Investment tax credit
South Carolina offers an Investment Tax Credit (ITC) for companies that place qualified manufacturing and productive equipment into service in the state.
The credit ranges from 0.5% to 2.5% of the qualifying basis of eligible property, depending on the property’s applicable recovery period under the Internal Revenue Code.
Who may qualify
Companies that place qualified manufacturing and productive equipment into service in South Carolina may be eligible for the Investment Tax Credit.
Qualifying property may include certain equipment used as an integral part of manufacturing, production and other eligible activities. Property must meet applicable state and federal requirements related to its use, acquisition and recovery period.
Credit calculation
The credit ranges from 0.5% to 2.5% of the qualifying basis of eligible property. The applicable percentage is based on the property’s recovery period under the Internal Revenue Code.
The following table outlines applicable credit percentages:
| Recovery Period | Credit Value |
|---|---|
| 3 years | 0.5% |
| 5 years | 1% |
| 7 years | 1.5% |
| 10 years | 2% |
| 15 years or more | 2.5% |
The longer the recovery period assigned under federal tax rules, the higher the allowable credit percentage.
Credit usage and carryforward
Unused credits generally may be carried forward for up to 10 years. Certain qualifying manufacturers may be eligible for an extended carryforward, subject to statutory requirements.
Additional limitations may apply based on the company, qualifying property and other credits claimed. Companies should review current South Carolina Department of Revenue (SCDOR) requirements when calculating and claiming the credit.
Claiming the credit
The South Carolina Department of Revenue (SCDOR) administers the Investment Tax Credit. Companies claim the credit using Form TC-11 with the applicable South Carolina income tax return.
