How much of a South Carolina manufacturer's property is exempt from property tax under the manufacturing partial exemption, who qualifies, and how is it claimed?

Plain-English summary

South Carolina taxes manufacturers on their real and personal property at a relatively high 10.5% assessment ratio. To soften that, the state gives manufacturing property a partial property tax exemption. SC Revenue Ruling #22-13 restates how it works after two recent law changes, superseding RR #18-13.

The exemption: under Code § 12-37-220(B)(52), 42.8571% of the property tax value of manufacturing property assessed under § 12-43-220(a)(1) (the 10.5%-ratio property used in the business) is exempt from property tax, for property tax years beginning after 2021. Importantly, it's a partial exemption of value, not a cut in the assessment ratio — most manufacturing property stays at the 10.5% ratio; the exemption just removes a big slice of the taxable value.

What changed (and why this ruling exists):

• Act No. 39 of 2021 carved public utilities out of the exemption — property owned or leased by a public utility (as defined in § 58-3-5) that is regulated by the Public Service Commission gets no partial exemption, even if it's used for manufacturing.
• Act No. 228 of 2022 raised the exemption to 42.8571%, eliminated the six-year phase-in (which had been climbing toward 14.2857% under the old law), and lifted the state's reimbursement cap to counties from $85 million to $170 million per year.

Who and what qualifies:

• Manufacturers taxed under § 12-43-220(a)(1) are the only eligible taxpayers.
• The exemption covers all property used in the conduct of the manufacturing business — machinery, equipment, office equipment, computers, and real property — not just property used directly in the manufacturing process. It applies to existing and newly acquired property alike.
• Personal property at R&D, office, or warehouse/distribution facilities that's used in the business is assessed at 10.5% under (a)(1) and qualifies. But real property used primarily for R&D, as an office building, or for warehousing/distribution is statutorily assessed at 6% under § 12-43-220(a)(2)/(3)/(4) and does not qualify.

How you claim it: you don't apply separately. The Department applies the exemption automatically when the manufacturer files its PT-300 return with the appropriate schedules (A, B, C, D, or L). Don't reduce your reported property values by the exemption — the Department computes it and certifies the exempt amount to the county.

Two more wrinkles:

• Fee-in-lieu-of-taxes (FILOT): property under a negotiated fee (Chapter 12 or 29 of Title 4, or Chapter 44 of Title 12) is not assessed under (a)(1), so it does not get the partial exemption. But property under a non-negotiated multicounty-park fee — which uses the ordinary 10.5% ratio — does qualify.
• Stacking: a manufacturer can claim both the (B)(52) partial exemption and the § 12-37-220(A)(7) five-year county property tax abatement in the same year if it meets both sets of requirements.
• Cap adjustment: if projected reimbursements would exceed $170 million in a year, the 42.8571% must be reduced proportionally so the cap isn't breached.

What this means for you

Manufacturers

Expect roughly 42.8571% of your (a)(1) manufacturing property value to come off the tax rolls automatically — just file your PT-300 with the correct schedules and don't pre-net the exemption yourself. It covers your full business-use property, existing and new. If you're under a negotiated FILOT, you're outside this exemption (your fee agreement's own reduced ratio is your benefit instead).

Utilities that also manufacture

You're excluded. Since Act No. 39 of 2021, PSC-regulated public utilities (per § 58-3-5) get no partial exemption on their property, even property used for manufacturing.

Property tax and finance teams

Map each parcel/asset to its assessment provision: (a)(1) 10.5% property qualifies; (a)(2)/(3)/(4) 6% real property (R&D, office, warehouse) does not, though 10.5% personal property at those sites does. Watch for a possible downward adjustment to 42.8571% in a capped year, and remember you can also stack the (A)(7) five-year abatement.

Common questions

Q: How much of my manufacturing property is exempt?
A: 42.8571% of the property tax value of property assessed at 10.5% under § 12-43-220(a)(1), for property tax years beginning after 2021. It's an exemption of value, not a lower assessment ratio.

