Which South Carolina county classifications governed 2006 job credits, tax moratoriums, and reduced fee-in-lieu investment under RR 07-1?

Plain-English summary

The South Carolina Department of Revenue published historical 2006 county classifications for three economic-development tax programs: the job tax credit, the corporate income or insurance-premium tax moratorium, and reduced minimum investment for fee-in-lieu-of-property-tax agreements.

The job-credit section used two ranking systems because statutory amendments treated credits first earned after June 18, 2002 differently from credits first earned after 1995 but before June 19, 2002. The newer system used five categories—distressed, least developed, under developed, moderately developed, and developed—while the older-credit system used four. The ruling listed every county in the applicable category and described temporary special treatment for Aiken and Oconee Counties.

For 2006, Allendale, Marion, McCormick, and Williamsburg Counties qualified as tax-moratorium counties. Marion County also qualified for the reduced $1 million minimum investment under both the Little Fee and Simplified Fee provisions.

What this means for you

Employers reviewing old job-credit claims

The correct 2006 county list depended on when the job tax credit was first earned. The ruling's two tables were not interchangeable.

Businesses reviewing a historical moratorium

The 2006 designation covered four counties and affected the starting framework for a 10-year moratorium, or 15 years in certain cases, for qualifying taxpayers.

Fee-in-lieu projects

Marion County alone met the described 2006 unemployment test for the reduced $1 million minimum under both fee-in-lieu structures.

Common questions

Q: Why did the ruling contain two job-credit rankings?
A: Legislative changes required separate treatment based on whether the credit was first earned after June 18, 2002 or during the earlier post-1995 period.

Q: Which counties qualified for the 2006 tax moratorium?
A: Allendale, Marion, McCormick, and Williamsburg.

Q: Which county received the reduced fee-in-lieu investment threshold?
A: Marion County qualified for the historical $1 million threshold.

Q: What special rules applied to Aiken and Oconee?
A: The ruling described a temporary three-tier increase for Aiken in tax years beginning in 2007 and 2008 and a temporary one-tier increase for Oconee following the loss of 1,500 jobs by one employer in 2005.

Q: Can these tables be used for a current project?
A: No. They are expressly tied to historical 2006 data and specified tax years.

Citations and references

• S.C. Code § 12-6-3360 (job tax credit and county ranking rules)
• S.C. Code § 12-6-3367 (historical tax moratorium criteria)
• S.C. Code § 4-12-30(B)(3) (Little Fee minimum investment)
• S.C. Code § 12-44-30(14) (Simplified Fee minimum investment)
• Acts 297, 384, 386, 389, and 390 of 2006 (legislative amendments reflected in the ruling)

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/RR07-1.pdf

Original ruling text

State of South Carolina

Department of Revenue
301 Gervais Street, P. O. Box 125, Columbia, South Carolina 29214
Website Address: http://www.sctax.org

SC REVENUE RULING #07-1

SUBJECT:

Job Tax Credit - County Rankings for 2006
Fee in Lieu of Property Taxes – Reduced Investment Counties
Tax Moratorium – Qualifying Counties

DATE:

February 2, 2007

MODIFIES:

SC Information Letter #06-1 and all previous documents and any oral
directives in conflict herewith.

REFERENCE:

S. C. Code Section 12-6-3360 (Supp. 2005)
Act Nos. 297, 384, 386, 389, and 390 of 2006
S. C. Code Section 4-12-30 (Supp. 2005)
S. C. Code Section 12-44-30 (Supp. 2005)

AUTHORITY:

S.C. Code Ann. Section 12-4-320 (2000)
SC Revenue Procedure #05-2

SCOPE:

The purpose of a Revenue Ruling is to provide guidance to the public
and to Department personnel. It is an advisory opinion issued to apply
principles of tax law to a set of facts or general category of taxpayers.
It is the Department’s position until superseded or modified by a
change in statute, regulation, court decision, or another Departmental
advisory opinion.

INTRODUCTION
The job tax credit, the tax moratorium, and the reduction in the minimum required fee in
lieu of property tax investment are dependent, in part, on per capita income and
unemployment rate data received from the South Carolina Employment Security
Commission and Budget and Control Board.
The purpose of this advisory opinion is to provide updated county rankings for purposes
of the job tax credit, counties qualifying for the tax moratorium, and counties qualifying
for the reduced fee in lieu of property tax investment as a result of recent legislative
amendments.

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JOB TAX CREDIT – County Rankings
South Carolina s 46 counties are ranked and designated annually for job tax credit purposes with
equal weight given to unemployment rate and per capita income and then adjusted in accordance
with special rules in South Carolina Code subsections 12-6-3360(B) and 12-6-3360(L), as
applicable. Because of amendments in the job tax credit statute, it is necessary to have two rankings
of South Carolina’s counties for purposes of the job tax credit.
Ranking List #1: For new, full time jobs created in tax years which begin in 2006, where the
job tax credit was first earned after June 18, 2002, and increases in such jobs, except as
otherwise indicated in the footnotes.
The Department has ranked South Carolina’s counties as “distressed,” “least developed,” “under
developed,” “moderately developed,” and “developed” for computation of the new job tax credit.
Distressed

