease costs for the first five years of operations for the headquarters. In order to quality for the credit, the headquarters or expansion must result in the creation of forty (40) new headquarters function jobs or research and development related functions and services, twenty (20) of which are executive, administrative or professional jobs. The qualifying real property costs involved must be at least $50,000.
Corporate Income Tax
South Carolina has the lowest corporate income tax rate in the Southeast and one of the lowest in the nation. South Carolina income tax is imposed upon South Carolina taxable income of domestic and foreign corporations. South Carolina collects at a 5% corporate income tax rate. *Partnerships are not subject to South Carolina corporate income taxes. *Corporate Income Tax Exemptions – insurance companies, certain non-profit corporations organized for the purpose of providing water supply and/or sewage disposal, banks, building and loan associations and certain electric cooperatives *An “S” corporations is exempt to the extent it is exempt from federal corporate income tax.
Enterprise Program (Jobs Development Credits) Personal Income Tax
Personal income is tiered in SC based on earned income, however most employees at the $30,000 annual salary range would be subject to a 7% assessment. For qualified companies, upon successful application and approval, the SC Coordinating Council for Economic Development establishes a Revitalization Agreement for Jobs Development Credits. This program allows eligible companies to retain a portion of the employee state tax withholding, ranging from 2 to 5 percent of wages and to use these funds for fixed capital investments, e.g. land and building, leasehold improvements, expansions and other non-personal investment. Machinery and equipment (FF&E) purchases are specifically excluded from eligible expenditures. The program allows an eligible company to accrue JDC’s for a period of 10 years and is also qualified based on the development status of the particular county.
Sales Tax – Manufacturer’s Exemption
South Carolina imposes a sales and use tax of 5%, the proceeds of which are used exclusively to fund the public school system. The sales tax applies to all retail sale, lease and rental of tangible personal property. SC exempts any applicable sales tax for purchases that are an integral part of the manufacturing process including raw materials, machinery and equipment for manufacturing, electricity used for manufacturing, packaging materials and other products as allowed by law. York County has leveraged a 1% additional tax, recently renewed by county voters, to improve roads throughout the county. York County’s total sales tax rate is 6%.
South Carolina Jobs Tax Credits
Corporate Income Tax levied in South Carolina is 5% and is based on a tripartite formula of sales, payroll and asset with sales in SC double-weighted. Compared to North Carolina’s 7% corporate income tax rate, there is an immediate savings in SC. In addition, SC allows qualified and eligible companies a Jobs Tax Credit up to $2,500 per job in York County. To be eligible, the minimum number of jobs created is 10 net new jobs in one year. The credit is per job, per year for five years and is applied towards the corporate income tax in SC and cannot equal more than 50% of any one year’s liability. There is a 15 year carry forward for unused credits.
Fee-in-Lieu of Taxes
For eligible and qualified companies,York County is potentially able to provide as much as a 43% property tax reduction for a 30-year period through the Fee-in-Lieu of Taxes program. Assuming a minimum net-taxable investment of $10 million, York County may be willing to reduce applicable real and personal tax assessment rates from 10.5% (for manufacturing) to 6% for a 30-year period. Another benefit to this program is the elimination of any annual property tax increases since rates can be frozen for five year increments during the 30-year agreement.
Local Property Tax
Real and personal property used in business are subject to property tax levied by local governments. Although property tax is collected locally, the South Carolina Department of Revenue (DOR) generally oversees property tax collections to ensure equitable and uniform assessment throughout the state. The Department of Revenue appraises manufacturing and distribution facilities. There is no state or local tax on intangibles or inventories. The calculation of property taxes involves the following three elements: *Valuation *Assessment Ratio: The assessment ratio, established in the State Constitution to ensure stability, is 10.5% for manufacturing property (in the absence of a fee-in-lieu agreement) and 6% for commercial real property. Commercial personal property is assessed at 10.5%. The valuation is multiplies by this ratio to produce the “assessed value” of a particular piece of property. Taxes are levied based upon this assessed value. *Millage: Each taxing jurisdiction determines on an annual basis the number of mills required to apply to the total assessed value of property subject to taxation within its jurisdiction in order to raise the money it needs to operate for the next year. (Each jurisdiction also takes other sources of revenue into account in making this determination.) .
Any manufacturing company that invests in land, building, and machinery and equipment, with a sum of $50,000 or greater, is eligible for an abatement of city and county property taxes. A distribution company may be eligible for abatement if the project creates 75 or more new jobs. The abatement stands for five (5) years and does not affect the depreciation value of the property. The abatement must be filed, in the same tax year as the purchase was made, to the Department of Revenue.