Industries that invest at least $2.5 million in South Carolina may negotiate for a fee-in-lieu of property taxes. This can result in a savings of about 40% on property taxes otherwise due for a project. Certain large investments may be able to further reduce their liability by negotiating the assessment ratio from 10.5% down to 6%. For large investments, the assessment ratio can be reduced down to 4%. The county and the industry may agree to either set the millage rate for the entire agreement period or have the millage change every five years in step with the average millage rate for the area where the project is located. Any personal property subject to the fee in lieu of property taxes depreciates in accordance with South Carolina law, while the real property is either set at cost for the life of the agreement or can be appraised every five years.
A fee in lieu of property taxes is granted by, and at the discretion of, the county where the project is located. The industry must make the $2.5 million investment over a five-year period to qualify. Large investment projects have eight years to meet their increased investment requirements. During this period, all property that is placed in service pursuant to the agreement is subject to a fee instead of ad valorem property taxes. A county may give the industry an additional five years to complete the project and place new property in service subject to the fee. A single piece of property can be subject to the fee for up to 40 years with the county’s consent. The total project can be subject to the fee for up to 50 years with the county’s consent.
Other unique things about a fee in lieu of taxes include the ability to replace used property with new property and have it subject to the fee and the option for the county to grant a credit against the fee.
How to File:
Why use MyDORWAY?
- Pre-filled return information – If you’ve previously filed a Manufacturing Property Tax Return (PT-300), MyDORWAY will pre-fill your return with the prior year’s information, making filing easier than ever.
- Enhanced return summaries – MyDORWAY provides detailed Schedule data you can view anytime or save for your records.
- New filing reminders – Filing reminder notices and MyDORWAY web messages will be distributed four months before the return due date.
- New access role for tax professionals – Soon, tax professionals will have a new, easier option for accessing a client’s SCDOR Property Tax accounts on MyDORWAY.
Returns are required to be filed no less than once each calendar year, in accordance with SC Code Section 12-37-970. Returns are normally due on or before the last day of the fourth month following the taxpayer’s accounting closing date used for income tax purposes.
The following exceptions apply:
Initial return: The initial return is required to be filed for the first calendar year in business based on the taxpayer’s accounting closing date or December 31, whichever comes first. Example: A taxpayer who starts operation in July, after their June accounting closing date, should file based on assets as of December 31.
Change in account closing date: When a taxpayer changes their accounting closing date, within a calendar year, they must file a return for each accounting closing date. The SCDOR will determine the assessment from each return and use the highest assessment.
Property sold after the seller's account closing date: A return is required by the seller, based on the seller's accounting closing date. The purchaser is not required to file a return as of the purchaser's accounting closing date during the calendar year of the sale.
Property sold before the seller's account closing date: An initial return is required by the purchaser, based on the purchaser's accounting closing date or December 31, whichever comes first, after the purchase of the property.