What South Carolina tax law changes did the 2022 legislative session make, as summarized in SC Information Letter #22-15?

Plain-English summary

SC Information Letter #22-15 is the Department of Revenue's annual summary of the tax and regulatory law changes South Carolina's General Assembly enacted during its 2022 legislative session. It is a guide, not an interpretation — the Department expressly says to read the full text of each act for the details — and it sorts the changes into four categories: (1) income, bank, withholding, and corporate license-fee taxes; (2) property taxes; (3) sales and use taxes; and (4) miscellaneous. It also separates permanent law changes from temporary budget "provisos," which are effective only for the July 1, 2022–June 30, 2023 fiscal year and expire June 30, 2023 unless reenacted.

The headline is the Comprehensive Tax Cut Act of 2022 (Act 228). It:

• Lowered the top individual income tax rate from 7% to 6.5% for tax year 2022, with further one-tenth-of-a-percent annual reductions toward 6% over at least six years if revenue targets are met (§ 12-6-510).
• Collapsed the six individual income tax brackets into three for tax years after 2021 — a 0% bracket, a 3% bracket, and a top 6.5% bracket (indexed for inflation).
• Created a one-time 2022 rebate equal to a taxpayer's 2021 South Carolina income tax liability, capped at $700 (covered in more detail in SC Information Letter #22-18).

Other significant 2022 changes the letter describes include:

• Internal Revenue Code conformity updated to the Code as of December 31, 2021, adopting the American Rescue Plan Act of 2021 and the Infrastructure Investment and Jobs Act (Act 201, § 12-6-40).
• A full military retirement income deduction at any age (Act 156, § 12-6-1171).
• New apprenticeship hiring credits for veterans and formerly incarcerated individuals, and solar energy property credit amendments (Act 237).
• Sales and use tax changes such as applying the maximum sales tax to watercraft motors, a new County Green Space local sales and use tax, and the SCATE agriculture exemption card fee proviso.
• Property tax changes including expanded disabled-veteran/first-responder exemptions tied to "heirs' property" and "qualified surviving spouses," and a partial-exemption increase for manufacturing property.

What this means for you

Treat this letter as a map, not the territory — it tells you which 2022 acts touched your taxes and where to look, but the operative rules are in the acts and code sections themselves. For most individuals, the practical takeaways are the lower top rate and simpler bracket structure starting with 2022 returns, and the one-time rebate paid in 2022. Businesses should note the updated IRC conformity date, the new apprenticeship and infrastructure license-fee credits, and the solar energy property credit changes. Because many items are temporary provisos that expired June 30, 2023 unless reenacted, confirm the current status of any proviso before relying on it for a later year.

Common questions

Q: What was the single biggest change in South Carolina's 2022 tax legislation?
A: The Comprehensive Tax Cut Act of 2022 (Act 228) — it cut the top individual income tax rate from 7% to 6.5% for 2022 (phasing toward 6%), collapsed six brackets into three, and funded a one-time rebate of up to $700.

Q: Does this letter itself change the law or interpret it?
A: No. The Department states it is a plain-language summary of the legislation's main points, not an official interpretation, and that you should refer to the full text of each act for specific requirements.

Q: Which changes are permanent and which expire?
A: Permanent law changes stay in effect until amended, but "temporary provisos" are part of the annual state budget and were effective only for fiscal year July 1, 2022–June 30, 2023, expiring June 30, 2023 unless the General Assembly reenacted them.

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/IL22-15.pdf

Original ruling text

STATE OF SOUTH CAROLINA

DEPARTMENT OF REVENUE
300A Outlet Pointe Blvd., Columbia, South Carolina 29210
P.O. Box 125, Columbia, South Carolina 29214-0575

SC INFORMATION LETTER #22-15
SUBJECT:

Tax Legislative Update for 2022

DATE:

September 7, 2022

AUTHORITY:

S.C. Code Ann. Section 12-4-320 (2014)
S.C. Code Ann. Section 1-23-10(4) (2005)
SC Revenue Procedure #09-3

SCOPE:

An Information Letter is a written statement issued to the public to announce
general information useful in complying with the laws administered by the
Department. An Information Letter has no precedential value.

Attached is a brief summary of most of the significant changes in tax and regulatory laws
enacted during the past legislative session. The summary is divided into categories, by subject
matter, as indicated below.
LEGISLATION
Numeric List of Bills by Subject Matter .......................................................

PAGE #
3

Summary of Legislation by Category:

1. Income Taxes, Bank Taxes, Withholding, and Corporate License Fees
   Legislation................................................................................................
   Reenacted or Revised Temporary Provisos .............................................
   Reminders – Prior Legislation Phased in or Effective in 2022 and
   Thereafter ............................................................................
2. Property Taxes and Fees in Lieu of Property Taxes
   Legislation................................................................................................
   Reenacted Temporary Provisos ...............................................................
   Reminders – Prior Legislation Phased in or Effective in 2022 and
   Thereafter ............................................................................
3. Sales and Use Taxes
   Legislation................................................................................................
   Reenacted Temporary Provisos ...............................................................

8
20
22
29
32
35
36
39

4. Miscellaneous
Miscellaneous Tax Legislation ................................................................
Reenacted Temporary Provisos ...............................................................
Reminders – Prior Legislation Phased in or Effective in 2022 and
Thereafter ............................................................................
Temporary Provisos (New and Reenacted) – Numeric List........................

41
42
45
48

DISCLAIMER:
This is intended to be a summary of the main points of the legislation; it is not an interpretation
by the Department. It is written in general terms for widest possible use and may not contain all
the specific requirements or provisions of authority. It is intended as a guide only, and the
application of its contents to specific situations will depend on the particular circumstances
involved. It does not represent official Department policy. Please refer to the full text of the
legislation for specific details and requirements.
There may be instances where some tax or incentive related legislation briefly summarized is
under the jurisdiction of another state agency or political subdivision and not the Department. In
such cases, questions concerning these provisions should be made directly to the agency or
political subdivision having primary responsibility for the administration of these acts.
Note Regarding Act No. 236: A petition has been filed with the South Carolina Supreme Court
to review the constitutionality of the retroactive application of Act No. 236, Section 2.E. relating
to the application of the Act to any “service or user fee” in Section 2 imposed by a local
governing body after December 31, 1996. Act No. 236, Sections 1 and 3, contain property tax
provisions. The Department plans to provide updates of any property tax legislation in Act No.
236 summarized below that is affected in a final court decision regarding Act No. 236.
TEXT OF LEGISLATION:
A complete copy of the legislation discussed can be obtained from the South Carolina
Legislature’s website at scstatehouse.gov.

2

LIST OF BILLS BY SUBJECT CATEGORY
A list of significant changes in tax laws (both permanent and temporary) enacted during the 2022
legislative session is provided below. Temporary provisos are enacted in the State budget and are
only effective for the State fiscal year (July 1 – June 30). Unless reenacted, temporary provisos
expire on June 30, 2023.
Also included are reminders of provisions which were enacted in a prior year but are being
phased in or are effective in 2022 and thereafter. These provisions are indicated as “reminders”
in the chart below.
This list is divided by subject matter with the bills listed in numeric order.
INCOME TAXES, BANK TAXES, WITHHOLDING, and CORPORATE LICENSE FEES
BILL #
ACT # SUBJECT
76, Sec. 1
138 of Energy Efficient Manufactured Home – Credit Extended –
2020
Reminder
314
45 of
Service as Preceptor for Clinical Rotations – New Credit and
2019
New Deduction – Reminder
635, Sec. 4
172
Industry Partnership Fund Credit – Credit Amounts Amended
901, Secs. 1, 2, and 7 237
Solar Energy Property Credit – Amendments and New Credit
Repeal Date
901, Sec. 5
237
Registered Apprenticeship Credit for Hiring Veterans of the
Armed Forces – New Credit
901, Sec. 5
237
Registered Apprenticeship Credit for Hiring Formerly
Incarcerated Individuals – New Credit
901, Sec. 6
237
Job Development and Job Retraining Credits Qualification –
New “Related Person” Provision
1087, Secs. 1 and 2 228
Individual, Estate, and Trust Income Tax – Top Marginal Rate
Reduction Phase-Down Beginning Tax Year 2022
1087, Secs. 1 and 2 228
Individual, Estate, and Trust Income Tax Brackets – Brackets
Collapsed to Three for Tax Years Beginning After 2021
1087, Sec. 4
228
2.5% Marginal Tax Rate Reduction in 2007 – To be Repealed
1087, Sec. 6
228
One-Time Individual Income Tax Refund (Rebate) in 2022 –
Based on Tax Year 2021 SC 1040 Income Tax Liability
3247
156
Military Retirement Income Deduction – Expanded to Full
Deduction at Any Age
Military Retirement Earned Income Deduction – Repealed
3340
184
License Fee (Tax) Credit for Infrastructure – Amendments

3

INCOME TAXES, BANK TAXES, WITHHOLDING, and CORPORATE LICENSE FEES
(CONTINUED)
BILL #
ACT # SUBJECT
3516, Sec. 15
40 of
Motor Fuel User Fee Credit – New Refundable Credit –
2017
Reminder
3516, Sec. 16
40 of
South Carolina Earned Income Credit – New Credit – Reminder
2017
3516, Sec. 17
40 of
Two-Wage Earner Credit – Credit Increased – Reminder
2017
5057, Sec. 1
201
Internal Revenue Code Conformity (Including the American
Rescue Plan Act of 2021 and Infrastructure Investment and Jobs
Act of 2021)
5057, Sec. 2
201
Economic Injury Disaster Loans and Restaurant Revitalization
Grants in Federal American Rescue Plan Act of 2021 – SC Tax
Treatment
5075, Secs. 1.A. and 202
Low Income Housing Credit – Amendments
1.C.
5150, Part IB, Sec. 239
Teaching Supplies and Materials – Revised Reimbursement
1A, Proviso 1A.9
Amount; Reimbursement Amount Not Taxable or Refundable
Income Tax Credit – Reenacted and Revised Temporary
Proviso
5150, Part IB, Sec. 239
Teacher of the Year Awards – Not Subject to South Carolina
1A, Proviso 1A.10
Income Tax – Reenacted Temporary Proviso
5150, Part IB, Sec. 239
Governor’s Law Enforcement Officer of the Year Awards – Not
63, Proviso 63.10
Subject to South Carolina Income Tax – New Temporary
Proviso
5150, Part IB, Sec. 239
Renewable Fuel Credit – Placed in Service Date Extended –
109, Proviso 109.13
Reenacted Temporary Proviso
5150, Part IB, Sec. 239
Retail Facilities Revitalization Act – Repeal of Act Suspended –
117, Proviso
Reenacted Temporary Proviso
117.114
5150, Part IB, Sec. 239
Credit for Rehabilitation of Certified Historic Structure – Waiver
117, Proviso
of Fee during Fiscal Year 2022 – 2023 – New Temporary
117.170
Proviso
5150, Part IB, Sec. 239
Consumer Protection Services – Individual Income Tax
118, Proviso 118.10
Deduction – Reenacted Temporary Proviso

4

PROPERTY TAXES
BILL #
ACT #
233, Sec. 1
236
233, Sec. 3.A.

236

233, Sec. 3.B.

