The South Carolina Department of Revenue (SC DOR) annually ranks and designates the state’s 46 counties into four tiers based upon unemployment rate and per capita income (See S.C. Code Section 12-6-3360(B). Tier designation is important because it directly affects the amount of Job Tax Credit (JTC) a business can receive as a reward for creating and maintaining new jobs in South Carolina. JTCs are valuable state income tax credits and are available to new businesses or existing businesses adding new jobs to South Carolina. For each new full-time job created, the tax credit ranges in value from $1,500 to $25,000 per job, per year for up to five years.
Recently, the SC DOR issued SC Information Letter #21-28 that lists the county rankings and JTC Tiers for 2022.
For new full-time jobs created in tax years beginning in 2022, the JTC amount are as follows for the following counties:
- Tier I ($1,500 per year, per job): Aiken, Beaufort, Berkeley, Charleston, Greenville, Kershaw, Lexington, Newberry, Oconee, Richland, York
- Tier II ($2,750 per year, per job): Anderson, Calhoun, Dorchester, Edgefield, Florence, Georgetown, Hampton, Lancaster, Pickens, Saluda, Spartanburg
- Tier III ($20,250 per year, per job): Abbeville, Chesterfield, Clarendon, Colleton, Darlington, Fairfield, Greenwood, Horry, Jasper, Laurens, McCormick, Sumter
- Tier IV ($25,000 per year, per job): Allendale, Bamberg, Barnwell, Cherokee, Chester, Dillon, Lee, Marion, Marlboro, Orangeburg, Union, Williamsburg
The counties that were the biggest winners with the new rankings (i.e. whose JTC value grew from 2021 to 2022) are Cherokee (Tier III to IV), Greenwood (Tier II to III), McCormick (Tier II to III), and Dorchester (Tier I to II).
Under certain conditions, JTC amounts can be enhanced and increased. For example, certain businesses in three specific South Carolina counties can enjoy a 10-year moratorium on state corporate income taxes or insurance premium taxes. Other businesses might be able to qualify for an additional enhancement to JTC that increases the credit $1,000 per job. Businesses making capital investments and/or creating new jobs might also qualify for other property, employee withholding, or income tax credits.
JTCs and other tax incentives can be complicated and are subject to changing legislation, government guidance, and court interpretation. Therefore, businesses should seek professional advice to explore potential incentive eligibility and an effective implementation strategy.