Q: Do I have to apply for it?
A: No. The Department applies it automatically when you file your PT-300 with the appropriate schedules. Don't reduce your reported values by the exemption yourself.

Q: Does it apply to my fee-in-lieu-of-taxes property?
A: No for a negotiated FILOT (that property isn't assessed under (a)(1)). Yes for property under a non-negotiated multicounty-park fee, which uses the ordinary 10.5% ratio.

Q: Are utilities eligible?
A: No. Act No. 39 of 2021 excluded PSC-regulated public utilities (as defined in § 58-3-5) from the partial exemption, even for property used in manufacturing.

Q: Is 42.8571% guaranteed every year?
A: It can be reduced. If projected reimbursements to counties would exceed the $170 million annual cap, the exemption percentage must be proportionally reduced.

Citations and references

Statutes and acts:

• S.C. Code Ann. § 12-37-220(B)(52) — the 42.8571% partial exemption for manufacturing property
• S.C. Code Ann. § 12-43-220(a)(1) — 10.5% assessment ratio for manufacturing property used in the business (the qualifying class); § 12-43-220(a)(2)/(3)/(4) — 6% ratio for R&D, office, and warehouse/distribution real property (not qualifying)
• S.C. Code Ann. § 12-37-220(A)(7) — five-year county abatement (can be claimed together with the partial exemption)
• S.C. Code Ann. § 58-3-5 — "public utility" definition (excluded); § 12-4-720 — exemption application; § 12-4-540 — Department appraisal authority; § 12-37-930 — personal property valuation
• Act No. 39 of 2021 (utility exclusion); Act No. 228 of 2022 (increase, phase-in elimination, $170M cap)

Related Department guidance (described in prose, not linked): RR #22-13 supersedes RR #18-13; see RR #16-12 for applicable property tax years, and 1990 Op. Atty. Gen. No. 90-29 (cited on multicounty-park exemptions).

Source

• Landing page: SC Advisory Opinion Search
• Original PDF: RR22-13.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 REVENUE RULING #22-13

SUBJECT:

Manufacturing Property - Partial Property Tax Exemption
(Property Tax)

EFFECTIVE DATE:

Property Tax Years Beginning After 2021

SUPERCEDES:

SC Revenue Ruling #18-13

REFERENCES:

S.C. Code Section 12-4-720 (2014)
S.C. Code Section 12-37-220(B)(52) (2014)(Supp. 2021)
S.C. Code Section 12-43-220(a) (2014)
Senate Bill 1087, Section 5, Act No. 228 (2022)
House Bill 4064, Section 1, Act No. 39 (2021)

AUTHORITY:

S.C. Code Section 12-4-320 (2014)
SC Revenue Procedure #09-3

SCOPE:

The purpose of a Revenue Ruling is to provide guidance to the public.
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 Department advisory opinion.

PURPOSE OF UPDATE
The purpose of this advisory opinion is to update SC Revenue Ruling #18-13 concerning the
partial property tax exemption for manufacturing property to reflect changes made to the partial
exemption by Act. No. 39 of 2021, which excludes public utilities from application of the partial
exemption, and Act No. 228 of 2022 which increases the amount of the partial exemption,
eliminates the phase-in of the partial exemption, and increases the reimbursement cap for the
partial exemption.

1

OVERVIEW OF TAXATION OF MANUFACTURERS
Manufacturers are taxed on both their personal property and real property located in South
Carolina. For each property tax year, 1 all property owned by, or leased to, a manufacturer and
used in the conduct of its business is generally subject to tax as follows: 2
•

Personal property is valued at original cost from which a statutory depreciation
percentage is deducted each year until a residual value is reached. 3 Code Section 12-37930.

•

Real property is generally appraised.

•

An assessment ratio of 10.5% is applied to the property of the manufacturer to determine
the assessed value of the property. Code Section 12-43-220(a)(1).