236

648, Sec. 5

106 of
2021
228
239

1087, Sec. 5
5150, Part IB, Sec.
1, Proviso 1.46

5150, Part IB, Sec. 239
92D, Proviso 92D.1
5150, Part IB, Sec. 239
109, Proviso 109.11
5150, Part IB, Sec. 239
113, Proviso 113.7
5150, Part IB, Sec. 239
117, Proviso 117.37
5150, Part IB, Sec. 239
117, Proviso
117.114
5144
203
SALES and USE TAXES
BILL #
ACT #
152
166
901, Sec. 3

237

901, Sec. 4
3948

237
189

5150, Part IB, Sec.
44, Proviso 44.10

239

SUBJECT
Property Tax Exemption for Disabled Veterans, Police Officers
and Firefighters – Amendments Relating to “Heirs’ Property”
and “Qualified Surviving Spouses”
Property Valuation Adjustment for Flooding, Hurricane, or Wind
Event
Certain Farm Buildings and Agricultural Structures – Now
Exempt
Consolidation of Clarendon County School Districts 2 and 4 –
Millage – Reminder
Manufacturing Property – Increase in Partial Exemption
Index of Taxpaying Ability – Imputed Value for OwnerOccupied Residential Property – Reenacted Temporary
Proviso
Improvements to Property Damaged by Catastrophic Weather
Event – Time for Improvements for Eligible Events – Reenacted
Temporary Proviso
Notification of Protest to Affected County and School District –
Reenacted Temporary Proviso
Agricultural Use Exemption for Timberland – Impact of
Additional County Requirements – Reenacted Temporary
Proviso
Personal Property Tax Relief Fund – Reenacted Temporary
Proviso
Retail Facilities Revitalization Act – Repeal of Act Suspended –
Reenacted Temporary Proviso

Rural Telephone Exemption – Amended

SUBJECT
County Green Space Sales Tax Act – New Local Sales and Use
Tax
Filing Requirement for Multi-Location Returns – Sales Tax on
Accommodations
Watercraft Motor Sales – Maximum Tax Now Applies
Capital Projects and Local Transportation Sales and Use Taxes –
Limitations on Taxes Imposed in a County – Amended
South Carolina Agriculture Tax Exemption Card (SCATE Card)
– Fee Authorized for Card – New Temporary Proviso

5

SALES and USE TAXES (CONTINUED)
BILL #
ACT # SUBJECT
5150, Part IB, Sec. 239
Navy Base Intermodal Facility – Distribution Facility Eligibility
50, Proviso 50.20
– Reenacted Temporary Proviso
5150, Part IB, Sec. 239
Clothing Used in Perishable Prepared Food Manufacturing
109, Proviso 109.12
Facilities – Reenacted Temporary Proviso
5150, Part IB, Sec. 239
Private Schools – Use Tax Exemption – Reenacted Temporary
117, Proviso 117.36
Proviso
5150, Part IB, Sec. 239
Respiratory Syncytial Virus Medicines Exemption – Effective
117, Proviso 117.54
Date – Reenacted Temporary Proviso
5150, Part IB, Sec. 239
Viscosupplementation Therapies – Sales and Use Tax Suspended
117, Proviso 117.58
– Reenacted Temporary Proviso
5150, Part IB, Sec. 239
Agribusiness Facilities – Material Handling and Construction
117, Proviso 117.146
Material Exemptions – Reenacted Temporary Proviso
MISCELLANEOUS
BILL #
ACT # SUBCATEGORY SUBJECT
Administrative
and Procedural
5150, Part IB, Secs. 239
3% Reduction on Interest Rate on Tax
41 and 117, Provisos
Refunds – Reenacted Temporary Proviso
41.2 and 117.82
5150, Part IB, Sec. 239
Voluntary Website Posting of Tax Return
109, Proviso 109.6
Information for Candidates and Gubernatorial
Appointees – Reenacted Temporary Proviso
5150, Part IB, Sec. 239
Certain License or Permit Applications – New
109, Proviso 109.14
Electronic Filing Option under Penalties of
Perjury – Reenacted Temporary Proviso
5150, Part IB, Sec. 239
Advance Referendum Notification by Election
109, Proviso 109.15
Commission to SCDOR – Reenacted
Temporary Proviso
Miscellaneous
Taxes
3516, Sec. 2
40 of
Motor Fuel User Fee – Rate Change –
2017
Reminder
4161
190
Machines and Devices Prohibited by Law –
Exception Added
5150, Part IB, Sec. 1, 239
Local Government School Buses – Motor Fuel
Proviso 1.14
User Fee Exemption – Reenacted
Temporary Proviso
6

MISCELLANEOUS (CONTINUED)
BILL #
ACT # SUBCATEGORY SUBJECT
5150, Part IB, Sec. 239
Nursing Home Bed Franchise Fee –
33, Proviso 33.10
Suspension – Reenacted Temporary Proviso
5150, Part IB, Sec. 239
Admissions Tax Rebate – Motorsports,
118, Proviso 118.7
Tennis, and Soccer Facilities – Reenacted
Temporary Proviso
Other Items
3516, Sec. 3
40 of
Motor Carrier Road Tax – Rate Change –
2017
Reminder
4431
176 of
South Carolina Business License Tax
2020
Standardization Act – New – Reminder

7

INCOME TAXES, BANK TAXES, WITHHOLDING, AND
CORPORATE LICENSE FEES
House Bill 5057, Section 1 (Act No. 201)
Internal Revenue Code Conformity (Including the American Rescue Plan Act of 2021 and
Infrastructure Investment and Jobs Act of 2021)
Conformity Date. Code Section 12-6-40(A)(1)(a) has been amended, except as otherwise
provided, to update South Carolina’s income tax laws to conform to the Internal Revenue Code
of 1986 through December 31, 2021, and includes the effective date provisions contained
therein.
Extension of Federal Expiring Provisions. Code Section 12-6-40(A)(1)(c) provides that if during
2022 the federal government extends, without otherwise amending, Internal Revenue Code
provisions that expired on December 31, 2021, then these sections or portions of sections which
have been adopted by South Carolina will be extended in the same manner that they are for
federal income tax purposes.
Effective Date: May 16, 2022
House Bill 5057, Section 2 (Act No. 201)
Economic Injury Disaster Loans and Restaurant Revitalization Grants in Federal
American Rescue Plan Act of 2021 – SC Tax Treatment
For tax year 2021, the Federal American Rescue Plan Act of 2021, Public Law 117-2 (enacted
March 11, 2021) in Section 9672 excluded from federal gross income “targeted economic injury
disaster loan advances” received from the Small Business Administration, and in Section 9673
excluded from federal gross income “restaurant revitalization grants” received from the Small
Business Administration. In an uncodified provision, Act No. 201 provides that for tax year
2021, these loan advances and revitalization grants are excluded for South Carolina income tax
purposes to the extent they are excluded from gross income for federal income tax purposes.
Effective Date: May 16, 2022

8

Senate Bill 1087, Sections 1 and 2 (Act No. 228)
Individual, Estate, and Trust Income Tax – Top Marginal Rate Reduction Phase-Down
Beginning Tax Year 2022
The “Comprehensive Tax Cut Act of 2022,” provides that South Carolina’s top marginal tax rate
in Code Section 12-6-510, applicable to individuals, estates, trusts, and any other entity except
entities otherwise taxed or exempted from tax in Code Sections 12-6-530 through 12-6-550 (e.g.,
corporations, electing small business trusts, banks, insurance companies, and other tax exempt
organizations, such as organizations under Internal Revenue Code Sections 501 through 528),
will be lowered from 7% to 6% over a minimum of six years.
New Code Section 12-6-510(B) provides that the top marginal rate will be 6.5% beginning in tax
year 2022. This 6.5% marginal rate will then decrease by one-tenth of one percent each tax year
thereafter until the top marginal tax rate is 6%, provided certain revenue conditions in Code
Section 12-6-510(B)(3) are met.
The chart below illustrates the new top marginal tax rate during the phase-down period for tax
year 2022 and the top marginal tax rates for 2023 through 2027, if the revenue requirements are
met each of those years. Note: All reductions are permanent and cumulative.
Tax Year
2022
2023
2024
2025
2026
2027*

Top Marginal Tax Rate Phase-down
6.5% - Permanent reduction
6.4%
6.3%
6.2%
6.1%
6.0%*

*The new 6.5% tax rate phase-down for tax year 2022 will be reduced one-tenth of one percent
in each tax year beginning in 2023 if general fund revenues are projected by the Revenue and
Fiscal Affairs Office to increase by at least 5% in the fiscal year that begins during the tax year.
The forecast in effect on February 15th of the current fiscal year is the final forecast to determine
the percentage adjustment.
Effective Date: June 17, 2022, and first applies to tax years beginning after 2021.
Senate Bill 1087, Sections 1 and 2 (Act No. 228)
Individual, Estate, and Trust Income Tax Brackets – Brackets Collapsed to Three for Tax
Years Beginning After 2021
The “Comprehensive Tax Cut Act of 2022” provides that South Carolina’s six individual income
tax brackets in Code Section 12-6-510 will be collapsed into three tax brackets for tax years after
2021.
9

New Code Section 12-6-510(B) establishes the following three collapsed individual income tax
brackets for tax years after 2021.
New Tax Brackets for Tax Years 2022 and Thereafter
Tax Bracket #1
$0 to $3,199
Tax Bracket #2
$3,200 to $16,039
Tax Bracket #3
$16,040 and up
Code Section 12-6-520 continues to provide that these tax brackets will be indexed for inflation
each December. The brackets, as adjusted, will apply for tax years beginning in the succeeding
calendar year.
For the 2022 tax year the new tax brackets, indexed for inflation, and tax computations for each
bracket are:
New Tax Brackets
for Tax Year 2022
Tax Bracket #1

Bracket Amounts for
Tax Year 2022
$0 to $3,199

Tax Bracket #2
Tax Bracket #3

$3,200 to $16,039
$16,040 and up

Compute the tax as follows for each
bracket amount
0% times the amount (i.e., exempt
from tax)
3% times the amount minus $96
*6.5% times the amount minus $658

*Note: For 2022, the top marginal tax rate is 6.5%; the 0% and the 3% tax rates in brackets #1
and #2 do not change.
Effective Date: June 17, 2022, and first applies to tax years beginning after 2021.
Senate Bill 1087, Section 4 (Act No. 228)
2.5% Marginal Tax Rate Reduction in 2007 – To be Repealed
Code Section 12-6-515, which lowered South Carolina’s 2.5% marginal tax rate for individuals,
estates, and trusts to 0% effective in 2007, is no longer necessary with the updates to the
marginal tax rates in Code Section 12-6-515 as amended, and will be repealed.
Effective Date: This repeal takes effect on January 1 of the first tax year in which the new
provisions of Code Section 12-6-510(B) are fully phased-down and the top
marginal rate equals 6%. See Act No. 228, Sections 1 and 2, above.

10

Senate Bill 1087, Section 6 (Act No. 228)
One-Time Individual Income Tax Refund (Rebate) in 2022 – Based on Tax Year 2021 SC
1040 Income Tax Liability
In the “Comprehensive Tax Cut Act of 2022,” the General Assembly appropriated $1 billion to a
Taxpayer Rebate Fund to be used to provide a one-time rebate for each 2021 individual income
tax return that reports a South Carolina individual income tax liability.
The rebate is equal to the amount of tax liability on the return, except that if a return has $700 or
more of tax liability, the rebate is $700. However, if the Department determines that sufficient
funds exist, the maximum $700 rebate amount may be increased so that all returns with a tax
liability over the increased maximum receive the same rebate amount.
The Department must issue the individual income tax refund (rebate) by December 31, 2022.
Note: The Department plans to publish additional rebate information in a Department
Information Letter and on the Department’s website.
Effective Date: June 17, 2022
House Bill 3247 (Act No. 156)
(See also Senate Bill 1087, Section 3 (Act No. 228))
Military Retirement Income Deduction – Expanded to Full Deduction at Any Age
Earned Income Offset by Military Retirement at Any Age – Repealed
Code Section 12-6-1171(A), providing income tax deductions for military retirees, has been
amended to allow an individual taxpayer to deduct all military retirement income that is included
in South Carolina taxable income, regardless of age.
This full military retirement income deduction replaces the following two deductions for military
retirees: (1) the deduction of up to $17,500 for an individual of any age with both earned income
and military retirement income and (2) the deduction of up to $30,000 for an individual age 65 or
older who has military retirement income. These deductions were provided in Code Section 126-1171(A)(1) and (A)(2), respectively.
Code Section 12-6-1171(B) and (C) Unchanged. The provisions of Code Section 12-6-1171(B)
and (C) remain unchanged, and continue to apply to the full military retirement income
deduction. These provisions are:
• Definition of Retirement Income. The term “retirement income,” as used in this section,
means the total of all otherwise taxable income not subject to a penalty for premature
distribution received by the taxpayer or the taxpayer’s surviving spouse in a taxable year
from a qualified military retirement plan. For purposes of a surviving spouse, “retirement
11

•

income” also includes a retirement benefit plan and dependent indemnity compensation
related to the deceased spouse’s military service.
Military Surviving Spouse Rules. A surviving spouse receiving military retirement income
that is attributable to the deceased spouse shall apply this deduction in the same manner that
the deduction applied to the deceased spouse. If the surviving spouse also has other
retirement income, an additional retirement deduction is allowed.

