S.C. Code Ann. § 12-14-60 – Investment tax credit

(A)
1. (1) There is allowed an economic impact zone investment tax credit against the tax imposed pursuant to Chapter 6 of this title for any taxable year in which the taxpayer places in service economic impact zone qualified manufacturing and productive equipment property.
2. (2) The amount of the credit allowed by this section is equal to the aggregate of:
  three-year property one percent of total aggregate bases for all
  three-year property that qualifies;
  five-year property two percent of total aggregate bases for all
  five-year property that qualifies;
  seven-year property three percent of total aggregate bases for all
  seven-year property that qualifies;
  ten-year property four percent of total aggregate bases for all
  ten-year property that qualifies;
  fifteen-year property five percent of total aggregate bases for all
  or greater fifteen-year or greater property that
  qualifies.
  For purposes of this section, whether property is three-year property, five-year property, seven-year property, ten-year property, or fifteen-year property is determined based on the applicable recovery period for such property under Section 168(e) of the Internal Revenue Code.
(B) For purposes of this section:
1. (1) "economic impact zone qualified manufacturing and productive equipment property" means any property:
  1. (a) which is used as an integral part of manufacturing or production, or used as an integral part of extraction of or furnishing transportation, communications, electrical energy, gas, water, or sewage disposal services in the economic impact zone;
  2. (b) which is tangible property to which Section 168 of the Internal Revenue Code applies;
  3. (c) which is Section 1245 property (as defined in Section 1245(a)(3)of the Internal Revenue Code); and
  4. (d)
    1. (i) the construction, reconstruction, or erection of which is completed by the taxpayer in the economic impact zone; or
    2. (ii) which is acquired by the taxpayer if the original use of such property commences with the taxpayer inside the economic impact zone.
2. (2) In the case of any computer software which is used to control or monitor a manufacturing or production process inside the economic impact zone and with respect to which depreciation (or amortization in lieu of depreciation) is allowable, the software must be treated as qualified manufacturing and productive equipment property.
(C) This section does not apply to any property to which the other tax credits would apply unless the taxpayer elects to waive the application of the other credits to the property.
(D) Unused credit allowed pursuant to this section may be carried forward for ten years from the close of the tax year in which the credit was earned.
(E) If during any taxable year and before the end of applicable recovery period for such property as determined under Section 168(e) of the Internal Revenue Code, the taxpayer disposes of or removes from the economic impact zone, economic impact zone qualified manufacturing and productive equipment property, then the tax due under Chapter 6 by the taxpayer for the current taxable year must be increased by an amount of any credit claimed in prior years with respect to such property determined by assuming the credit is earned ratably over the useful life of the property and recapturing pro rata the unearned portion of the credit.
(F) For South Carolina income tax purposes, the basis of the economic impact zone qualified manufacturing and productive equipment property must be reduced by the amount of any credit claimed with respect to the property. If a taxpayer is required to recapture the economic impact zone investment tax credit in accordance with subsection (E), the taxpayer may increase the basis of the property by the amount of any basis reduction attributable with claiming the economic impact zone investment tax credit in prior years. The basis must be increased in the year in which the credit is recaptured.
(G) Credits claimed under this section for taxable years beginning after 1997 for investments made before July 1, 1998, may not reduce a taxpayer's state income tax liability by more than fifty percent.
(H) The credit allowed by this section for investments made after June 30, 1998, is limited to no more than five million dollars for an entity subject to the license tax as provided in Section 12-20-100.
(I) Notwithstanding any amendments to Section 12-14-60 of the 1976 Code enacted in the 1998 session of the General Assembly reducing the percentage amount of the economic impact zone investment tax credit or otherwise reducing the amount of the credit allowed, in the case of investments at a project operated by a company pursuant to a revitalization agreement entered into between the company and the South Carolina Advisory Council for Economic Development effective on or before July 1, 1996, the provisions of Section 12-14-60 in existence prior to the 1998 amendment shall apply.