South Carolina has become a popular state for business owners looking for business-friendly programs and infrastructure. One of the main advantages of doing business in the Palmetto State is the diverse collection of business tax credits, tax incentives, and exemptions available to operations in every industry.
Check out the list below to find out what your company might qualify for.
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South Carolina business tax credits, incentives, and exemptions
General business tax credits
Investment Tax Credit
South Carolina’s Investment Tax Credit gives manufacturers locating or expanding in the state a one-time credit against their corporate income tax for investing in new production equipment. The credit is up to 2.5% of a company’s investment in new production equipment.
Research and Development Tax Credit
South Carolina’s Research and Development Tax Credit offers a credit to businesses that invest in qualified research and development (R&D) activities. The credit is equal to 5% of the company’s qualified research expenses incurred in the state.
Related: Get the full breakdown on the federal R&D credit.
Hiring and growth tax incentives
Jobs Tax Credit
The Jobs Tax Credit incentivizes businesses to expand within or relocate to South Carolina. Qualified businesses can get tax credits to reduce their corporate income tax by creating a minimum number of new jobs.
Credit amounts vary depending on which Tier—aka county—businesses are located.
- Tier I: $1,500 per job
- Tier II: $2,750 per job
- Tier III: $20,250 per job
- Tier IV: $25,000 per job
Companies in the following industries must create a monthly average of 10 new jobs: Manufacturing, processing, agricultural packaging, warehousing and distribution, research and development, agribusiness operations, and qualifying technology.
Corporate office facilities that house a majority of the headquarters functions also have to create a monthly average of 10 new jobs. However, qualified service-related facilities must create a monthly average of between 10 and 175 new jobs, depending on their industry and the county in which they’re located.
Small Business Jobs Tax Credit
South Carolina offers a Small Business Jobs Tax Credit to qualifying businesses that create new jobs. The credit is available to companies in the below categories that create a monthly average of two new jobs, and pay those jobs 120% of the county’s average hourly rate:
- Businesses in manufacturing, processing, agricultural packaging, warehousing and distribution, research and development, agribusiness, or a qualified technology-intensive facility
- Corporate offices with fewer than 99 employees worldwide
Planning to hire? Make sure you review South Carolina labor laws and employment requirements before getting started.
Corporate Headquarters Tax Credit
The Corporate Headquarters Tax Credit is available to South Carolina businesses that move to or expand their corporate headquarters within the state. The credit amount is equal to 20% of the sum of 1) the value of the facility dedicated to headquarters operation for the first five years of operation and 2) the tangible personal property used for headquarters-related functions.
To qualify for the credit, businesses have to meet the following requirements:
- Have real property costs of at least $50,000
- Create a minimum of 40 new full-time jobs that are performing headquarters-related functions and services and have gross wages equal to or greater than 2x the state per capita income
- The facility must be the location where the majority of the company’s financial, legal, personnel, planning, and/or other staff functions are handled on a regional or national basis
- The facility must be the sole corporate headquarters within the region or nation, with other facilities that report to it
Job Development Credit
Part of the state’s Enterprise program, the Job Development Credit is a cash incentive program available to South Carolina businesses that hire new employees and expand or relocate their business facilities within the state.
Eligible businesses can use the funds—up to $3,250 per employee—to acquire land or buildings; develop a site; purchase pollution control equipment; or invest in hiring.
To qualify for the Job Development Credit, a business has to meet the following criteria:
- Meet the requirements of a manufacturing, agricultural packaging, processing, corporate office, warehouse and distribution, research and development, agribusiness, tourism, or qualified service-related facility
- Create at least 10 new full-time jobs
- Provide full-time employees with a benefits package that includes a comprehensive health plan and pay at least 50% of an eligible employee’s cost of health plan premiums
Need help understanding how health plan premiums affect your business? Check out this breakdown.
Environmental sustainability tax credits
Recycling Facility Tax Credit
This credit rewards recycling facilities in South Carolina for investing in major growth projects and manufacturing products composed of 50% or more post-consumer waste. The credit is equal to 30% of the cost of recycling property placed into service each year.
To qualify, a recycling facility must invest $150 million in a growth project or projects within five years.
Solar Energy Tax Credit
South Carolina’s Solar Energy Tax Credit rewards businesses for acquiring alternative energy systems in their facilities. The credit is equal to 25% of the cost to purchase and install a solar
energy system, small hydropower system, or geothermal machinery and equipment.
The maximum credit is $3,500 per facility or 50% of the business’s income tax liability for the year, whichever number is less. To qualify for the credit, the business’s proposed energy system must be certified by the Solar Rating & Certification Corporation or another similar organization.
Switching to alternative energy is just one way to make your business more environmentally sustainable. Here are five other sustainability strategies.
Credit for Alternative Fuels
South Carolina businesses that invest in creating facilities to distribute or dispense alternative fuel can get a credit against their income taxes. The credit is equal to 25% of the cost of purchasing, constructing, and installing eligible property (think: pumps, compressors, or storage tanks) used to distribute, dispense, or store alternative fuel at a new or existing commercial fuel distribution or dispensing facility in South Carolina.
Alternative fuel refers to compressed natural gas, liquefied natural gas, or liquefied petroleum gas dispensed for use in motor vehicles or dispensed by a distributor or facility.