“General” Retirement and Age 65 and Older Deductions Unchanged. Code Section 12-6-1170
continues to allow an income tax deduction for: (1) individuals of any age receiving retirement
income to reduce taxable retirement income by up to $3,000 through age 64 and up to $10,000 at
age 65 and thereafter and (2) individuals ages 65 and older to reduce taxable income of any type
by up to $15,000 or $30,000, depending on marital status and age.
• Special Rules for Military. Code Section 12-6-1170(C) remains unchanged with respect to
the following provisions and exceptions for military retirees and surviving spouses of
military retirees claiming a deduction under both Code Section 12-6-1171 and Code Section
12-6-1170:
a. Reduction Provisions for Taxpayers Claiming Deduction Under Code Sections 12-6-1170
and 12-6-1171 Unchanged. If a taxpayer claims a deduction under Code Section 12-61171, then the deduction allowed under Code Section 12-6-1170 must be reduced by the
amount the taxpayer deducts under Code Section 12-6-1171. This reduction does not
apply if the deduction claimed under Code Section 12-6-1171 is claimed by a surviving
spouse. Code Section 12-6-1170(C)(1).
b. Reduction and Tracing Required by Military Retiree. In the case of married taxpayers
who file a joint federal income tax return, this reduction applies to each individual
separately, so that the reduction only applies to the amount the individual claiming the
deduction pursuant to Code Section 12-6-1171 otherwise could have claimed under Code
Section 12-6-1170 if the individual had not filed a joint return. Code Section 12-61170(C)(2).
Effective Date: May 13, 2022, and first applies to tax years beginning after 2021.
House Bill 5150, Part IB, Section 63, Proviso 63.10 (Act No. 239)
Governor’s Law Enforcement Officer of the Year Awards – Not Subject to South Carolina
Income Tax
This temporary proviso provides for an advisory committee created by the Department of Public
Safety to select a state law enforcement officer of the year, a county law enforcement officer of
the year, and a municipal law enforcement officer of the year. Each winner shall be recognized
by the Office of the Governor and receive a $10,000 award to be distributed by the department.
These awards are not subject to South Carolina income tax.
Effective Date: This temporary proviso is effective for State fiscal year July 1, 2022 through
June 30, 2023. It will expire June 30, 2023, unless reenacted by the General
Assembly in the next legislative session.
12

Senate Bill 901, Section 5 (Act No. 237)
Registered Apprenticeship Credit for Hiring Veterans of the Armed Forces – New Credit
Code Section 12-6-3720 has been added to establish a new tax credit for employers that hire
veterans of the Armed Forces of the United States as new employees in a registered
apprenticeship program. The credit may be taken against the income taxes imposed under
Chapter 6, Title 12; the bank tax imposed under Chapter 11, Title 12; the savings and loan
association tax imposed under Chapter 13, Title 12; the corporate license tax imposed under
Chapter 20, Title 12; and insurance premium taxes imposed under Chapter 7, Title 38.
Credit Amount and Limitations. The tax credit is earned in the year in which the veteran first
completes the twelfth consecutive month of employment with the taxpayer. The credit is earned
in the same manner and on the same schedule in the second and third year of employment. In the
first year in which the credit is earned, the amount of the credit is $3,000 for each eligible
employee. The credit is $2,500 in the second year and $1,000 in the third year, if the qualifying
individual remains employed. The credit may not be claimed beyond the third year.
The total amount of the tax credit for a taxable year may not exceed the taxpayer’s tax liability.
There is no credit carryover.
Other Credit Requirements. Other requirements of the credit are:

1. The credit applies to qualifying employees hired after 2021 and before 2027. Code Section
   12-6-3720(A) and (E). Code Section 12-6-3720(G) provides that nothing in this section may
   be construed to allow an employer to claim this credit for a veteran if the veteran was hired
   before the effective date of this section.
2. The tax credit may only be claimed for an eligible individual once, regardless of the
   employer.
3. A “veteran” qualifying for the credit is “a person who served on active duty in the Armed
   Forces of the United States and who, within three years of being hired in a qualifying
   apprenticeship program, was honorably discharged or released from such service due to a
   service-connected disability.”
4. The Department shall consult with the Department of Commerce, Apprenticeship Carolina of
   the South Carolina Technical College System, and any other agency or entity necessary to
   establish a process by which employers are aware of an individual’s eligibility for the credit.
5. The apprenticeship program must have been validated by the United States Department of
   Labor.
6. “Full-time” has the same meaning as provided in Code Section 12-6-3360, the job tax credit
   provision.
   Effective Date: June 22, 2022

13

Senate Bill 901, Section 5 (Act No. 237)
Registered Apprenticeship Credit for Hiring Formerly Incarcerated Individuals – New
Credit
Code Section 12-6-3710 has been added to establish a new tax credit for employers that hire
formerly incarcerated individuals as new employees in a registered apprenticeship program. The
credit may be taken against the income taxes imposed under Chapter 6, Title 12; the bank tax
imposed under Chapter 11, Title 12; the savings and loan association tax imposed under Chapter
13, Title 12; the corporate license tax imposed under Chapter 20, Title 12; and insurance
premium taxes imposed under Chapter 7, Title 38.
Credit Amount and Limitations. The tax credit is earned in the year in which the formerly
incarcerated individual first completes the twelfth consecutive month of employment with the
taxpayer. The credit is earned in the same manner and on the same schedule in the second and
third year of employment. In the first year in which the credit is earned, the amount of the credit
is $3,000 for each eligible employee. The credit is $2,500 in the second year and $1,000 in the
third year, if the qualifying individual remains employed. The credit may not be claimed beyond
the third year.
The total amount of the tax credit for a taxable year may not exceed the taxpayer’s tax liability.
There is no credit carryover.
Other Credit Requirements. Other requirements of the credit are:

1. The credit applies to qualifying employees hired after 2021 but before 2027. Code Section
   12-6-3710(A) and (E). The credit may not be claimed for a formerly incarcerated individual
   if the individual was hired before 2022. Code Section 12-6-3710(G).
2. The tax credit may only be claimed for an eligible individual once, regardless of the
   employer.
3. An “incarcerated individual” qualifying for the credit is an individual that, within three years
   of being hired in a qualifying apprenticeship program, was held in a state or county prison,
   jail, or detention center for at least 90 consecutive days. However, an incarcerated individual
   does not include an individual incarcerated for a violent crime set forth in Code Section 16-160, unless such individual received a pardon for the offense or unless the only disqualifying
   violent crime resulted in a sentence of ten years or less under Code Sections 44-53-370(E) or
   44-53-375(C).
4. The Department shall consult with the Department of Commerce, Apprenticeship Carolina of
   the South Carolina Technical College System, and any other agency or entity necessary to
   establish a process by which employers are aware of an individual’s eligibility for the credit.
5. The apprenticeship program must have been validated by the United States Department of
   Labor.
   14

6. “Full-time” has the same meaning as provided in Code Section 12-6-3360, the job tax credit
provision.
Effective Date: June 22, 2022
Senate Bill 901, Sections 1, 2, and 7 (Act No. 237)
Solar Energy Property Credit – Amendments and New Credit Repeal Date
Act No. 77 of 2019 added Code Section 12-6-3775 to provide for an income tax credit equal to
25% of the cost, including the installation cost, of qualifying nonresidential “solar energy
property” located in South Carolina. Act No. 77 contained a repeal provision stating the credit
would be repealed on December 31, 2021; however, if the credit was earned before the repeal
date, then the credit can continue to be claimed. On June 28, 2022, Code Section 12-6-3775 was
retroactively reenacted as it existed on December 31, 2021, and was also amended effective for
specifically stated tax years explained below. Act No. 237 of 2022 postpones the repeal of the
credit until December 31, 2024.
Two of the amendments to Code Section 12-6-3775 in Act No. 237, and their applicability to a
taxpayer earning and claiming a portion of the credit before 2022 and to a taxpayer earning the
credit after 2021, are summarized below. Other provisions and credit requirements contained in
Code Section 12-6-3775 were unchanged and remain applicable to all taxpayers.

1. Date Credit is Claimed – Amended
   For a solar energy credit earned after 2021. Code Section 12-6-3775(B)(2), as amended,
   provides that the credit is earned in the year in which the qualifying solar energy property is
   placed in service but must be taken in five equal annual installments, beginning within three
   years of the year in which the property was placed in service. Any unused credit is carried
   forward five years from the year that the credit was able to be taken.
   For a solar energy credit taken before 2022. Code Section 12-6-3775(B)(2), as retroactively
   reinstated, continues to provide that the credit is earned in the year in which the solar energy
   property is placed in service but must be taken in five equal annual installments, beginning in
   the year the property is placed in service. Any unused credit is carried forward five years
   from the year that the credit was able to be taken.
2. Maximum Credit Amount – Amended
   For a solar energy credit earned after 2021. Code Section 12-6-3775(D), as amended,
   provides that a credit for each installation of solar energy property placed in service may not
   exceed $5 million. The total amount of credits available to be taken for all taxpayers in each
   tax year continues to be limited to an aggregate of $2.5 million.

15

For a solar energy credit taken before 2022. Code Section 12-6-3775(D), as retroactively
reinstated, continues to provide that a credit for each installation of solar energy property
placed in service may not exceed $2.5 million.
The third amendment to Code Section 12-6-3775 in Act No. 237, the addition of Code
Section 12-6-3775(G) and its applicability to credits earned for a solar energy property
placed in service after 2019, is summarized below.

3. Partnership Allocation of Credit – New Code Section 12-6-3775(G)
   For a solar energy credit earned after 2019. Code Section 12-6-3775(G) has been added to
   provide that if the taxpayer is a partnership or a limited liability company taxed as a
   partnership, the credit, including any unused credit amount carried forward, may be passed
   through to the partners or members and may be allocated among any of the partners or
   members on an annual basis, including without limitation, an allocation of the entire credit or
   unused carryforward to any partner or member who was a partner or member at any time
   during the year in which the credit or unused carryforward is allocated. The allocation must
   be allowed without regard to any provision of the Internal Revenue Code or regulations
   promulgated pursuant thereto, that may be interpreted as contrary to the allocation including,
   without limitation, the treatment of the allocation as a disguised sale.
   For a solar energy credit earned in 2019. Code Section 12-6-3775(G) as added by Act No.
   237 does not apply.
   Repeal Date: The credit under Code Section 12-6-3775 is repealed on December 31, 2024. If the
   credit is earned before the repeal, then Code Section 12-6-3775, as amended, continues to apply
   until the credit has been fully claimed.
   Effective Dates: See various effective dates above.
   House Bill 5150, Part IB, Section 117, Proviso 117.170 (Act No. 239)
   Credit for Rehabilitation of Certified Historic Structure – Waiver of Fee during Fiscal
   Year 2022 – 2023
   Code Section 12-6-3535 provides two similar income tax credits to taxpayers making qualified
   rehabilitation expenditures for a certified historic structure in South Carolina (one for taxpayers
   that qualify for the federal historic rehabilitation credit in Internal Revenue Code Section 47 and
   one for individual taxpayers that do not qualify for the federal historic rehabilitation credit).
   In 2020, Code Section 12-6-3535(G) was added to provide that a taxpayer claiming the credit
   must pay a preliminary and a final fee to the South Carolina Department of Archives and History
   for the State Historic Preservation Grant Fund. The fee schedules are listed in the statute and are
   based on 0% to .5% of estimated expenses and 0% to 1% of actual expenses.
   16