However, certain real property of manufacturers, such as research and development facilities,
certain office facilities, and certain warehousing and wholesale distribution facilities, are
statutorily considered not to be used in the conduct of the business of the manufacturer and are
subject to an assessment ratio of 6%. Code Section 12-43-220(a)(2), (3), and (4). Other real
property owned, or leased by, a manufacturer and not used in the conduct of its business is
assessed at 6%, while personal property is assessed at 10.5%. Code Section 12-43-220(e) and (f).
Once the assessment ratio is applied to determine the assessed value of the property, that value is
multiplied by the applicable millage of all taxing entities in which the manufacturer’s facility is
located to determine the amount of tax owed by a manufacturer.
The Department of Revenue (“Department”) has the sole responsibility for the appraisal,
assessment, and equalization of real and personal property used in the conduct of the
manufacturer’s business. Code Section 12-4-540. The county where the manufacturer’s facility is
located applies the applicable millage and bills the manufacturer for the tax. Manufacturers
report their property to the Department by filing a PT-300 with the appropriate schedules.

See SC Revenue Ruling #16-12 for information concerning applicable property tax years for taxpayers.
This method of taxation does not apply to manufacturers that have a negotiated fee in lieu of taxes with
the county pursuant to Code Sections 4-12-30, 4-29-67 or Chapter 44, Title 12. Instead, manufacturers
negotiate through a fee agreement for a lower assessment ratio and a millage rate that is set for the life of
the agreement or which varies every five years. Manufacturers in a negotiated fee generally have their
real property valued at original cost for the life of the fee agreement.
If a manufacturer’s property is located in a multicounty industrial park under Code Section 4-1-170 and
the property is not subject to a negotiated fee, it is generally subject to a fee in lieu of taxes equal to the
property taxes that would otherwise be due on the property, meaning that the fee is generally calculated in
the same manner as ad valorem property taxes.
3
Generally, personal property cannot be depreciated below 10% of its original cost.
1
2

2

Law
Code Section 12-37-220 provides exemptions from property taxes. Item (B)(52) was added to
that section in 2017 to provide a partial exemption from property taxes for the value of
manufacturing property assessed for property tax purposes pursuant to Code Section 12-43220(a)(1) (“partial exemption”). 4 The partial exemption amount was increased in 2022 in Act
228.
The relevant provision of Code Section 12-37-220(B) now provides:
In addition to the exemptions provided in subsection (A), the following classes of
property are exempt from ad valorem taxation subject to the provisions of Section
12-4-720 [relating to the application process for a property tax exemption]:

5
(52)(a)(i) 42.8571 percent of the property tax value of manufacturing property
assessed for property tax purposes pursuant to Section 12-43-220(a)(1). The
exemption allowed by this item does not apply to property owned or leased by a
public utility, as defined in Section 58-3-5, that is regulated by the Public Service
Commission, regardless of whether the property is used for manufacturing. For
purposes of this item, if the exemption is applied to real property, then it must be
applied to the property tax value as it may be adjusted downward to reflect the limit
imposed pursuant to Section 6, Article X of the South Carolina Constitution, 1895. 6
Act No. 228 provides that the new partial exemption is effective for property tax years beginning
after 2021. 7 (Act No. 228 of 2022, Section 5.C.) Act No. 228 also increased the amount of
reimbursement to the counties for revenues lost as a result of the increase in the partial
exemption from $85 million per year to $170 million per year and eliminated the phase-in of the
partial exemption.

The relief provided is in the form of a partial exemption for the property tax value of manufacturing
property used in the conduct of a manufacturer’s business and assessed pursuant to Code Section 12-43220(a)(1). It is not a reduction in the assessment ratio applicable to the property. For most manufacturing
property not subject to a negotiated fee in lieu of taxes, the assessment ratio applicable to manufacturer’s
property remains at 10.5%.
5
This amount may be reduced. See Question and Answer 10.
6
Act No. 228 of 2022, Section 5.A. Code Section 12-37-220(B)(52)(b), (c), and (d) address: 1) how the
political subdivisions of the State will be reimbursed for lost funds as a result of the partial exemption, 2)
how the partial exemption will be applied if the amount of the partial exemption for all qualifying
property exceeds $170 million in a single year, and 3) how property subject to the partial exemption will
be treated for bonded indebtedness purposes.
7
Previously, the partial exemption was being phased in over a six-year period beginning with property tax
year 2018 until it ultimately was equal to 14.2857% of the manufacturing property’s value.
4

