South Carolina S 1021 went into effect May 20, 2024. This Act extends the state’s abandoned buildings tax credit (SC Code of Laws: 12-67-100) for a period of 10 years until December 31, 2035 and increases the maximum annual credit. South Carolina’s program is particularly material and flexible, categorizing an “abandoned building” as a separate commercial structure having at least 66% of its space having been vacant (and not warehousing or storage at profit) for at least five years prior to the filing of a formal Notice of Intent to Rehabilitate.
A taxpayer who rehabilitates a locally certified abandoned building in South Carolina is eligible for either:
- State Income Tax Credit:
- 25% of rehabilitation expenses
- $700,000 annual maximum per taxpayer, per site
- Capped at 125% of the expenses submitted in the related Notice of Intent to Rehabilitate
- Taken in three equal installments
- Five-year carry-forward
- May not take in conjunction with the Textiles Communities Revitalization Act or the Retail Facilities Revitalization Act
- Real Property Tax Credit:
- 25% of rehabilitation expenses
- $700,000 annual maximum per taxpayer, per site
- Capped at 125% of the expenses submitted in the related Notice of Intent to Rehabilitate
- May be applied on up to 75% of property tax liability for up to eight years
- Negotiated with the local taxing jurisdiction(s)
Additionally, Act S 1021 created new short line (Class II/Class III) railroad credits:
- State Income Tax Credit:
- 50% of qualified railroad reconstruction or replacement expenditures
- Capped annually at the lesser of:
- $5,000 per mile of rail inside the state OR
- $1,500,000
- Five-year carry-forward
If you have any questions about the new legislation or changes to the existing abandoned buildings tax credit, please reach out to the Ryan contacts listed below.
TECHNICAL INFORMATION CONTACTS:
Allea Newbold
Principal
Ryan
813.371.0566
allea.newbold@ryan.com
Matt Lowell
Principal
Ryan
321.251.2924
matt.lowell@ryan.com
Savannah Jermance
Director
Ryan
505.312.4411
savannah.jermance@ryan.com
Jay Patel
Senior Manager
Ryan
210.429.8271
jay.patel@ryan.com
The material presented in this communication is intended to provide general information only and should solely be seen as broad guidance and not directed to the particular facts or circumstances of any individual who may read this publication. No liability is accepted for acts or omissions taken in reliance upon the content of this piece. Before taking (or not taking) any action, readers should seek professional advice specific to their situation from Ryan, LLC or other tax professionals. For additional information about this topic, please contact us at info@ryan.com.