Under this temporary proviso, the requirements of Code Section 12-6-3535(G) relating to the
payment of fees are suspended for fiscal year 2022-2023.
Effective Date: This temporary proviso is effective for State fiscal year July 1, 2022 through
June 30, 2023. It will expire June 30, 2023, unless reenacted by the General
Assembly in the next legislative session.
Senate Bill 635, Section 4 (Act No. 172)
Industry Partnership Fund Credit – Credit Amounts Amended
Code Section 12-6-3585 allows a taxpayer to claim a credit against income taxes, bank taxes,
corporate license fees, insurance premium taxes, or any combination of these taxes, for
contributions made to the Industry Partnership Fund at the South Carolina Research Authority
(“SCRA”) or an SCRA-designated affiliate, or both, pursuant to Code Section 13-17-88(E). To
qualify for the credit, the taxpayer must retain a form provided by SCRA identifying the year and
amount of credit for which the taxpayer qualifies. The total aggregate credit that may be
allocated to all taxpayers in a single tax year remains $9 million.
Code Section 12-6-3585(A) has been amended to provide that a taxpayer may receive up to
$500,000 in credit annually. Previously, the credit amount was limited to $250,000 per taxpayer
annually. This section has been further amended to provide that if the $9 million cap is not met
within 60 days of the annual opening date for the application of the credit, the maximum credit
allowed to a single taxpayer is automatically increased to $1 million for the remainder of the year
until the $9 million cap is reached.
Effective Date: July 1, 2021, for each tax year beginning after 2020.
House Bill 5075, Section 1.A. and 1.C. (Act No. 202)
Low Income Housing Credit – Amendments
Code Section 12-6-3795 provides a South Carolina housing tax credit (“housing tax credit”) to
eligible owners of residential low-income rental buildings. A building owner must apply for and
obtain a housing credit allocation and an eligibility statement from the South Carolina Housing
and Finance Development Authority (“housing authority”) certifying that the project qualifies for
the credit.
An eligibility statement issued to a qualified project must now include the annual amount of
housing tax credit allocated to a project for each year of the credit period and the total amount
allocated to the project for all years. Code Section 12-6-3795(C)(1).
Under the amendments to the statute, the total amount of housing tax credits available to all
qualified projects in a calendar year has been capped and additional restrictions addressing how
credits are to be allocated have been enacted. Code Sections 12-6-3795(B)(5) and (C). The
17

housing tax credit allocated to a single qualified project cannot exceed the amount of the federal
housing tax credit. Code Section 12-6-3795(B)(1). Previously, the credit was equal to the amount
of the federal credit and there was no further limitation on the amount of the South Carolina
housing tax credit. The housing authority is responsible for the allocation and administration of
the housing tax credit and ensuring that all dollar limitations and restrictions are not exceeded.
Code Section 12-6-3795(D).
The recapture provisions of the statute have been amended to provide that any recapture of any
housing tax credit must be reported in the same manner as the recapture of the federal housing
tax credit. Code Section 12-6-3795(B)(2).
Effective Date: May 16, 2022, and first applies to tax years beginning after 2021.
Senate Bill 901, Section 6 (Act No. 237)
Job Development and Job Retraining Credits Qualification – New “Related Person”
Provision
Chapter 10, Title 12, allows a qualifying business a credit against withholding taxes if the
business is engaged in certain types of businesses and the qualifying business is either: (1)
creating a minimum number of new jobs and investing a minimum amount of investment at a
facility in South Carolina (“job development credit”), or (2) is retraining existing employees
located in South Carolina and the training is necessary for the business to remain competitive or
to introduce new technologies (“retraining credit”). To qualify for the job development credit,
the business must be approved by the Coordinating Council for Economic Development and
must enter into a revitalization agreement with the Council. Before claiming a job development
credit, the qualifying business must have met its minimum job requirement and its minimum
capital investment requirement agreed to in the revitalization agreement. For the retraining
credit, a business must enter into an agreement with the State Board for Technical and
Comprehensive Education and ensure the qualifying employees complete the relevant training.
Code Section 12-10-80 has been amended to add a new provision concerning related persons.
For purposes of Chapter 10, Title 12, a qualifying business may designate up to two “related
persons” whose jobs and investments may be included in determining whether the qualifying
business has met and maintained its minimum job and capital investment requirements so long as
the related person’s jobs and capital investment are located at the qualifying business’s project.
Qualifying expenditures incurred by a related person may be treated as though they were
incurred by the qualifying business and each related person may claim the job development
credit for jobs created by the related person and may include any qualifying expenditures of the
qualifying business or another related person as if they had been created and made by the related
person.
A single member limited liability company (LLC) that is disregarded or a qualified subchapter S
subsidiary (QSSS) as defined in Section 1361(b)(3)(B) of the Internal Revenue Code is treated as
the qualifying business for all purposes of Chapter 10, Title 12; however, the LLC or QSSS
counts as a related person for purposes of the two entity or person limit.
18

Code Section 12-10-30 has been amended to add a definition of “related person.” “Related
person” includes any entity or person that bears a relationship to a business as provided in
Internal Revenue Code Section 267 or 707(b). The related person must be a “qualifying
business” as defined in Code Section 12-10-30, except for the job development credit, the related
person does not have to be engaged in a business of the type identified in the job tax credit
statute, Code Section 12-6-3360. For the retraining credit, the related person does not have to be
engaged in manufacturing or processing operations or technology intensive activities at a
manufacturing, processing, or technology intensive facility as defined in Code Section
12-6-3360(M).
Effective Date: June 22, 2022
House Bill 3340, (Act No. 184)
License Fee (Tax) Credit for Infrastructure – Amendments
Code Section 12-20-105 allows a company subject to the license fee imposed under Code
Section 12-20-100 on South Carolina property and gross receipts of a utility such as a power
company, water company, gas company, or telephone company, a credit against its license fee
liability for amounts paid in cash for infrastructure for an eligible project. The statute has been
amended as follows:

1. Code Section 12-20-105(A) has been amended to allow a company to enter into a multi-year
   commitment to provide cash for eligible infrastructure for an eligible project. If a company
   enters into such agreement, and the eligible project is not constructed by the end of the tax
   year, the company may provide cash in that year or a future year to another eligible project
   and retain the credit.
2. Code Section 12-20-105(C)(7) has been added to allow for cash payments to a county,
   political subdivision, or agency of the state for purposes of defraying public debt incurred to
   pay for infrastructure at a project qualifying under Code Section 12-10-105(B)(2) to qualify
   for the credit. A qualifying project under Code Section 12-10-105(B)(2) is a project located
   in a business, commercial, or industrial park, or a combination thereof, which is used for
   economic development and which is owned by a county, political subdivision, or agency of
   the state at the time the improvements are paid for.
3. Code Section 12-20-105(E)(1) now provides that the maximum amount of credit that can be
   claimed in any tax year by a single company is $600,000. Previously, the amount was
   $400,000.
4. Code Section 12-20-105(E)(2) has been added to allow for an increase in the credit amount
   for the tax year if the eligible project is located in a Tier II, Tier III, or Tier IV County
   pursuant to Code Section 12-6-3360(B), the job tax credit county rankings. The increased
   amounts are:
   19

County Tier
Tier II County
Tier III County
Tier IV County

Credit Increase Amount
$50,000
$100,000
$150,000

To be eligible for the increased credit amounts, the total of a company’s credit claim for the
taxable year must be for a qualifying project located in a single Tier II, Tier III, or Tier IV
County. If the project extends across a county boundary, the qualifying project is considered
to be located in the county with the lowest credit amount unless at least 80% of the total costs
associated with the project is attributable to that portion of the project located in the county
with the higher tier credit.

5. Code Section 12-10-105(I) has been amended to allow debt payments on any loans or bonds
   issued to pay for qualifying infrastructure at a project qualifying under Code Section 12-10105(B)(3). A project qualifying under Code Section 12-10-105(B)(3) is a county or
   municipality-owned multiuse sports and recreation complex located in a county that collected
   at least $5 million in state accommodations tax in at least one fiscal year.
   Effective Date: May 16, 2022, and applies for credits first claimed for tax years beginning after
   2021.

REENACTED OR REVISED TEMPORARY PROVISOS
The following temporary provisos were enacted in a prior legislative session
and were reenacted by the General Assembly in 2022. Temporary provisos
are effective for the State fiscal year July 1, 2022 through June 30, 2023, and
will expire June 30, 2023, unless reenacted by the General Assembly in the
next legislative session.
House Bill 5150, Part IB, Section 118, Proviso 118.10 (Act No. 239)
Consumer Protection Services – Individual Income Tax Deduction
This temporary proviso allows an individual an income tax deduction for the cost incurred to
purchase identity theft protection and identity theft resolution services by monthly or annual
contract or subscription. The deduction is equal to actual costs for the contract or subscription
incurred in the tax year, up to $300 for an individual taxpayer and up to $1,000 for a joint return
or a return claiming dependents.
The deduction is available to (1) a taxpayer who filed a return (paper or electronic) with the
Department for any tax year from 1998 through 2012 or (2) a person whose personally
20

identifiable information was on the return of another eligible person, including minor
dependents. The deduction is not available to an individual who deducted the same actual cost as
a business expense.
House Bill 5150, Part IB, Section 1A, Proviso 1A.9 (Act No. 239)
Teaching Supplies and Materials – Revised Reimbursement Amount
Reimbursement Amount Not Taxable or Refundable
Income Tax Credit
This temporary proviso allows public school teachers identified in the Professional Certified
Staff (PCS), certified special school classroom teachers, certified media specialists, certified
guidance counselors, and career specialists who are employed by a school district, charter school,
or lead teachers employed in a publically funded full day 4K classroom approved by South
Carolina First Steps to School Readiness, a $300 reimbursement designed to offset expenses
incurred for teaching supplies and materials. The reimbursement is not considered taxable
income by South Carolina. In previous years, the reimbursement amount was $275.
This proviso also provides that any classroom teacher, including a classroom teacher at a South
Carolina private school, not eligible for the teacher supply reimbursement described above, may
claim a refundable income tax credit on his 2022 tax return. The credit is the lesser of $300 or
the amount spent on teacher supplies and materials. The return or amended return claiming the
credit must be filed on or before June 30, 2023, and may include expenses incurred after
December 31, 2022. Note: Any person who receives the reimbursement provided by this proviso
is not eligible for the income tax credit allowed by this proviso.
House Bill 5150, Part IB, Section 1A, Proviso 1A.10 (Act No. 239)
Teacher of the Year Awards – Not Subject to South Carolina Income Tax
This temporary proviso provides for the following teacher of the year awards: (a) a $1,000 award
to each district Teacher of the Year; (b) a $25,000 award to the State Teacher of the Year; and
(c) a $10,000 award to each of the four Honor Roll Teachers of the Year. These awards are not
subject to South Carolina income tax.
House Bill 5150, Part IB, Section 117, Proviso 117.114 (Act No. 239)
Retail Facilities Revitalization Act – Repeal of Act Suspended
The South Carolina Retail Facilities Revitalization Act (Title 6, Chapter 34) was enacted in 2006
(Act No. 285) to create an incentive for the renovation, improvement, and redevelopment of
abandoned retail facility sites in South Carolina. A taxpayer who renovates, improves, or
redevelops an abandoned retail facility at an eligible site may elect to take either an income tax
21

credit or a property tax credit. Act No. 285 of 2006 contained a repeal provision stating that the
Act is repealed on July 1, 2016.
Under this temporary proviso, the repeal of the South Carolina Retail Facilities Revitalization
Act as to sites for which written notification of election of mode of credit has been provided to
the Department prior to July 1, 2016, and for which a building permit has been issued prior to
July 1, 2016, is suspended for fiscal year 2022 - 2023.
House Bill 5150, Part IB, Section 109, Proviso 109.13 (Act No. 239)
Renewable Fuel Credit – Placed in Service Date Extended
Code Section 12-6-3610(A) provides an income tax credit equal to 25% of the cost to the
taxpayer of purchasing, constructing, and installing property used for distribution or dispensing
renewable fuel. Code Section 12-6-3610(B) provides an income tax credit equal to 25% of the
cost to the taxpayer of constructing or renovating a building and equipping the facility for the
purpose of producing renewable fuel. Code Section 12-6-3610(D) provides that the taxpayer
must place the property or facility in service prior to January 1, 2020.
This temporary proviso extends the date the taxpayer must place property or facility into service
that is used for distribution or dispensing renewable fuel until January 1, 2023.

