2021 South Carolina Code of Laws
Title 12 - Taxation
Chapter 6 - South Carolina Income Tax Act
Section 12-6-3588. South Carolina Clean Energy Tax Incentive Program; definitions; requirements to receive tax credit.
(A) The General Assembly has determined to enact the "South Carolina Clean Energy Tax Incentive Program" as contained in this section to encourage business investment that will produce high quality employment opportunities and enhance this state's position as a center for production and use of clean energy products. The program accomplishes this goal by providing tax incentives to companies in the solar, wind, geothermal, and other clean energy industries which are expanding or locating in South Carolina.
(B) As used in this section:
(1) "Capital investment" means an expenditure to acquire, lease, or improve property that is used in operating a business, including land, buildings, machinery, and fixtures.
(2) "Manufacturing" means fabricating, producing, or manufacturing raw or unprepared materials into usable products, imparting new forms, qualities, properties, and combinations. Manufacturing does not include generating electricity for off-site consumption.
(3) "Qualifying investment" means investment in land, buildings, machinery, and fixtures for expansion of an existing facility or establishment of a new facility in this State. Qualifying investment does not include relocating an existing facility in this State to another location in this State without additional capital investment.
(4) "Clean energy operations" are limited to manufacturers of systems or components that are used or useful in manufacturing or operation of clean energy equipment for the generation, storage, testing and research and development, and transmission or distribution of electricity from clean energy sources, including specialized packaging for the clean energy equipment manufactured at the facility. A clean energy operation does not include generating electricity for off-site consumption.
(C) A business or corporation meeting the requirements of this section is eligible to receive a ten percent nonrefundable income tax credit of the cost of the company's total qualifying investments in plant and equipment in this State for clean energy operations.
(D) The business or corporation shall:
(1) manufacture clean energy systems or components in South Carolina for solar, wind, geothermal, or other clean energy uses in order to be eligible for the tax credit authorized by this section;
(2) invest at least fifty million dollars in a Tier IV county, at least one hundred million dollars in a Tier III county, at least one hundred fifty million dollars in a Tier II county, and at least two hundred million dollars in a Tier I county according to the county ranking and designation system as provided pursuant to Section 12-6-3360(B) in the year the tax credit is claimed in new qualifying plant and equipment; and
(3) have created at least one full-time job for every one million dollars of capital investment qualifying for the credit that each pays at least one hundred twenty-five percent of this state's average annual median wage as defined by the Department of Commerce.
(E) The income tax credit is allowed for up to sixty months beginning with the first taxable year for which the business or corporation is eligible to receive the credit, so long as the business or corporation becomes eligible to receive the credit no later than the tax year ending on December 31, 2020.
(F) A taxpayer may separately qualify for new facilities in separate locations or for separate expansions of existing facilities located in this State.
(G) A taxpayer's total credit for all expenditures allowed pursuant to this section must not exceed five hundred thousand dollars for any year and five million dollars total for all years. Unused credits may be carried forward for fifteen years after the tax year in which a qualified expenditure was made. The credit is nonrefundable.
(H) For any credit awarded after tax year 2014, to obtain the amount of the credit available to a taxpayer, each taxpayer shall notify the Department of Revenue, in writing, of its intention to claim the tax credit. The Department of Revenue shall determine the proof necessary to meet the requirements of subsections (D)(1) and (D)(2). Expenditures qualifying for the tax credit allowed by this section must be certified by the Department of Revenue. The Department of Revenue must consult with the Department of Commerce, the State Energy Office, or any other appropriate state and federal officials on standards for certification.
Each taxpayer shall submit a request for the credit to the Department of Revenue by January thirty-first for qualifying expenses incurred in the previous calendar year and the Department of Revenue must notify the taxpayer that the submitted expenditures qualify for the credit and the amount of credit allocated to such taxpayer by March first of that year. A taxpayer may claim the maximum amount of the credit for its taxable year which contains the December thirty-first of the previous calendar year.
(I) To obtain the amount of the credit available to a taxpayer, the Department of Commerce also must certify to the Department of Revenue that the taxpayer has met the job creation requirements of subsection (D)(3).
(J) The credits authorized by this section are in lieu of any other applicable income tax credits or abatements allowed by state law, and in the event of an overlap or conflict in available credits or abatements to a taxpayer, the taxpayer must select the credit or abatement the taxpayer desires in the manner prescribed by the Department of Revenue to the extent the credits or abatements conflict or overlap.
HISTORY: 2010 Act No. 290, Section 23, eff January 1, 2011; 2014 Act No. 279 (H.3644), Section 1.A, eff June 10, 2014.
Editor's Note
2014 Act No. 279, Section 1.B, provides as follows:
"B. This section takes effect upon approval by the Governor and applies to tax years beginning after 2013."
Effect of Amendment
2014 Act No. 279, Section 1.A, rewrote the section.
