On June 17th, South Carolina Governor Henry McMaster signed Act No. 228, the “Comprehensive Tax Cut Act of 2022” (“Act”), into law after extensive debate and efforts by leadership of the State House of Representatives and Senate.  The Act, among other changes, effectively reduces the manufacturing property tax assessment ratio by providing a valuation discount, so long as funding exists to provide such reduction.  Companies and counties will need to consider the implications of this new law when evaluating the benefits of existing and future incentive packages. Property taxes in Sout ..read more

The South Carolina Department of Revenue (DOR) issued a draft Revenue Ruling to provide guidelines to counties who are considering imposing, or are currently imposing, a transportation tax. Comments on the draft Revenue Ruling can be submitted until April 12, 2022, and a conference, if requested, will be held on April 19, 2022 at 11:00 am at DOR’s main office in Columbia. The draft Revenue Ruling follows the South Carolina Supreme Court decision in Richland County and the Central Midlands Regional Transit Authority v. S.C. Department of Revenue, 811 S.E.2d 758 (2018) which determined DOR had a ..read more

The South Carolina Department of Revenue (SC DOR) annually ranks and designates the state’s 46 counties into four tiers based upon unemployment rate and per capita income (See S.C. Code Section 12-6-3360(B). Tier designation is important because it directly affects the amount of Job Tax Credit (JTC) a business can receive as a reward for creating and maintaining new jobs in South Carolina. JTCs are valuable state income tax credits and are available to new businesses or existing businesses adding new jobs to South Carolina. For each new full-time job created, the tax credit ranges in value fro ..read more

South Carolina rollback tax laws changed in 2021, with potentially significant implications for real estate transactions where rollback taxes may come into play. What are rollback taxes? South Carolina Code Section 12-43-220 requires that any time a property changes from receiving the benefit of an agricultural use special assessment ratio property tax exemption to any other use, rollback taxes are to be assessed and billed to the property.  The amount of the rollback taxes is equal to the sum of the differences, if any, between the taxes paid or payable on the basis of the fair market va ..read more

South Carolina businesses have historically been subject to business license taxes on their gross income that vary widely from jurisdiction to jurisdiction. The South Carolina Business License Tax Standardization Act (the “Act”) was enacted in 2020, but the effective date was generally delayed until January 1, 2022. The Act should greatly simplify the previous complex and burdensome state business license tax regime. The Act creates uniformity by establishing a formal appeals process for taxpayers, setting one standard 12-month filing period (May 1st to April 30th), requiring one standard appl ..read more

Corporations, limited liability companies, and certain other business entities can make an election with the Internal Revenue Service to be taxed under Subchapter S of the Internal Revenue Code.  If such an election is made, the business entity becomes an “S corporation” for federal income tax purposes, and also under the tax laws of many states.  The S corporation must file an annual tax return with the Internal Revenue Service (Form 1120S), and an annual state income tax return with those states that recognize S corporations.  The S corporation does not pay income tax, and its ..read more

President Biden has proposed major changes to the Federal tax laws, some of which are sought to be effective earlier in 2021 (i.e., we are already operating under these changes, if they later become adopted), as compared to the effective date the new tax law changes may be passed by Congress or a later effective date (such as beginning January 1, 2022).  The Biden administration proposals must first be approved by Congress.  As Congress is now considering these tax law change proposals, the following is a summary of some of the most important: Increase the corporate income tax rate ..read more

Due to unprecedented temporary closings of offices and businesses and stay-at-home orders issued across the United States during the Coronavirus (COVID-19) pandemic, many businesses have implemented temporary work at home options for employees. As a result, the South Carolina Department of Revenue (SCDOR) announced temporary relief regarding a business’s establishment of South Carolina state tax nexus solely because an employee is temporarily working in a different work location due to COVID-19, and also provided guidance with respect to employer withholding requirements for these employees (S ..read more

The State of South Carolina has now adopted legislation allowing “pass through” entities to elect each year to be taxed at the entity level on their active trade or business income instead of having their owners taxed at the individual level on this income. This includes partnerships, S-corporations and LLCs taxed as partnerships or S-corporations.  This election can be filed for tax years beginning after December 31, 2020. South Carolina has now joined a growing number of states that have enacted federal state and local tax “workaround” legislation, and which shifts state and local incom ..read more

Tobacco manufacturers and distributors have long made refund/rebate payments to retailers for the retailer’s purchase of cigarettes and other tobacco products from the manufacturer, provided the retailer reduces the price of the cigarettes and other tobacco products sold to the retailer’s customers. In 2020, the South Carolina Department of Revenue issued SC Revenue Ruling #20-3 (“Buydowns – Tobacco Company Payments to Retailers”), and related Information Letter #20-35, administratively determining that these “buydown” payments from the manufacturer/distributer should be subject to South Carol ..read more