REMINDERS
The following provisions were enacted prior to 2022 but are being phased in
or are effective in 2022 and thereafter. The provisions are summarized below
for informational purposes.
House Bill 3516, Section 15 (Act No. 40 of 2017)
Motor Fuel User Fee Credit – New Refundable Credit
Code Section 12-6-3780 has been added to allow a resident taxpayer a refundable income tax
credit for preventative maintenance costs associated with a private passenger motor vehicle or
motorcycle registered in South Carolina during the year, subject to certain limitations.
The credit is the lesser of: (1) the resident taxpayer’s preventative maintenance expenses; or (2)
the resident taxpayer’s actual motor fuel user fee increase incurred for that motor vehicle as a
result of increases in the motor fuel user fee pursuant to Code Section 12-28-310(D).
Other credit requirements and provisions include:

1. A resident taxpayer may claim the credit for up to two private passenger motor vehicles. The
   credit is calculated separately for each vehicle.
   22

2. The credit must be claimed on the resident taxpayer’s income tax return.

3. The Department may require any documentation it deems necessary to implement the
   provisions of this section.
4. A maximum aggregate amount of credit is available per tax year as follows:
   Tax Year
   2018
   2019
   2020
   2021
   2022 and thereafter, if reauthorized

Total Credit Allowed for All Taxpayers
$40 million
$65 million
$85 million
$110 million
$114 million

If the Revenue and Fiscal Affairs Office estimates that the total amount of credits claimed
will exceed the maximum amount of aggregate credit allowed, it shall certify to the
Department a pro rata adjustment to the credit otherwise provided.
For purposes of this credit, “private passenger motor vehicle,” “motor fuel expenditures,” and
“preventative maintenance” are defined as follows:

1. “Private passenger motor vehicle” is defined in Code Section 56-3-630. Code Section 56-3630 provides, in part, that a private passenger motor vehicle is a motor vehicle designed,
   used, and maintained for the transportation of ten or fewer persons and trucks having an
   empty weight of 9,000 pounds or less and a gross weight of 11,000 pounds or less.
2. “Motor fuel expenditures” are purchases of motor fuel within South Carolina to which the
   motor fuel user fee imposed pursuant to Code Section 12-28-310(D) applies.
3. “Preventative maintenance” includes costs incurred within South Carolina for new tires, oil
   changes, regular vehicle maintenance, and the like.
   Expiration of Credit: Unless reauthorized by the General Assembly, the credit may not be
   claimed for any tax year beginning after 2022.
   Additional Information: See SC Revenue Ruling #17-6 for more information regarding the
   credit.
   Effective Date: Tax years beginning after 2017.

23

House Bill 3516, Section 16 (Act No. 40 of 2017)
South Carolina Earned Income Credit – New Credit
Code Section 12-6-3632 has been added to provide a full-year resident individual a
nonrefundable South Carolina earned income tax credit. The credit is equal to 125% of the
federal earned income tax credit allowed the taxpayer under Internal Revenue Code Section 32.
The credit will be phased in over six years in equal installments of 20.83% beginning in 2018 as
follows:
Tax Year
2018
2019
2020
2021
2022
2023 and thereafter

Credit Amount
20.83% of federal earned income credit
41.67% of federal earned income credit
62.5% of federal earned income credit
83.33% of federal earned income credit
104.17% of federal earned income credit
125% of federal earned income credit

Effective Date: Tax years beginning after 2017.
House Bill 3516, Section 17 (Act No. 40 of 2017)
Two-Wage Earner Credit – Credit Increased
Code Section 12-6-3330, providing a two-wage earner income tax credit for married individuals
filing a joint return when both spouses have South Carolina earned income, has been amended to
increase the maximum credit available from $210 to $350. Prior to this amendment, the credit
was limited to 0.7% of the lesser of $30,000 or the South Carolina qualified earned income of the
spouse with the lower South Carolina qualified earned income for the tax year.
The amendment increases the $30,000 threshold to $50,000. It is phased in over six years in
equal installments of $3,333 each tax year as follows:

Tax Year
2018
2019
2020
2021
2022
2023 and thereafter

A
Earned Income
Maximum
Threshold
$33,333
$36,667
$40,000
$43,333
$46,667
$50,000
24

B
Factor
0.7%
0.7%
0.7%
0.7%
0.7%
0.7%

Maximum Credit
(Columns A x B)
$233
$257
$280
$303
$327
$350

Effective Date: Tax years beginning after 2017.
Senate Bill 314 (Act No. 45 of 2019)
Service as Preceptor for Clinical Rotations – New Credit and New Deduction
Overview. Code Section 12-6-3800 has been added to provide an income tax credit for eligible
physicians, advanced practice registered nurses, or physician assistants who serve as a preceptor
for qualifying clinical rotations required by a medical school, physician assistant program, or
advanced practice nursing program. Code Section 12-6-1140(14) has been added to provide a
deduction for additional rotations after the taxpayer has reached the credit maximum. Below is a
summary of the credit and the deduction.
A. Preceptor Credit
Credit for Physician Preceptors. Code Section 12-6-3800(B) provides a credit for each clinical
rotation a physician serves as preceptor for a qualifying medical school-required clinical rotation,
advanced practice nursing program-required clinical rotation, or physician assistant programrequired clinical rotation. The credit amount is as follows:

1. If at least 50% of the physician’s practice consists of a combined total of Medicaid insured,
   Medicare insured, and self-pay patients, then the credit is equal to $1,000 for each rotation
   served, not to exceed $4,000 a year.
2. If at least 30% of the physician’s practice consists of a combined total of Medicaid insured,
   Medicare insured, and self-pay patients, then the credit is equal to $750 for each rotation
   served, not to exceed $3,000 a year.
   Credit for Advanced Practice Registered Nurse and Physician Assistant Preceptors. Code Section
   12-6-3800(C) provides a credit for each clinical rotation an advanced practice registered nurse or
   physician assistant serves as preceptor for a qualifying advanced practice nursing programrequired clinical rotation or physician assistant program-required clinical rotation. The credit
   amount is as follows:
3. If at least 50% of the advanced practice registered nurse’s or physician assistant’s practice
   consists of a combined total of Medicaid insured, Medicare insured, and self-pay patients,
   then the credit is equal to $750 for each rotation served, not to exceed $3,000 a year.
4. If at least 30% of the advanced practice registered nurse’s or physician assistant’s practice
   consists of a combined total of Medicaid insured, Medicare insured, and self-pay patients,
   then the credit is equal to $500 for each rotation served, not to exceed $2,000 a year.
   Phase In. The credit is phased in over five years in equal and cumulative installments beginning
   in tax year 2020. The phased-in credit amounts are provided below and reflect completion of the
   maximum of four allowed rotations during the year.
   25

Eligible Taxpayer: Physician Preceptor
If 50% or More of Practice is
Medicaid, Medicare, and Self Pay:
Credit Per
Maximum Credit
Tax
Rotation
Per Year
Year
(x)
(4x)
2020
$200
$800
2021
$400
$1,600
2022
$600
$2,400
2023
$800
$3,200
2024
$1,000
$4,000
2025
$1,000
$4,000
2026
Credit Repealed

If 30% or More of Practice is
Medicaid, Medicare, and Self Pay:
Credit Per
Maximum Credit
Rotation
Per Year
(x)
(4x)
$150
$600
$300
$1,200
$450
$1,800
$600
$2,400
$750
$3,000
$750
$3,000

Eligible Taxpayer: Advanced Practice Registered Nurse or Physician Assistant
Preceptor
If 50% or More of Practice is
If 30% or More of Practice is
Medicaid, Medicare, and Self Pay:
Medicaid, Medicare, and Self Pay:
Credit Per
Maximum Credit
Credit Per
Maximum Credit
Tax
Rotation
Per Year
Rotation
Per Year
Year
(x)
(4x)
(x)
(4x)
2020
$150
$600
$100
$400
2021
$300
$1,200
$200
$800
2022
$450
$1,800
$300
$1,200
2023
$600
$2,400
$400
$1,600
2024
$750
$3,000
$500
$2,000
2025
$750
$3,000
$500
$2,000
2026
Credit Repealed
Credit Limit and Carryforward. Credits are considered to be earned in the tax year in which the
rotation is served. The taxpayer may claim 50% of the credit in the tax year the credit is earned
and 50% the following tax year. The credit claimed in a tax year may not exceed 50% of the
taxpayer’s remaining tax liability after all other credits have been applied. Any unused credit
may be carried forward to the following year, except that a carryforward may not be used for a
tax year that begins more than 10 years from the year the credit was earned. Code Section 12-63800(D).
B. Deduction Allowed for Taxpayers Who Maximize the Credit
If a taxpayer earns the maximum annual credit amount allowed by Code Section 12-6-3800(B) or
(C), and the taxpayer serves as preceptor for additional rotations that otherwise would have
qualified for the credit, then the taxpayer may claim a deduction in an amount equal to the
amount that the credit would have equaled. The taxpayer may earn this deduction up to six times
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a tax year. The deduction is also subject to phase in. Code Section 12-6-1140(14) has been added
to provide for this deduction.
C. Other Requirements and Limitations of the Credit and Deduction
Other requirements and limitations include:

1. A preceptor must provide a minimum of two program-required clinical rotations within a
   calendar year.
2. The preceptor cannot be otherwise compensated for serving as a preceptor.
3. The credit and deduction are not cumulative and may not be combined.
   D. Definitions
   “Preceptor” means a physician, advanced practice nurse practitioner, or physician assistant who
   provides supervision and instruction during student clinical training experiences, is otherwise not
   compensated for doing so, and provides a minimum of two required clinical rotations within a
   calendar year. Code Section 12-6-3800(A)(3). Definitions are also provided for: “independent
   institution of higher learning,” “medical school-required clinical rotation,” “physician assistant
   program-required clinical rotation,” and “advanced practice nursing program-required clinical
   rotation.”
   E. Reporting by Department
   By March 31 of each year the credit is allowed, the Department is required to report to the
   Senate Finance Committee, the House of Representatives Ways and Means Committee, and the
   Governor the number of taxpayers claiming the credit, the total amount of credits allowed, and
   the number of hours that the recipient taxpayers served as preceptors. Code Section 12-63800(F).
   See SC Revenue Ruling #20-2 for more information regarding the credit and deduction.
   Repeal Date: January 1, 2026
   Effective Date: Applies to tax years 2020 through 2025.
   Senate Bill 76, Section 1 (Act No. 138 of 2020)
   Energy Efficient Manufactured Home – Credit Extended
   Code Section 48-52-870 was enacted in 2008 (Act No. 354) to provide a $750 nonrefundable
   income tax credit to any person who purchases from a retail dealership licensed by the South
   Carolina Manufactured Housing Board for use in South Carolina a manufactured home
   designated by the United States Environmental Protection Agency and the United States
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Department of Energy as meeting or exceeding each agency’s energy saving efficiency
requirements or designated as meeting or exceeding such requirements under each agency’s
ENERGY STAR program. The income tax credit was effective from July 1, 2009 through July 1,
2019. Act No. 91 of 2019 extended the credit for purchases of qualifying manufactured homes
through June 30, 2020.
This Act extends the income tax credit for purchases of qualifying manufactured homes through
July 1, 2024.
Effective Date: May 26, 2020

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PROPERTY TAXES
Senate Bill 1087, Section 5 (Act No. 228)
Manufacturing Property – Increase in Partial Exemption
Code Section 12-37-220(B)(52) has been amended to exempt from ad valorem property taxes
42.8571% of the property tax value of real and personal manufacturing property assessed for
property tax purposes pursuant to Code Section 12-43-220(a)(1). This 42.8571% exemption is
effective for property tax years beginning after 2021, with no phase-in period. Prior to
amendment, the percentage of manufacturing property exempted was to be 14.2857% for
property tax years 2023 and thereafter and the partial exemption was being phased in over a sixyear period beginning in property tax year 2018.
The exemption does not apply to property owned or leased by a public utility as that term is
defined in Code Section 58-33-5, regulated by the Public Service Commission, even if the
property is used for manufacturing.
The revenue loss resulting from the partial exemption must be reimbursed and allocated to the
political subdivisions of South Carolina, including school districts, in the same manner as the
Trust Fund for Tax Relief, but must not exceed $170 million per year. For any year in which the
reimbursements are projected by the Revenue and Fiscal Affairs Office to exceed the
reimbursement cap, the exemption amount shall be proportionately reduced so as not to exceed
the reimbursement cap. Previously, the reimbursement to the political subdivisions from the
partial exemption was capped at $85 million.
Effective Date: June 17, 2022, and applies to property tax years after 2021.
Senate Bill 233, Section 3.B. (Act No. 236)
Certain Farm Buildings and Agricultural Structures – Now Exempt
Code Section 12-37-220(B)(14) provides a property tax exemption for all farm machinery and
equipment including self-propelled farm machinery and equipment, except for vehicles licensed
for use on the highway. This subsection has been amended to provide that farm buildings and
agricultural structures owned by a producer in South Carolina and used to house livestock,
poultry, crops, or farm equipment or supplies are also exempt from property taxes.
Effective Date: June 22, 2022, and applies to property tax years beginning after 2021.

