Tax Credits and Incentives

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Tax Credits and Incentives
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Brownfields Tax Credits

• In place since 2002
• On paper, some of the strongest incentives in
  nation

Reality Never Used
Lot of Missed Opportunities
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Disclaimers

• Tax Credits only obtainable by NRPs
  (Non-Responsible Parties)
• Responsible Parties may qualify for tax
  deductions as business expenses
• Tax Credits are not transferable
• Consult a qualified tax expert before making
  budgetary decisions based on Tax Incentives

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Voluntary Cleanup Activity Tax Credit

• Only Tax Credit Overseen by DHEC
• Amount of credit determined by amount spent on
  site under a NRP contract
• Tax Credit is applied against State Corporate
  Income Taxes
• Typically Type C Corporations
• LLCs and Type S Corporations Check your Tax
  Structure

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Voluntary Cleanup Activity Tax Credit

• As long as Contract work underway
• Credit 50 of Qualifying Costs
• 50,000 annual cap on Credits
• No limit on number of years of work
• Once Contract Completed
• Bonus Credit of 10 of Qualifying Costs over the
  life of the contract
• Subject to 50,000 cap

500,000 over life of contract
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Voluntary Cleanup Activity Tax Credit

• Can Carry up to 100,000 Forward for use
  against Corporate Income in Subsequent years
• Carry forward Credits include sum of Yearly
  Credits (on-going work) Bonus Credit
• Must Use Credits within 5 years after earning

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Consider
If clean
1,000,000
PROPERTY VALUE
50,000 Credit
50,000 BONUS Credit
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Voluntary Cleanup Activity Qualifying Costs

• Almost all Extra Costs as result of entering
  into a VCC
• Environmental, Contracting, Oversight, etc.
• Environmental Costs before signing VCC may count
  On Case-by Case basis
• Indirect Costs excluded (office space, etc)
• Partial Infrastructure Costs may count if
  integral to remedy
• Asphalt parking lot as Cap, etc.

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Application Procedure

• Must apply to DHEC to get Statement to include
  with State Tax Forms
• DOR also has their Form
• Application to DHEC by end of year
• 150.00 application processing fee
• Must submit verification ofexpenses from
  independent CPA

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Other Incentives

• Job tax Credits Fee In Lieu of Taxes
• Property Tax Exemptions
• All Require Certificate of Completion issued to
  NRP on the property
• Law is silent on whether party getting the
  incentives must be enrolled in the contract
• Award of incentives depend on decisions of Local
  County Governments and / or SC Department of
  Revenue

Cannot be RP
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Job Tax Credits

• Job Tax Credits offered to various types of
  industries based on
• Type of Job
• Number of jobs created
• Area of state
• Normal Job Tax Credits
• Range from 1,500 to 8,000 per job created
• Credit available for 5 years,
• Carried forward for 15

County Specific Requirements
As few as two new jobs may qualify
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Brownfields IncentiveJob Tax Credits

• Each Qualifying job is allowed an extra 1000 in
  Job Tax Credits if created on Property issued a
  NRP Certificate of Completion

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Fee In Lieu of Property Taxes

• Law allows Corporations to negotiate payment of
  a lower fee instead of paying property taxes.
• Normally Must invest at least 5,000,000 on
  property

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Brownfields IncentiveFee in Lieu

• Threshold Investment lowered to 1,000,000 if a
  Property issued a NRP Certificate of Completion
• The investment amount includes amounts expended
  by the corporation and affiliates under the VCC

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Brownfields IncentiveProperty Tax Exemption

• County Governments may exempt Property issued a
  NRP Certificate of Completion from property
  taxes for five years
• Cannot Exempt Municipal Taxes or School
  District Taxes