Textiles rehabilitation credit

South Carolina offers the Textiles Rehabilitation Credit to encourage the rehabilitation, improvement and redevelopment of abandoned textile mill sites. The credit is designed to support the reuse of properties that were previously used for textile manufacturing operations and related activities.

Companies that invest in qualifying sites may be eligible for a tax credit equal to 25% of rehabilitation expenses.

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Eligible sites

Eligible sites

To qualify, a site must meet the definition of an abandoned textile mill site.

An eligible site must:

  • Have been directly used for textile manufacturing operations or ancillary purposes related to textile manufacturing 
  • Be considered abandoned 

For purposes of this credit, a textile mill is considered abandoned when at least 80% of the textile mill has been closed continuously to business or otherwise nonoperational as a textile mill for at least one year.

Credit options

Credit options

A qualifying company may choose between two credit options.

State income and related tax credit

A company may claim a credit equal to 25% of qualifying rehabilitation expenses against certain state taxes, including income tax and corporate license fees.

Key features include:

  • The credit must be taken in equal installments over five years 
  • Installments begin in the tax year in which the site is placed in service 
  • The credit is limited to the company’s applicable tax liability for the tax year 
  • Unused credits may be carried forward for up to five years 

Real property tax credit

Alternatively, a company may claim a credit against real property taxes equal to 25% of rehabilitation expenses multiplied by the local taxing ratio of each local taxing entity that consents to the credit.

Key features include:

  • The credit may offset up to 75% of property taxes 
  • The credit may be claimed for up to eight years 

The county or municipality where the site is located must determine that the site and proposed project are eligible. The local governing body must approve the project by majority vote through a public hearing and ordinance.

Application process

Application process

The application process depends on the type of credit being claimed.

For the state income and related tax credit, companies must file a Notice of Intent to Rehabilitate with the South Carolina Department of Revenue (SCDOR) before receiving building permits.

For the real property tax credit, companies must file a Notice of Intent to Rehabilitate with the county or municipality where the site is located before incurring rehabilitation expenses.

SCDOR resources

Textiles rehabilitation credit guidance TC-23 credit form and instructions
How to proceed

How to proceed

Companies considering redevelopment of an abandoned textile mill site should:

  • Confirm that the site meets the statutory definition of “abandoned.”
  • Determine which credit option aligns with their project.
  • File the required Notice of Intent to Rehabilitate with the appropriate authority before proceeding.

Early coordination with the Department of Revenue or the applicable local government is essential to maintain eligibility.

FAQs

Frequently asked questions