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June 2017
General Assembly Provides Property Tax Relief to Manufacturers

In 2017 Act No. 40, the General Assembly raised South Carolina's motor fuel user fee ("gas tax") to help pay for road repairs. However, as part of the Act, the General Assembly also enacted a property tax exemption for manufacturers' property. Under new Code Section 12-37-220(B)(52), 14.2857 percent of the property tax value of manufacturers' property is exempt from property taxes. This percentage exemption amount is to be phased in through six equal and cumulative percentage installments, applicable for property tax years beginning after 2017. The exemption reduces the effective assessment ratio from 10.5% to 9% for manufacturers' property. The revenue loss resulting from this exemption must be reimbursed to the counties and school districts in the same manner as the Trust Fund for Tax Relief, not to exceed $85 million. Companies and counties subject to FILOT-equivalent SSRC agreements should carefully review those agreements to determine the impact of this new exemption.

Issued in August 2015, GASB 77 requires disclosure of all reductions in tax revenues resulting from tax abatement agreements, whether entered into by the local government itself or by another government entity.

As a reminder, GASB 77 is effective for financial statements for periods beginning after December 15, 2015. For local governments with fiscal years ending June 30, which includes most counties in South Carolina, GASB 77 will first apply to the July 1, 2016 - June 30, 2017 fiscal year. Given that the July 1, 2016 - June 30, 2017 fiscal year is rapidly drawing to a close, counties that have not started planning for GASB 77 compliance should begin preparing immediately.  Please contact a member of the HSB Economic Development team for any assistance needed with respect to GASB 77 compliance.
SCDOR Implements New Supplemental "Schedule G" for Companies Under FILOT Agreements

Due to new standards for state and local governments required by the Government Accounting Standards Board (GASB), in particular Statement No. 77, DOR now requires that all companies receiving the benefits of a Negotiated FILOT agreement complete and submit Schedule G - "Fee In Lieu of Tax Supplemental" (Form PT-300G) when filing their annual property tax returns (PT-300). The purpose of the form is to collect data that will aid counties in complying with GASB Statement No. 77. Form PT-300G must be sent to the County Auditor where the FILOT project is located at the same time the company files its PT-300 with DOR. A separate PT-300G must be completed for each Schedule S or Schedule T filed by the company. Contact a member of the HSB Economic Development team for any assistance needed with your annual PT-300 filings or Schedule G.
State Export Incentives Program Receives Grant from US Small Business Administration

South Carolina's Export Incentives Program has been awarded a State Trade and Export Promotion (STEP) Grant from US Small Business Administration. The State's Export Incentives Program was developed by the SC Department of Commerce to assist small and medium sized businesses with increasing their exports by providing reimbursements for specific export-related expenses. Eligible applicants must apply for the program by September 1, 2017, and all approved export related activity must be completed and submitted before September 29, 2017.

Reminder - Submit Warehouse Exemption Form PT-465 to DOR by July 1
Section 12-43-220(a)(4) of the South Carolina Code provides that real property owned by or leased to a manufacturer and used primarily for warehousing and wholesale distribution is not subject to the 10.5% assessment ratio that applies generally to property of manufacturers that is used in the conduct of their business. For purposes of this exemption, the real property owned by or leased to a manufacturer and used primarily for warehousing and wholesale distribution must not be physically attached to the manufacturing plant unless the warehouse and wholesale distribution area is separated by a permanent wall. Eligible taxpayers wishing to avail themselves of this provision should submit Form PT-465 "Warehousing & Wholesale Distribution Facilities of Manufacturers" to DOR by July 1 to ensure that DOR has adequate time apply the exemption for the property tax year.
South Carolina I-77 Alliance Releases Regional Workforce Study

The South Carolina I-77 Alliance has released its regional workforce study, which provides a profile and assessment of the I-77 Alliance region's workforce. The study also highlights workforce strengths and identifies key workforce challenges for the region. The South Carolina I-77 Alliance covers the four-county region along Interstate 77 between Charlotte, NC and Columbia, SC. The region includes York, Chester, Fairfield and Richland counties. The study can be found here.

Please contact a member of the HSB Economic Development team for any assistance needed with respect to the items addressed in this newsletter. | Charleston | Columbia | Florence | Greenville | Myrtle Beach

William R. Johnson | 1201 Main Street, 22nd Floor, Columbia, SC 29201