Large project sales tax exemptions
South Carolina offers several sales and use tax exemptions that can reduce the cost of certain equipment and materials for qualifying large-scale investments.
Depending on the project, separate exemptions may be available for material-handling equipment, construction materials and certain property used by qualifying technology-intensive facilities.
Overview
South Carolina provides three distinct sales and use tax exemptions that may benefit qualifying large-scale projects. Each exemption has its own eligibility requirements, investment thresholds and qualifying purchases.
The exemptions include:
- Material-handling equipment exemption for qualifying manufacturing or distribution projects
- Construction materials exemption for qualifying large-scale manufacturing or distribution facilities
- Technology-intensive facility exemptions for qualifying technology-intensive operations
Companies should evaluate each exemption separately based on the type, scale and timing of their investment.
Exemption details
Material-handling equipment exemption
Manufacturing or distribution projects investing $35 million or more in South Carolina may qualify for a sales and use tax exemption for certain material-handling systems and equipment.
Companies should review current South Carolina Department of Revenue (SCDOR) requirements to determine which equipment and project costs qualify.
Construction materials exemption
Construction materials used in the construction of a new or expanded manufacturing or distribution facility, or a facility serving both purposes, may qualify for a sales and use tax exemption when the project involves at least $100 million in capital investment at a single South Carolina site over an 18-month period.
Companies must notify SCDOR of their intent to invest and use the exemption. Qualifying purchases may begin on the first day of the calendar month following notification.
Technology-intensive facility exemptions
Certain technology-intensive facilities may qualify for sales and use tax exemptions on computer equipment, electricity and certain property used to provide electricity to the facility.
To qualify, a project generally must:
- Meet South Carolina's definition of a technology-intensive facility
- Invest at least $300 million at the facility over a five-year period, with at least 60% of the investment in qualifying computer equipment
- Create at least 100 new full-time jobs over five years
- Meet applicable compensation requirements for qualifying new jobs
Companies must meet additional statutory requirements to qualify and maintain the exemptions.
Why these exemptions matter
Large project sales tax exemptions can help companies:
- Reduce upfront costs associated with major capital investments
- Strengthen the business case for locating or expanding in South Carolina
- Improve the economics of investments in manufacturing, distribution and technology-intensive operations
- Support long-term growth as operations scale in the state
These exemptions are part of South Carolina's broader approach to supporting significant business investment and long-term economic growth.
Claiming the exemptions
The South Carolina Department of Revenue (SCDOR) administers these sales and use tax exemptions. Qualification, notification and documentation requirements vary by exemption.
Companies considering a qualifying large-scale investment should review current SCDOR requirements early in project planning to understand applicable thresholds, notification requirements and eligible purchases.