29

Senate Bill 233, Section 3.A. (Act No. 236)
Property Valuation Adjustment for Flooding, Hurricane, or Wind Event
Code Section 12-39-250(B) requires the County Assessor or the County Board of Assessment
Appeals to order the County Auditor to adjust the value and assessment of real property which
has sustained damage as a result of fire, if the taxpayer applies for the correction prior to the
payment of the tax. The code section has been amended to include flooding, hurricane, or wind
event in addition to fire as a qualifying event for purposes of applying for the valuation
adjustment.
Effective Date: June 22, 2022, and applies to property tax years beginning after 2021.
Senate Bill 233, Section 1 (Act No. 236)
Property Tax Exemption for Disabled Veterans, Police Officers and Firefighters –
Amendments Relating to “Heirs’ Property” and “Qualified Surviving Spouses”
Code Section 12-37-220(B)(1) exempts from ad valorem property taxes a house owned by (a) an
“eligible owner” in fee or jointly with a spouse or (b) a “qualified surviving spouse.”
Eligible Owner. An “eligible owner” includes a disabled veteran, a disabled former law
enforcement officer, and a disabled former firefighter (including a volunteer firefighter) who is
permanently and totally disabled as that term is defined in Code Section 12-37-220(B)(1)(f)(ii)
as a result of a service-connected disability. In the case of a disabled veteran, the eligible owner
must get the disability certified by the county service officer.
Who may qualify as an eligible owner has been expanded by new Code Section 12-37220(B)(1)(f). Eligible owner now includes:
A person who owns an interest in a house and meets all other requirements of this
item and is otherwise an eligible owner but for the ownership requirement is
deemed to be an eligible owner and is eligible for the exemption allowed by this
item so long as the county assessor certifies to the Department of Revenue that the
house is located on heirs’ property and the person is the owner-occupied resident
of the house. A person eligible pursuant to this subitem must not claim the special
assessment rate allowed pursuant to Section 12-43-220(c) on any other property.
For purposes of this item, heirs’ property has the same meaning as provided in
Section 15-61-320.
Code Section 15-61-320(5) provides:
“Heirs’ property” means real property held in tenancy in common that satisfies all
of the following requirements as of the filing of a partition action:
(a) there is no agreement in a record binding all of the cotenants that governs
the partition of the property;
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(b) one or more of the cotenants acquired title from a relative, whether living
or deceased; and
(c) any of the following applies:
(i) twenty percent or more of the interests are held by cotenants who are
relatives;
(ii) twenty percent or more of the interests are held by an individual who
acquired title from a relative, whether living or deceased; or
(iii) twenty percent or more of the cotenants are relatives.
The statutory definition of “house,” in Code Section 12-37-220(B)(1)(f)(iv) (as renumbered), has
been amended to reflect this change in Code Section 12-37-220(B)(1)(e).
Qualified Surviving Spouse. Prior to amendment, Code Section 12-37-220(B)(1)(b) allowed a
house owned by a qualified surviving spouse of certain deceased armed forces personnel, police
officers, or firefighters, including a subsequently acquired house, to qualify for a property tax
exemption if the original house was acquired from the deceased spouse. That section has been
amended to eliminate the statutory requirement that the relevant house be “acquired from the
deceased spouse.” Similarly, the language in renumbered subpart (f)(iii), regarding a “qualified
surviving spouse,” specifies that a “qualified surviving spouse” also includes the surviving
spouse of a member of the armed forces of the United States who was killed in action, or a law
enforcement officer or a firefighter who died in the line of duty as a law enforcement officer or
firefighter. Previously, the deceased spouse (i.e., armed forces personnel, police officer,
firefighter) had to have owned the home solely in fee or jointly with their spouse for the
surviving spouse to qualify for the exemption. That provision relating to ownership has been
removed. However, the qualified surviving spouse must remain unmarried, reside in the house,
and acquire ownership of the house in fee or for life to qualify for the exemption.
Note: Other property tax exemptions may be available for homes or motor vehicles of taxpayers
and surviving spouses who do not meet the requirements of an “eligible owner” or a “qualified
surviving spouse” noted above.
Effective Date: June 22, 2022
House Bill 5144 (Act No. 203)
Rural Telephone Exemption – Amended
Code Section 12-37-220(B)(10) provides a property tax exemption for the property of telephone
companies and rural telephone cooperatives operating in South Carolina if the property is used in
providing rural telephone service and it was exempt as of December 31, 1973; provided,
however, that the amount of property subject to taxation in any tax district shall not be less than
the net amount to which the tax millage was applied for the year ending December 31, 1973.
Additionally, property added in any tax district after December 31, 1973, is exempt from tax in
the proportion that the exempt property of such company or cooperative as of December 31,
1973, in that tax district was to the total property of such company or cooperative as of
December 31, 1973 in that tax district.
31

In Act No. 203, the Legislature made certain findings intending to clarify the rural telephone
exemption, including stating that the exemption for “property used in providing telephone
service” applies to all property used for these purposes, regardless of technology used or whether
it is used for other purposes and the exemption was never intended to be qualified or limited in
any manner, unlike certain other exemptions.
Consistent with the legislative findings, Code Section 12-37-220(B)(10) has now been clarified
to address multi-use property. Property qualifying for the rural telephone exemption includes
property used in providing telephone service, as defined in Code Section 33-46-20, in rural areas.
It also includes mixed-use property, which is exempt without regard to whether the property is
used in providing services in addition to telephone service in rural areas and regardless of the
technology used to provide the services including, but not limited to broadband over a highspeed internet connection that allows the customer to access basic voice grade local service from
the voice provider of the customer’s choice.
Code Section 33-46-20 defines “telephone service” as “the providing of communication service
including, but not limited to, the transmission of voice, sounds, signals, pictures, writing, or signs
of all kinds through the use of electricity or the electromagnetic spectrum between the
transmitting and receiving apparatus, together with any communication services requiring
band-width capacity, community antenna, and cable television services and including all lines,
wires, radio, lights, electromagnetic impulse and all facilities, systems, or other means used in
the rendition of such services, but not including message telegram service or radio broadcasting
services or facilities within the meaning of Section 3(o) of the Federal Communications Act of
1934, as amended (47 USC Section 153(o)).”
Effective Date: May 16, 2022, and applies to property tax years beginning after 2021.

REENACTED TEMPORARY PROVISOS
The following temporary provisos were enacted in a prior legislative session
and were reenacted by the General Assembly in 2022. Temporary provisos
are effective for the State fiscal year July 1, 2022 through June 30, 2023, and
will expire June 30, 2023, unless reenacted by the General Assembly in the
next legislative session.
House Bill 5150, Part IB, Section 109, Proviso 109.11 (Act No. 239)
Notification of Protest to Affected County and School District
This temporary proviso requires the Department to notify any affected county and school district
when a taxpayer, other than an individual, files a written protest pursuant to Code Section 12-6032

2120. Code Section 12-60-2120 allows a property taxpayer to protest a property tax assessment
or the denial of a property tax exemption.
House Bill 5150, Part IB, Section 1, Proviso 1.46 (Act No. 239)
Index of Taxpaying Ability – Imputed Value for Owner-Occupied Residential Property
The index of taxpaying ability is used to determine state funding for education under the
Education Finance Act of 1977, Chapter 20, Title 59. This index, prepared by the Department,
shows a local school district’s relative fiscal capacity in relation to that of all other districts in the
state based on the full market value of all taxable property of the district assessed for ad valorem
taxes for the second completed property tax year preceding the fiscal year in which the index is
used.
Code Section 12-37-220(B)(47) exempts 100% of the fair market value of owner-occupied
residential property receiving a 4% assessment ratio pursuant to Code Section 12-43-220(c) from
all property taxes imposed for school operating purposes. School districts are reimbursed for lost
revenue based on a three-tier formula set forth in Code Section 11-11-156.
This temporary proviso clarifies that, for the current fiscal year, an index value for the exempt
owner-occupied residential property must be imputed by adding the second preceding taxable
year total school district reimbursements for Tiers 1, 2, and 3(A) of the three-tier formula and not
to include the supplement distribution. The Department shall not include sales ratio data in its
calculation of the index of taxpaying ability. The methodology for the calculation of value for
classes of property other than exempt owner-occupied residential property is not affected by this
temporary proviso.
House Bill 5150, Part IB, Section 113, Proviso 113.7 (Act No. 239)
Agricultural Use Exemption for Timberland – Impact of Additional County Requirements
Chapter 27 of Title 6 establishes the Local Government Fund (“Fund”) and requires that South
Carolina’s annual general appropriations act allocate a specified amount of general fund
revenues from the latest completed fiscal year to the Fund. No later than 30 days after the end of
each calendar quarter, the State Treasurer must distribute Fund revenues to counties and
municipalities in accordance with Code Section 6-27-40.
Code Section 12-43-230(a) and Code Section 12-43-232 provide certain requirements for a
landowner to receive an agricultural use exemption. Under this temporary proviso, if a county
imposes any additional requirements for an agricultural use exemption with respect to
timberland, the county’s Fund distributions will be withheld.

33

House Bill 5150, Part IB, Section 117, Proviso 117.37 (Act No. 239)
Personal Property Tax Relief Fund
This temporary proviso provides that if a county imposes a personal property tax exemption sales
tax in an effort to reduce ad valorem taxes on personal motor vehicles and a 2% sales tax rate on
gross proceeds of sales is insufficient to offset the property tax not collected, sufficient amounts
must be credited to the Trust Fund for Tax Relief established under Code Section 11-11-150 to
provide reimbursement to offset the shortfall in the manner provided in Code Section 4-10540(A). Note: As of the date of this publication, no county has reduced the ad valorem taxes on
personal motor vehicles by imposing this sales tax.
House Bill 5150, Part IB, Section 92D, Proviso 92D.1 (Act No. 239)
Improvements to Property Damaged by Catastrophic Weather Event – Time for
Improvements for Eligible Events
This temporary proviso provides that any improvements made to real property or personal
property used as a residence, such as a mobile home or manufactured housing unit, damaged
during the catastrophic weather event in October 2015, Hurricane Matthew of 2016, or Hurricane
Florence of 2018, after the event and before June 30, 2023, is not considered an improvement
and may not be reassessed at a higher rate as a result of the assistance provided.
This provision only applies if as a result of the catastrophic weather event, the improvements
made to the property were funded by the United States Department of Housing and Urban
Development Block Grant - Disaster Recovery program, implemented by the Office of
Resilience, Disaster Recovery Office. This provision also applies if, at the discretion of the
county, and using qualifications determined by the county, the improvements were made with
the assistance of a volunteer organization active in disaster, or in a similar volunteer
organization.
During the current fiscal year, the property tax value of an eligible property shall remain the
same unless an assessable transfer of interest occurs. No refund is allowed on account of values
adjusted as provided in this provision.
House Bill 5150, Part IB, Section 117, Proviso 117.114 (Act No. 239)
Retail Facilities Revitalization Act – Repeal of Act Suspended
The South Carolina Retail Facilities Revitalization Act (Title 6, Chapter 34) was enacted in 2006
(Act No. 285) to create an incentive for the renovation, improvement, and redevelopment of
abandoned retail facility sites in South Carolina. A taxpayer who renovates, improves, or
redevelops an abandoned retail facility at an eligible site may elect to take either an income tax
credit or a property tax credit. Act No. 285 of 2006 contained a repeal provision stating that the
Act is repealed on July 1, 2016.
34

Under this temporary proviso, the repeal of the South Carolina Retail Facilities Revitalization
Act as to sites for which written notification of election of mode of credit has been provided to
the Department prior to July 1, 2016, and for which a building permit has been issued prior to
July 1, 2016, is suspended for fiscal year 2022 - 2023.

