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South Carolina Legislative Update: Port Cargo Volume Increase Tax Credit

On May 13, South Carolina Governor Henry McMaster signed into law a bill (S.B. 439) to increase the maximum amount of available tax credits for a port cargo volume increase. Most notably, the law will: (i) increase the maximum amount of the available tax credits for each calendar year from $8 million to $15 million; (ii) provide a “port transportation credit” for the costs of transporting freight, goods and materials to and from port facilities in South Carolina; and (iii) clarify that a “port facility” is a “distribution facility” for purposes of certain sales and use tax exemptions. A copy of S.B. 439 can be found here.

The Port Cargo Volume Increase Tax Credit is an existing program in South Carolina. This state discretionary incentive is a powerful tool providing a possible credit against income taxes or withholding taxes to companies that use the South Carolina ports and increase base port cargo volume by 5% over base-year totals. One of the requirements of eligibility is that a company must have, for its “base year,” 75 net tons of non-containerized cargo, 385 cubic meters or 10 loaded TEUs (i.e., twenty-foot equivalent units, a unit of measure for cargo containers) transported through a South Carolina port. To qualify, a company must complete an application and go through an approval process with the South Carolina Coordinating Council for Economic Development, which determines eligibility and the amount and type of credit the company may receive.

Increasing the maximum amount of the available annual tax credit significantly strengthens what is already a powerful state incentive for companies that utilize South Carolina’s growing network of ports. 

Copyright © 2020 Womble Bond Dickinson (US) LLP All Rights Reserved.National Law Review, Volume IX, Number 149

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About this Author

Stephanie Few  Womble Dickinson Law Firm  Charleston SC Tax Law for Corporate Re locations
Partner

Investigate South Carolina’s largest economic development deals of the past 20 years, and chances are Stephanie Few played a role in making them happen. One of the biggest assets she brings to clients is her familiarity with local and state decision-makers throughout the Southeast, and particularly in South Carolina, where Stephanie had previously served as the City of Charleston’s Director of Economic Development. When the New York Times profiled Charleston’s economic development boom in 2017, Stephanie was one of the local leaders the Times turned to for insight.

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