3

Questions
Eligible Taxpayers

1. Q. Which taxpayers are eligible for the partial exemption?
   A. Manufacturers taxed under Code Section 12-43-220(a)(1) are the only taxpayers eligible
   for the partial exemption.
2. Q. Are public utilities as defined in Code Section 58-3-5 which are regulated by the Public
   Service Commission eligible for the partial exemption?
   A. No. The exemption contained in Code Section 12-37-220(B)(52), as amended by Act No.
   39 of 2021, specifically provides that the partial exemption does not apply to property
   owned or leased by a public utility as defined in Code Section 58-3-5 which is regulated
   by the Public Service Commission whether or not such property is used for
   manufacturing.
   Code Section 58-3-5(6) defines “public utility” as a “public utility as defined in Section
   58-5-10, telephone utility as defined in Section 58-9-10, government-owned
   telecommunications service provider as defined in Section 58-9-2610, radio common
   carrier as defined in Section 58-11-10, carriers governed by Chapter 13 of Title 58,
   railroads and railways as defined in Section 58-17-10, motor vehicle carrier as defined in
   Section 58-17-10, motor vehicle carrier as defined in Section 58-23-10, or electrical
   utility as defined in Section 58-27-10.”
   Qualifying Property
3. Q. What qualifies as manufacturing property assessed for property tax purposes pursuant to
   Code Section 12-43-220(a)(1)?
   A. Property owned or leased to a manufacturer which is used in the conduct of the
   manufacturing business will qualify as manufacturing property eligible for the partial
   exemption as that property is assessed for property tax purposes under Code Section 1243-220(a)(1). Property which is not used in the conduct of the business of a manufacturer
   is assessed under Code Section 12-43-220(e) or (f).
4. Q. Does the partial exemption apply only to property used directly in the manufacturing
   process itself?
   A. No. Except as otherwise provided by law, the partial exemption will apply to all property
   used in the conduct of the manufacturing business by a manufacturer, not just the
   property used directly in the manufacturing process.

4

Any property used in the conduct of the manufacturing business, including items such as
machinery and equipment, office equipment, computers and real property, is eligible for
the partial exemption.

5. Q. Does the new partial exemption amount apply to existing manufacturing property or does
   it only apply to manufacturing property acquired in property tax year 2022 and
   thereafter? 8
   A. The partial exemption applies to existing real and personal manufacturing property
   owned or leased by the manufacturer as well as newly acquired manufacturing property,
   if such property is used in the conduct of the manufacturing business.
6. Q. Does the partial exemption apply to manufacturing property of a manufacturer that is
   subject to a negotiated fee in lieu of taxes under Chapter 12, Title 4; Chapter 29, Title 4;
   or Chapter 44, Title 12 (“negotiated fee”)? 9
   A. No. The partial exemption will not apply to manufacturing property subject to a
   negotiated fee in lieu of taxes under Chapter 12, Title 4; Chapter 29, Title 4; or Chapter
   44, Title 12. The partial exemption only applies to manufacturing property assessed for
   property tax purposes pursuant to Code Section 12-43-220(a)(1) (the 10.5% assessment
   ratio).
   Manufacturing property that is subject to a negotiated fee is not assessed pursuant to
   Code Section 12-43-220(a)(1). Instead, it is subject to a fee in lieu of taxes at an
   assessment ratio as provided for in the relevant negotiated fee code sections that allow for
   an alternative assessment ratio ranging generally from 4% to 10.5%.
7. Q. Does the partial exemption apply to manufacturing property of a manufacturer that is
   subject to a “non-negotiated multicounty park fee”?
   A. Yes. The partial exemption applies to manufacturing property that is subject to a nonnegotiated multicounty park fee, but not to a negotiated multicounty park fee.
   Section 13, Article VIII of the South Carolina Constitution and Code Section 4-1-170
   allow two or more counties to jointly develop an industrial or business park for purposes
   of sharing the administration of, and revenue and expenses resulting from, property
   located in the park (“multicounty park”).