REMINDERS
The following provisions were enacted prior to 2022 but are being phased in
or are effective in 2022 and thereafter. The provisions are summarized below
for informational purposes.
Senate Bill 648, Section 5 (Act No. 106 of 2021)
Consolidation of Clarendon County School Districts 2 and 4 – Millage
Effective July 1, 2022, Clarendon County School District 2 and Clarendon County School
District 4 are abolished. The powers and duties of the two school districts’ respective boards of
trustees will devolve on the board of trustees of a consolidated school district to be known as
Clarendon County School District.
For purposes of determining the 2022 property tax millage levy of the new Clarendon County
School District, the millage levy will be determined and calculated by the Department of
Revenue based on the 2021 levy of Clarendon County School Districts 2 and 4 and the value of a
mill in each district. The millage levy for 2023 must be the millage levy for the previous year.
The allowed millage levy for 2022 and 2023 may be increased by the Department if necessary to
comply with educational mandates imposed by state or federal law.
Beginning in 2024, the new board of trustees is authorized to impose an annual tax levy,
exclusive of any millage imposed for bond debt service. Upon certification to the county auditor
of the tax levy to be imposed, the auditor will levy, and county treasurer will collect, the certified
millage upon all taxable property in the Clarendon County School District. Clarendon County
School District may raise its millage by two mills or less over the millage levied for the previous
year in addition to any millage needed to adjust for the Education Finance Act inflation factor
and sufficient to meet the requirements of Code Section 59-21-1030 (level of financial effort per
pupil required for each school district). Any increase above the two mill increase for operations,
may be levied only after a majority of the registered electors of the new consolidated district vote
in favor of a millage increase in a referendum called by the district school board and conducted
by the county election commission. If the referendum is to be held at any time other than the
general election, then the school district is required to pay the cost of the referendum. If these
provisions conflict with the provisions of Code Section 6-1-320, relating to millage rate increase
limitations, the provisions of Code Section 6-1-320 control.
Effective Date: April 12, 2021
35

SALES AND USE TAXES
House Bill 5150, Part IB, Section 44, Proviso 44.10 (Act No. 239)
South Carolina Agriculture Tax Exemption Card (SCATE Card) – Fee Authorized for
Card
The agricultural exemption certificate (Form ST-8F) used by farmers to purchase certain items
(e.g., farm machinery, fertilizer, feed, containers) exempt from the sales and use tax has been
replaced by a new South Carolina Agriculture Tax Exemption (“SCATE”) card issued by the
South Carolina Department of Agriculture. The Department of Agriculture began accepting
applications and issuing SCATE cards in February 2022. These cards replaced the agricultural
exemption certificate effective July 1, 2022. To obtain a SCATE card, a farmer must apply with
the Department of Agriculture at SCATEcard.com.
This temporary proviso authorizes the Department of Agriculture to charge up to $24 for a threeyear SCATE card. This provision also authorizes the Department of Agriculture to charge $5 for
any replacement SCATE cards.
Effective Date: This temporary proviso is effective for State fiscal year July 1, 2022 through
June 30, 2023. It will expire June 30, 2023, unless reenacted by the General
Assembly in the next legislative session.
Senate Bill 901, Section 4 (Act No. 237)
Watercraft Motor Sales – Maximum Tax Now Applies
Code Section 12-36-2110(A), concerning the sales of items subject to a maximum sales or use
tax and maximum casual excise tax, has been amended to add watercraft motors. The sales of
watercraft motors, effective July 1, 2022, are subject to the sales and use tax or the casual excise
tax at a rate of 5%, but no more than $500. Since watercraft motors are subject to the $500
maximum tax, local sales and use taxes do not apply to the sales of watercraft motors.
Effective Date: June 22, 2022, and first applies on July 1, 2022.

36

Senate Bill 901, Section 3 (Act No. 237)
Filing Requirement for Multi-Location Returns – Sales Tax on Accommodations
Code Section 12-36-922 has been added to Chapter 36 of Title 12 to require that, for each
accommodations tax return filed with multiple locations, the filer must provide electronically the
location information by address and the amount of net taxable sales for each location.
Effective Date: June 22, 2022
Senate Bill 152 (Act No. 166)
County Green Space Sales Tax Act – New Local Sales and Use Tax
The County Green Space Sales Tax Act has been enacted in Chapter 10, Title 4, to allow the
imposition of a local sales and use tax, at a rate not to exceed 1%, within a county for procuring,
or for servicing bonds used to procure, open lands or green space for preservation by and through
the acquisition of interests in real property. The interest in real property that may be acquired for
preservation includes the acquisition of fee simple titles, conservation easements, development
rights, rights of first refusal, options, leases with options to purchase, and any other interest in
real property.
The tax must be approved by ordinance subject to a referendum open to all qualified electors
residing in the county and must be administered and collected by the Department in the same
manner that other sales and use taxes are collected. The tax is in addition to all other local sales
and use taxes.
The tax applies to the gross proceeds of sales in the applicable jurisdiction which are subject to
the tax imposed by Chapter 36, Title 12, the collection and enforcement provisions of Chapter
54, Title 12, and to tangible personal property subject to the use tax in Chapter 36, Title 12. The
gross proceeds of the sales of unprepared food eligible for purchases with United States
Department of Agriculture food coupons, and items subject to a maximum tax in Chapter 36,
Title 12, are exempt from this tax.
The tax, if approved in the referendum, must be imposed on the first of May following the date
of the referendum. The county’s election commission must certify the results of the referendum
to the county governing board and the Department of Revenue no later than November 30th. If
the certification is not timely made to the Department of Revenue, then the imposition is
postponed for twelve months. The tax terminates the final day of the maximum time period
specified for the imposition.
If a reimposition of the tax is approved in a referendum, then the reimposed tax is effective
immediately following the termination of the earlier imposed tax. The reimposed tax terminates
on the applicable thirtieth of April, not to exceed seven years from the date of reimposition.
37

A county imposing the tax must form an advisory committee, to include seven designated
members, to assist the Department in distribution of the taxes collected.
Effective Date: May 16, 2022
House Bill 3948 (Act No. 189)
Capital Projects and Local Transportation Sales and Use Taxes – Limitations on Taxes
Imposed in a County – Amended
Code Section 4-37-60 has been added to allow a county that is imposing a Local Transportation
Sales and Use Tax in an amount not to exceed 1% to also impose an additional sales and use tax
not to exceed 1% under the Capital Projects Sales Tax Act in Article 3, Chapter 10 of Title 4.
Accordingly, the provisions of Code Section 4-37-40, while still prohibiting any portion of a
county from imposing a local sales and use tax exceeding 1% pursuant to the Local
Transportation Sales and Use Tax and any local legislation enacted by the General Assembly,
have been amended to allow the imposition of a Capital Projects Sales and Use Tax not
exceeding 1% in a county already imposing a Local Transportation Sales and Use Tax not
exceeding 1%.
Code Section 4-10-315 has been added to allow a county that is imposing a Capital Projects
Sales and Use Tax in an amount not to exceed 1% to also impose an additional sales and use tax
not to exceed 1% under the Local Transportation Sales and Use Tax provisions in Chapter 37 of
Title 4. Accordingly, the provisions of Code Section 4-10-310, while still prohibiting any portion
of a county from imposing a local sales and use tax exceeding 1% pursuant to the Capital
Projects Sales and Use Tax and any local legislation enacted by the General Assembly (with
limited exception), have been amended to allow the imposition of a Local Transportation Sales
and Use Tax not exceeding 1% in a county already imposing a Capital Projects Sales and Use
Tax not exceeding 1%.
Effective Date: May 16, 2022

38

REENACTED TEMPORARY PROVISOS
The following temporary provisos were enacted in a prior legislative session
and were reenacted by the General Assembly in 2022. Temporary provisos
are effective for the State fiscal year July 1, 2022 through June 30, 2023, and
will expire June 30, 2023, unless reenacted by the General Assembly in the
next legislative session.
House Bill 5150, Part IB, Section 117, Proviso 117.146 (Act No. 239)
Agribusiness Facilities – Material Handling and Construction Material Exemptions
This temporary proviso provides that material handling and construction materials for
agribusiness facilities that invest at least $100 million in South Carolina are exempt from state
and local sales taxes.
Note: Exemptions implicated by this proviso are Code Section 12-36-2120(51) and Code Section
12-36-2120(67). See SC Revenue Ruling #15-2, “Construction Material Exemption for
Manufacturing and Distribution Facilities” and SC Revenue Ruling #13-3, “Material Handling
Systems and Material Handling Equipment.”
House Bill 5150, Part IB, Section 50, Proviso 50.20 (Act No. 239)
Navy Base Intermodal Facility – Distribution Facility Eligibility
This temporary proviso provides that the Navy Base Intermodal Facility owned by Palmetto
Railways, a division of the Department of Commerce, shall be considered a distribution facility
for the purpose of sales and use tax exemptions associated with the purchase of equipment and
construction materials.
Note: Exemptions implicated by these provisos include Code Section 12-36-2120(51) and (67).
House Bill 5150, Part IB, Section 109, Proviso 109.12 (Act No. 239)
Clothing Used in Perishable Prepared Food Manufacturing Facilities
This temporary proviso exempts from sales and use tax certain clothing required by Current
Good Manufacturing Practices as set forth in 21 C.F.R. Section 111.10, as it may be amended,
used at perishable prepared food manufacturing facilities as defined by the North American
Industry Classification System 311991 to prevent health hazards.
Clothing eligible for this exemption includes outer garments, gloves of an impermeable material,
hairnets, headbands, beard covers, caps, hair covers or other effective hair restraints, and other
attire required pursuant to 21 C.F.R. Section 110.10 for persons working in direct contact with
39

food, food contact surfaces, and food packaging materials to protect against contamination of
food in perishable prepared food manufacturing facilities.
House Bill 5150, Part IB, Section 117, Proviso 117.36 (Act No. 239)
Private Schools – Use Tax Exemption
This temporary proviso exempts purchases of tangible personal property for use in private
primary and secondary schools, including kindergarten and early childhood education programs,
from the use tax if the school is exempt from income taxes under Internal Revenue Code Section
501(c)(3). This exemption does not apply to purchases subject to sales tax. This use tax
exemption is also applicable to purchases occurring after 1995; however, no refund is due any
taxpayer on purchases exempted by this provision. See SC Regulation 117-334 for information
as to which tax, the sales tax or the use tax, applies when goods are shipped into South Carolina.
House Bill 5150, Part IB, Section 117, Proviso 117.58 (Act No. 239)
Viscosupplementation Therapies – Sales and Use Tax Suspended
For this State fiscal year, sales and use taxes on viscosupplementation therapies are suspended.
No refund or forgiveness of tax may be claimed as a result of this provision.
House Bill 5150, Part IB, Section 117, Proviso 117.54 (Act No. 239)
Respiratory Syncytial Virus Medicines Exemption – Effective Date
Act No. 69, Section 3.PP, of 2003 amended Code Section 12-36-2120(28)(a) to add an
exemption for prescription medicines used to prevent respiratory syncytial virus; it was effective
for sales on or after June 18, 2003. This temporary proviso changes the effective date of this
exemption to January 1, 1999 and provides that no refund of sales and use taxes may be claimed
as a result of this change in the effective date.