Energy Conservation and Renewable Energy Tax Credit
The Energy Conservation and Renewable Energy Tax Credit is available to businesses that invest in certain energy conservation and renewable energy production measures. Those include conservation tillage equipment, drip/trickle irrigation systems, and dual-purpose combination truck and crane equipment.
The credit is equal to 25% of the expenses incurred to purchase and install this equipment. The maximum credit for each measure is $2,500.
Keep in mind: If you overhaul your energy system, you’re one step closer to earning a green certification for your business.
Development tax credits
Textile Revitalization Credit
South Carolina businesses can get a tax credit for rehabilitating abandoned textile mill sites. Businesses that improve and revitalize these sites can take one of two tax credits:
- A credit against income taxes or license taxes equal to 25% of the rehabilitation expenses
- A credit against real property taxes equal to 25% of the rehabilitation expenses of an eligible site, multiplied by the local taxing ratio of each local taxing entity that has consented to the tax credit
Revitalization of Abandoned Building Credit
This credit rewards South Carolina businesses for renovating or redeveloping an abandoned site for income-producing purposes. To qualify, businesses have to:
- Spend more than $250,000 to redevelop a building in an unincorporated area of a county or in a municipality with a population of more than 25,000
- Spend more than $150,000 to redevelop a building in an unincorporated area of a county or in a municipality with a population between 1,000 and 25,000
- Spend more than $75,000 to redevelop a building in an unincorporated area of a county or in a municipality with a population of less than 1,000
Businesses that meet the criteria can take one of two tax credits:
- A credit against income taxes or license taxes equal to 25% of the rehabilitation expenses
- A credit against real property taxes equal to 25% of the rehabilitation expenses of an eligible site, multiplied by the local taxing ratio of each local taxing entity that has consented to the tax credit
Industry-specific tax credits
Port Volume Increase Tax Credit
Certain South Carolina companies involved in manufacturing, distribution, warehousing, freight forwarding, freight handling, goods processing, cross-docking, transloading, or wholesaling may be eligible for the Port Volume Increase Tax Credit.
To qualify, a company must have 75 net tons of non-containerized cargo and 385 cubic meters or 10 loaded TEUs transported through a South Carolina port facility for their base year. They must also increase their port cargo volume by 5% over base-year totals.
Port Transportation Tax Credit
The Port Transportation Tax Credit is available to eligible companies involved in manufacturing, distribution, warehousing, freight forwarding, freight handling, goods processing, cross-docking, transloading, or wholesaling. The credit amount is based on the company’s transportation costs to and from a South Carolina port.
SC Agricultural Products Purchases Credit
The SC Agricultural Products Purchases Credit is available to eligible agribusiness or agricultural packaging operations. To qualify for the credit, your company must have a base year in which you purchase more than $100,000 of agricultural products grown in South Carolina, then increase the number of agricultural units in the following year by at least 15%.
The maximum credit amount per year is $100,000.
South Carolina business tax exemptions
South Carolina also has a range of sales tax exemptions available to businesses that make certain purchases. Businesses can get sales tax exemptions on:
- Machinery and equipment used in manufacturing, processing, agricultural packaging, recycling, compounding, mining, or quarrying of tangible personal property for sale
- Materials that will become an integral part of the finished product
- Coal, coke, or other fuel for manufacturers, transportation companies, electric power companies, and processors
- Industrial electricity and other fuels used in manufacturing tangible personal property
- Research and development machinery and equipment
- Air, water, and noise pollution control equipment
- Material handling equipment for manufacturing or distribution projects investing $35 million or more in the state
- Packaging material
- Long-distance telephone calls and access charges
- Construction materials
- Technology-intensive materials
- Recycling equipment
- Data center materials
The state also exempts all inventories, all intangible property, and all pollution control equipment from local property taxes.
Five-Year Property Tax Abatement
Certain South Carolina manufacturers and distribution or corporate headquarters facilities can get a five-year property tax abatement (also known as a reduction) from county operating taxes. The abatement usually reduces the taxes by 20–50%.
To qualify, manufacturing companies must invest at least $50,000 in a growth project in South Carolina. Distribution and corporate headquarters facilities must invest $50,000 and create at least 75 new jobs in the first year.
Corporate Income Tax Moratorium
South Carolina’s Corporate Income Tax Moratorium gives eligible businesses in economically distressed counties the opportunity to eliminate their corporate income tax liability for a period of 10 to 15 years.
Companies that create at least 100 net new full-time jobs in a five-year period can qualify for a 10-year moratorium. Companies that create at least 200 net new full-time jobs in a five-year period can qualify for a 15-year moratorium.
To qualify for the moratorium, at least 90% of the company’s total investment in South Carolina must be in an area where the unemployment rate is twice the state average. Interested companies also have to receive certification that their growth project and job creation will have a positive effect on the community.
For 2025, businesses in Chesterfield, Marlboro, and Union Counties are eligible for the moratorium.
Learn more about South Carolina’s business tax incentives and credits in the South Carolina Department of Commerce’s Business Incentives 2025 guide.
South Carolina city and county tax credits
Many South Carolina cities have their own business tax incentives and credits. Search your county or city’s website to find out what your options are.
South Carolina business financing
Tax credits and incentives can help. support your business’s bottom line, but they only take you so far. When you need sizable capital for a major investment or flexible credit for a short-term project, loans and grants are critical. Read through Gusto’s guide to business grants and loans in the Palmetto State to discover your state resources.