For property tax years 2018 through 2021, manufacturing property was subject to the phased-in
exemption amount applicable to each of those years as provided in Section 19.B of Act No. 40 of 2017.
9
The negotiated fee in lieu of tax provisions allow a manufacturer who is making a capital investment of
$2.5 million or more ($1 million in certain instances) at a project in South Carolina to negotiate a reduced
assessment ratio, a locked millage rate or a millage rate that varies every five years based on the prior five
year average, and a locked fair market value for real property for up to 40 years or more for the project.
Other benefits may also be available.
8

5

Section 13(D), Article VIII of the South Carolina Constitution provides with respect to a
multicounty park:
… The area comprising the parks and all property having a situs therein is
exempt from all ad valorem taxation. The owners or lessees of any
property situated in the park shall pay an amount equivalent to the
property taxes or other in-lieu-of payments that would have been due and
payable except for the exemption herein provided. …
There are two types of fee in lieu of tax arrangements associated with a multicounty park.
The first is a fee that has been negotiated between the county and a company and
provides for a reduced assessment ratio for qualifying property and all the other benefits
associated with a negotiated fee under Chapter 44, Title 12, or Code Sections 4-12-30 and
4-29-67, where the qualifying property is located in a multicounty park (“negotiated
multicounty park fee”). The second includes property that is located in a multicounty
park but is not subject to a negotiated fee. The property which is located in the
multicounty park, but which is not subject to a negotiated fee, is subject to a fee instead
of ad valorem property taxes which is equivalent to the property taxes that would be due
on the property if it were not located in the multicounty park (“non-negotiated
multicounty park fee”).
Unlike the negotiated multicounty park fee, the non-negotiated multicounty park fee
property uses the assessment ratio and the valuation that would otherwise be applicable to
the property if it were not located in a multicounty park. For manufacturers, the
assessment ratio is generally 10.5%. Since the partial exemption is applicable if the
manufacturing property is assessed under Code Section 12-43-220(a)(1), and nonnegotiated multicounty park fee manufacturing property is generally assessed under that
provision, manufacturing property subject to a non-negotiated multicounty park fee is
eligible for the partial exemption from value for qualifying manufacturing property. 10
Application of the Partial Exemption to Eligible Property

8. Q. Will a manufacturer need to apply for the partial exemption pursuant to Code Section 124-720 or will the exemption automatically apply when it files its manufacturing return,
   the PT-300, with appropriate schedules attached?
   A. The partial exemption will automatically be applied when the manufacturer files its
   manufacturing return, the PT-300, in conjunction with appropriate schedules (the
   In a 1990 opinion, the South Carolina Attorney General was asked whether the five-year exemption
   from county taxes for certain manufacturing property contained in Code Section 12-37-220(a)(7) applied
   to property located in a multicounty park. The South Carolina Attorney General opined that the
   exemption applied to such property stating that if a manufacturer would ordinarily be entitled to the
   exemption if the property were subject to ad valorem property taxes instead of a multicounty park fee, the
   exemption should apply, relying on the premise that the fee owed under the multicounty park fee must be
   the same as any taxes that would be owed if the property were subject to ad valorem property taxes. See,
   1990 Op. Atty. Gen. No. 90-29.
   10

6

appropriate schedules are usually the Schedules A, B, C, D or L). 11 All property reported
on the appropriate schedules will be subject to the partial exemption. Since the partial
exemption will be applied by the Department, a manufacturer should not reduce the value
of its property by the amount of the partial exemption when reporting property on the PT300 and applicable schedules. The amount of the partial exemption will be reflected on
the certification that is sent from the Department to the county.