40

MISCELLANEOUS
(Summarized by Subject Matter)
MISCELLANEOUS TAX LEGISLATION
House Bill 4161 (Act No. 190)
Machines and Devices Prohibited by Law – Exception Added
Code Section 12-21-2710, which makes it unlawful for any person “to keep on his premises or
operate or permit to be kept on his premises or operated within this State” certain machines or
devices (e.g., “a slot machine, or any video game machine with a free play feature operated by a
slot in which is deposited a coin or thing of value, or other device operated by a slot in which is
deposited a coin or thing of value for the play of poker, blackjack, keno, lotto, bingo, or craps, or
any machine or device licensed pursuant to Section 12-21-2720 and used for gambling …”), has
been amended. The amendment provides an exception to the provisions of Code Section 12-212710 and states that the code section does not apply to “the development, manufacture,
processing, selling, possessing, provision of technical aid, or transporting of any printed
materials, gaming equipment, devices, or other materials, software, or hardware used or
designated for use in out-of-state jurisdictions by a gaming device manufacturer.”
For purposes of the exception established in the amendment to Code Section 12-21-2710, a
“gaming device manufacturer” is a “manufacturing entity that is in good standing with the South
Carolina Secretary of State’s Office, is registered with the United States Department of Justice
Gambling Device Registration Unit, is authorized to do business in the State of South Carolina,
and has all appropriate business licensure and zoning authorization necessary to operate a
manufacturing facility in the jurisdiction in which the manufacturing facility is located.” In
addition, “[a]ny transportation of gaming devices authorized in this section must comply with all
applicable federal laws. This section may not be construed so as to prohibit communications
between persons in this State and persons involved with such legal lotteries or gaming devices
relative to such printed materials, equipment, devices, or other materials, software, or hardware.”
Code Section 16-19-50, concerning the unlawful keeping of certain gaming tables and other
machines and devices, was also amended to provide an identical exception for “gaming machine
manufacturers” as provided in Code Section 12-21-2710.
Effective Date: May 16, 2022

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REENACTED TEMPORARY PROVISOS
The following temporary provisos were enacted in a prior legislative session
and were reenacted by the General Assembly in 2022. Temporary provisos
are effective for the State fiscal year July 1, 2022 through June 30, 2023, and
will expire June 30, 2023, unless reenacted by the General Assembly in the
next legislative session.
ADMINISTRATIVE and PROCEDURAL MATTERS
House Bill 5150, Part IB, Sections 41 and 117, Provisos 41.2 and 117.82 (Act No. 239)
3% Reduction on Interest Rate on Tax Refunds
The interest rate for tax refunds paid is reduced by 3% as follows:

1. Temporary Proviso 41.2 decreases by 2% the interest rate for tax refunds paid during the
   current fiscal year. The revenue resulting from this 2% reduction must be used for operations
   of the State’s Guardian ad Litem Program.
2. Temporary Proviso 117.82 decreases by 1% the interest rate for tax refunds paid during the
   current fiscal year. Of the revenue resulting from this 1% reduction, $300,000 must be used
   by the Senate for operating expenses of the Joint Citizens and Legislative Committee on
   Children. The remaining revenue must be used by the Department of Juvenile Justice for
   programs for mentoring or other alternatives to incarceration.
   House Bill 5150, Part IB, Section 109, Proviso 109.14 (Act No. 239)
   Certain License or Permit Applications – New Electronic Filing Option under Penalties of
   Perjury
   This temporary proviso provides that the Department may require a statement subject to
   penalties of perjury instead of a statement under oath for the purpose of allowing certain
   applications for licenses or permits to be filed electronically.

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House Bill 5150, Part IB, Section 109, Proviso 109.15 (Act No. 239)
Advance Referendum Notification by Election Commission to SCDOR
This temporary proviso provides that a county or municipal election commission must notify the
Department 60 days prior to a referendum on the imposition of a local sales tax or local option
permit.
House Bill 5150, Part IB, Section 109, Proviso 109.6 (Act No. 239)
Voluntary Website Posting of Tax Return Information for Candidates and Gubernatorial
Appointees
This temporary proviso provides that the Department must develop a program to process
inquiries from a candidate for an office in South Carolina or its political subdivisions or any
gubernatorial appointee concerning that candidate’s or appointee’s state income tax filings. Upon
request by the candidate or appointee in connection with his own income tax return, the
Department must determine if the candidate or appointee has filed his annual state income tax
returns for the past ten years, paid all income taxes due during that time period, and, if
applicable, satisfied all judgments, liens, or other penalties for failure to pay income taxes when
due.
Unless the candidate or appointee requests otherwise, the following information will be posted
on the Department’s website:

1. The candidate’s or appointee’s name;
2. The years that the candidate or appointee was required to file income tax returns during the
   last ten years and any years that he was not required to file income tax returns;
3. Whether the candidate or appointee filed income tax returns in each of the ten years that he
   was required to file an income tax return;
4. Whether the candidate or appointee paid income taxes due each year that he was required to
   file an income tax return; and
5. Whether the candidate or appointee had a judgment, lien, or other penalty levied against him
   for failure to pay income taxes when due; the year of any levy; and whether the judgment,
   lien or other penalty has been satisfied.
   A candidate’s or appointee’s inquiry constitutes a waiver of confidentiality with the Department
   concerning the information posted. The Department may not post complete income tax returns.

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MISCELLANEOUS TAX LEGISLATION
House Bill 5150, Part IB, Section 1, Proviso 1.14 (Act No. 239)
Local Government School Buses – Motor Fuel User Fee Exemption
This temporary proviso provides that motor fuel used in school buses operated by school
districts, other governmental agencies, and “head start” agencies for purposes of transporting
students for school or school-related activities is exempt from the State motor fuel user fee.
Note: Motor fuel used in school buses owned by the State is exempt from the State motor fuel
user fee under Code Section 12-28-710(12).
House Bill 5150, Part IB, Section 118, Proviso 118.7 (Act No. 239)
Admissions Tax Rebate – Motorsports, Tennis, and Soccer Facilities
This temporary proviso provides that up to $114,000 in admissions tax revenue collected
annually from all events held at a NASCAR sanctioned motor speedway or racetrack that hosts
at least one race each year featuring the preeminent NASCAR cup series must be rebated to the
motorsports entertainment complex facility in the current fiscal year to keep a NASCAR race at
the facility. In addition, any sports facility that either hosts at least one preeminent Women’s
Tennis Association-sanctioned tournament or that operates as the home venue for a professional
soccer team participating in the United Soccer Leagues, second division or higher, must be
rebated half of the facility’s admissions tax revenue for the fiscal year and used by that facility
for marketing the events held at the facility.
House Bill 5150, Part IB, Section 33, Proviso 33.10 (Act No. 239)
Nursing Home Bed Franchise Fee – Suspension
This temporary proviso continues to suspend the nursing home bed franchise fee imposed on
February 1, 2002, but subsequently suspended July 1, 2002.

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REMINDERS
The following provisions were enacted prior to 2022 but are being phased in
or are effective in 2022 and thereafter. The provisions are summarized below
for informational purposes.
MISCELLANEOUS TAXES
House Bill 3516, Section 2 (Act No. 40 of 2017)
Motor Fuel User Fee – Rate Change
Code Section 12-28-310(A) imposes a user fee of sixteen cents per gallon on:

1. All gasoline, gasohol, or blended fuels containing gasoline that are used or consumed for any
   purpose in South Carolina; and
2. All diesel fuel, substitute fuels, or alternative fuels, or blended fuels containing diesel fuel
   that are used or consumed in South Carolina in producing or generating power for propelling
   motor vehicles.
   Code Section 12-28-310(D) has been added to provide for a user fee increase by two cents a
   gallon each year for six years as follows:
   Date of Rate Change
   July 1, 2017
   July 1, 2018
   July 1, 2019
   July 1, 2020
   July 1, 2021
   July 1, 2022

New User Fee Rate Per Gallon
18 cents
20 cents
22 cents
24 cents
26 cents
28 cents

Note: The inspection fee imposed under Code Section 12-28-2355(A) at the rate of one-quarter
cent per gallon, and the environmental impact fee imposed under Code Section 12-28-2355(B) at
the rate of one-half cent per gallon, remain unchanged.
Effective Date: July 1, 2017

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OTHER ITEMS
House Bill 3516, Section 3 (Act No. 40 of 2017)
Motor Carrier Road Tax – Rate Change
Code Section 56-11-410 imposes a road tax on every motor carrier for the privilege of using the
streets and highways of South Carolina. The road tax is calculated on the amount of gasoline or
other motor fuel used by the motor carrier in its operations in South Carolina, provided the motor
carrier is allowed a credit against the road tax for the South Carolina motor fuel user fee imposed
by Code Section 12-28-310 and paid by the carrier for operations within and without South
Carolina.
Prior to July 1, 2017, the road tax was sixteen cents per gallon. Code Section 56-11-410(A) was
amended so that the road tax is imposed at the same rate as the motor fuel user fee imposed by
Code Section 12-28-310. Therefore, the road tax will increase two cents a gallon each year for
six years as follows:
Date of Rate Change
July 1, 2017
July 1, 2018
July 1, 2019
July 1, 2020
July 1, 2021
July 1, 2022

New Road Tax Rate Per Gallon
18 cents
20 cents
22 cents
24 cents
26 cents
28 cents

Effective Date: July 1, 2017
House Bill 4431 (Act No. 176 of 2020)
South Carolina Business License Tax Standardization Act – New
The South Carolina Business License Tax Standardization Act was enacted in Article 1, Chapter
1 of Title 6. While this tax related legislation is not under the jurisdiction of the Department, a
brief description of new Code Sections 6-1-400, 6-1-410, and 6-1-420 is provided below for
general information purposes.
Code Section 6-1-400 defines taxing jurisdiction as a county or municipality levying a business
license tax and provides when the tax is due, how the tax rates are determined, how the tax is
calculated, and when taxpayers are entitled to refunds. It also provides for a standard business
license application and a portal for reporting, calculating, and paying the tax.
Code Section 6-1-410 provides the procedures by which a county or municipality may issue a
notice of assessment to a taxpayer for failure to pay a business license tax and defines the
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procedures by which the taxpayer may request an adjustment of the assessment, and if not
resolved, appeal the notice of final assessment.
Code Section 6-1-420 provides conditions and limitations by which a taxing jurisdiction may
contract with third parties to assist them with collecting property or business license taxes, when
they can agree to pay these third parties contingent fees and provides a private right of action for
violations of this section.
Effective Date: January 1, 2022 for Code Sections 6-1-400 and 6-1-410;
September 30, 2020 for Code Section 6-1-420.

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LIST OF TEMPORARY PROVISOS
Temporary provisos were enacted as part of the 2022 annual budget – House Bill 5150, Part IB (Act
No. 239). They are effective only for the current State fiscal year (July 1, 2022 – June 30, 2023).
They expire on June 30, 2023, unless reenacted by the General Assembly.
The following is a list of provisos that were enacted in prior fiscal years and reenacted during this
legislative session. A brief summary of the provisos can be found in this publication under the
applicable subject matter categories.
The list is divided by subject matter with the provisos in numeric order.

NEW PROVISOS
Income Taxes
Proviso 63.10
Law Enforcement Officer of the Year Awards – Not Taxable
Proviso 117.170 South Carolina Historic Rehabilitation Credit – Certification Fee Waived for
Fiscal Year
Sales and Use Taxes
Proviso 44.10

South Carolina Agriculture Tax Exemption Card (SCATE Card) – Fee Authorized
for Card

REENACTED PROVISOS
Income Taxes
Proviso 1A.9

Teaching Supplies and Materials – Reimbursement Amount Not Taxable or
Refundable Income Tax Credit
Proviso 1A.10 Teacher of the Year Awards – Not Subject to South Carolina Income Tax
Proviso 109.13 Renewable Fuel Credit – Placed in Service Date Extended
Proviso 117.114 Retail Facilities Revitalization Act – Repeal of Act Suspended
Proviso 118.10 Consumer Protection Services – Individual Income Tax Deduction
Property Taxes
Proviso 1.46
Proviso 92D.1
Proviso 109.11

Index of Taxpaying Ability – Imputed Value for Owner-Occupied Residential
Property
Improvements to Property Damaged by Catastrophic Weather Event – Time for
Improvements for Eligible Events
Notification of Protest to Affected County and School District
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Proviso 113.7

Agricultural Use Exemption for Timberland – Impact of Additional County
Requirements
Proviso 117.37 Personal Property Tax Relief Fund
Proviso 117.114 Retail Facilities Revitalization Act – Repeal of Act Suspended
Sales and Use Taxes
Proviso 50.20
Proviso 109.12

Navy Base Intermodal Facility – Distribution Facility Eligibility
Clothing Used in Perishable Prepared Food Manufacturing Facilities –
New Exemption
Proviso 117.36 Private Schools – Use Tax Exemption
Proviso 117.54 Respiratory Syncytial Virus Medicines Exemption – Effective Date
Proviso 117.58 Viscosupplementation Therapies – Sales and Use Tax Suspended
Proviso 117.146 Agribusiness Facilities – Material Handling and Construction Material
Exemptions
Miscellaneous (Administrative and Procedural Matters, and Miscellaneous Taxes)
Administrative and Procedural Matters:
Provisos 41.2 3% Reduction on Interest Rate on Tax Refunds
and 117.82
Proviso 109.6
Voluntary Website Posting of Tax Return Information for Candidates and
Gubernatorial Appointees
Proviso 109.14 Certain License or Permit Applications – New Electronic Filing Option under
Penalties of Perjury
Proviso 109.15 Advance Referendum Notification by Election Commission to SCDOR
Miscellaneous Taxes:
Proviso 1.14
Local Government School Buses – Motor Fuel User Fee Exemption
Proviso 33.10
Nursing Home Bed Franchise Fee – Suspension
Proviso 118.7
Admissions Tax Rebate – Motorsports, Tennis, and Soccer Facilities

49