Least Developed

Allendale
Barnwell
Chester
Chesterfield
Clarendon
Dillon
Hampton
Lee
Marion
Marlboro
McCormick
Williamsburg

Abbeville
Bamberg
Cherokee
Fairfield
Greenwood
Jasper
Lancaster
Laurens
Orangeburg
Union

Under
Developed
Calhoun
Colleton
Edgefield
Georgetown
Pickens
Saluda
Sumter

Moderately
Developed
Anderson
Beaufort
Charleston
Darlington
Florence
Horry
Newberry
Oconee 2
Spartanburg

Developed
Aiken 1
Berkeley
Dorchester
Greenville
Kershaw
Lexington
Richland
York

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Code Section 12-6-3360(B)(5)(h), added in 2006, allows Aiken County a three tier higher credit amount for
taxable years beginning in 2007 and 2008. Accordingly, a taxpayer claiming the job tax credit for jobs created in
Aiken County is allowed an increased job tax credit amount based upon the designation of “least developed” county
for tax years beginning in 2007 and 2008 only. See Act No. 386, Section 53 of 2006.

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Effective for tax years beginning after December 31, 2004, Code Section 12-6-3360(B)(5)(f) allows Oconee
County a one tier higher credit amount for a three year period beginning immediately following the year during
which one employer lost 1,500 jobs in a calendar year (i.e., 2005.) Accordingly, a taxpayer claiming the job tax
credit for jobs created in Oconee County is allowed an increased job tax credit amount based upon the designation of
“under developed” county for the tax year beginning in 2006 only. For tax years beginning in 2007 and 2008 the
designation will be one tier higher than Oconee County would otherwise qualify. The increased credit amount will
be published in the near future for the tax year beginning in 2007, and subsequently for the tax year beginning in
2008.

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Ranking List #2: For new, full time jobs created in tax years which begin in 2006, where
the job tax credit was first earned after 1995 and before June 19, 2002, and increases in
such jobs, except as otherwise indicated in the footnotes.
The Department has ranked South Carolina’s counties as “least developed,” “under developed,”
“moderately developed,” and “developed” for computation of the new job tax credit.
Least Developed

Under Developed

Moderately Developed

Developed

Abbeville

Colleton

Anderson

Aiken 3

Allendale

Georgetown

Calhoun

Beaufort

Bamberg

Horry

Charleston

Berkeley

Barnwell

Orangeburg

Darlington

Dorchester

Cherokee

Pickens

Florence

Greenville

Chester

Sumter

Newberry

Kershaw

Chesterfield

Oconee

Clarendon

Spartanburg

Dillon

4

Lexington
Richland
York

Edgefield
Fairfield
Greenwood
Hampton
Jasper
Lancaster
Laurens
Lee
Marion
Marlboro
McCormick
Saluda
Union
Williamsburg
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Code Section 12-6-3360(B)(5)(h), added in 2006, allows Aiken County a three tier higher credit amount for
taxable years beginning in 2007 and 2008. Accordingly, a taxpayer claiming the job tax credit for jobs created in
Aiken County is allowed an increased job tax credit amount based upon the designation of “least developed” county
for tax years beginning in 2007 and 2008 only. See Act No. 386, Section 53 of 2006.

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Effective for tax years beginning after December 31, 2004, Code Section 12-6-3360(B)(5)(f) allows Oconee
County a one tier higher credit amount for a three year period beginning immediately following the year during
which one employer lost 1,500 jobs in a calendar year (i.e., 2005.) Accordingly, a taxpayer claiming the job tax
credit for jobs created in Oconee County is allowed an increased job tax credit amount based upon the designation of
“under developed” county for the tax year beginning in 2006 only. For tax years beginning in 2007 the designation
will be one tier higher than Oconee County would otherwise qualify.

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TAX MORATORIUM – Qualifying Counties
On May 31, 2006, South Carolina Code Section 12-6-3367 was enacted, in part, to grant a 10
year moratorium (15 years in certain cases) on corporate income taxes or insurance premium
taxes for qualifying taxpayers in a county with average annual unemployment rate of at least
twice the State average during each of the last two completed calendar years, based on the most
recent unemployment rates available, or in a county with one of the three lowest per capita
incomes based on the average of the three most recent years of available average per capita
income data. The moratorium begins the first full taxable year after the taxpayer qualifies in a
county designated as a moratorium county.
For 2006, the following counties have been designated moratorium counties under South
Carolina Code Section 12-6-3367.
Allendale
Marion
McCormick
Williamsburg

FEE IN LIEU OF PROPERTY TAXES - Reduced Investment Counties
The minimum required investment necessary to qualify for the fee in lieu of property tax under
the “Little Fee,” provided in South Carolina Code Section 4-12-30(B)(3) is $2.5 million, and the
“Simplified Fee,” provided in South Carolina Code Section 12-44-30(14), is $5 million. This
investment amount, however, is reduced to $1 million for a company investing in a county with
an average annual unemployment rate of at least twice the State average during each of the last
24 months, based on data available on November 1.
For 2006, Marion County qualifies for the $1 million minimum investment under the “Little
Fee” and the “Simplified Fee.”

SOUTH CAROLINA DEPARTMENT OF REVENUE

s/Ray N. Stevens
Ray N. Stevens, Director

February 2
, 2007
Columbia, South Carolina

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