9. Q. May manufacturing property qualify for both the partial exemption under Code Section
   12-37-220(B)(52) and the five-year abatement from county property taxes provided for in
   Code Section 12-37-220(A)(7)?
   A. Yes, if manufacturing property meets the requirements for both the partial exemption
   under Code Section 12-37-220(B)(52) and the abatement from county property taxes in
   Code Section 12-37-220(A)(7), a manufacturer may qualify for both for the same
   property tax year.
10. Q. Is the partial exemption amount always set at 42.8571% of the value of manufacturing
    property or may that amount be adjusted in any manner?
    A. The reimbursements from the State to political subdivisions for the loss of revenue
    attributable to the partial exemption are capped at $170 million for a single fiscal year. To
    the extent in any year reimbursements are projected by the Revenue and Fiscal Affairs
    Office to exceed the $170 million, the partial exemption amount must be proportionally
    reduced so the cap amount is not exceeded. Therefore, the 42.8571% must be adjusted
    downward in the event that the reimbursement cap of $170 million will be exceeded.
    Property at Office Buildings or Used for Research and Development or Warehousing and
    Wholesale Distribution
11. Q. Will personal property owned or leased to a manufacturer and used for research and
    development be considered manufacturing property and therefore qualify for the partial
    exemption?
    A. If personal property used for research and development is considered used in the
    conduct of the business of the manufacturer, then it is assessed pursuant to Code Section
    12-43-220(a)(1) and will receive the partial exemption. Manufacturers who qualify
    because the personal property is used in the conduct of their business will file a PT-300
    with a Schedule C – “Manufacturing Research and Development.” The partial exemption
    will automatically be applied by the Department to this property if the appropriate
    schedule is filed.
    Real property owned by, or leased to, a manufacturer and used primarily for research
    and development is not considered used by a manufacturer in the conduct of the business
    of the manufacturer by statute and is assessed at 6% pursuant to Code Section 12-43220(a)(2). This real property will not qualify for the partial exemption.
    11

Other schedules may be applicable in certain specific instances.

7

12. Q. Will personal property owned by, or leased to, a manufacturer which is located in an
office facility that meets the qualifications of Code Section 12-43-220(a)(3) qualify for
the partial exemption?
A. If the personal property located at an applicable office facility is considered used in the
conduct of the business of the manufacturer, then it is assessed pursuant to Code Section
12-43-220(a)(1) and will receive the partial exemption.
Manufacturers who qualify because the personal property is used in the conduct of their
business will file a PT-300 with a Schedule D – “Manufacturing Corporate Headquarters
Distribution Facility.” The partial exemption will automatically be applied by the
Department to this property if the appropriate schedule is filed.
Real property owned by, or leased to, a manufacturer and used primarily as an office
building is not considered used in the conduct of the business of the manufacturer by
statute and is assessed at 6% pursuant to Code Section 12-43-220(a)(3) if the office
building is not located on the premises of, or contiguous to, the plant site of the
manufacturer. This real property will not qualify for the partial exemption.

13. Q. Will personal property owned by, or leased to, a manufacturer which is used primarily
    in a warehousing and wholesale distribution area that meets the requirements of Code
    Section 12-43-220(a)(4) qualify for the partial exemption?
    A. If the personal property used for warehousing or wholesale distribution is considered
    used in the conduct of the business of the manufacturer, then it is assessed pursuant to
    Code Section 12-43-220(a)(1) and will receive the partial exemption. Manufacturers who
    qualify because the personal property is used in the conduct of their business will file a
    PT-300 with a Schedule L – “Manufacturing Warehouse.” The partial exemption will
    automatically be applied by the Department to this property if the appropriate schedule is
    filed.
    Real property owned by, or leased to, a manufacturer and used primarily for
    warehousing and wholesale distribution is not considered used in the conduct of the
    business of the manufacturer by statute and is assessed at 6% pursuant to Code Section
    12-43-220(a)(4) if it is physically separated from the manufacturing plant or the area is
    separated from the manufacturing plant by a permanent wall. This real property will not
    qualify for the partial exemption.
    SOUTH CAROLINA DEPARTMENT OF REVENUE

s/W. Hartley Powell
W. Hartley Powell, Director
November 30
, 2022
Columbia, South Carolina
8