In South Carolina, only local government levies property taxes. There is no state tax on real or personal property. A company’s property tax liability is a function of:
Property Value (less depreciation) x Assessment Ratio x Millage.
Example: Property tax due assuming $1,000 property value with the deprecation removed and millage of 300. $1,000 x 10.5% x .300 = $31.50
The Department of Revenue determines the property value or fair market value of a business’ real (land and building) and personal property (machinery and equipment) to assure equitable local treatment.
The fair market value is then assessed at rates established by the Constitution. For manufacturers, real and personal property are both assessed at 10.5 percent. The assessment ratio for all other businesses is 6 percent for real property and 10.5 percent for personal property. (For homeowners, primary residences are assessed at 4 percent.)
Depreciation rates are determined by the S.C. Department of Revenue based on the type of machinery and manufacturing process. For manufacturers, personal property is allowed to depreciate annually at a rate set in law according to the company’s primary function (the most common depreciation rate is 11 percent per year to a base of 10 percent of the original property value). Please note that the S.C. Department of Revenue makes the final determination of allowable depreciation.
The local millage rate is applied to the assessed depreciated value to determine taxes due. Millage rates in South Carolina are site specific and set annually by local government. A mill is equal to $0.001.
Effective Property Tax Rates: County of Lexington, SC (Tax Year 2016) xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Fair Market Assessment Assessed Property Taxes($) Taxes Per $100 Assessed Value ($) Taxes as a Percentage of Fair Market Value (%) Property Type Value ($) Rate (%) Valuation ($) High* Average** Low*** High* Average** Low*** High* Average** Low*** Real Property -- -- -- -- -- -- -- -- -- -- -- -- Owner Occupied Residential $100,000.00 4.0% $4,000.00 $806.05 $625.70 $561.93 $20.15 $15.64 $14.05 0.81% 0.63% 0.56% Rental Residential $500,000.00 6.0% $30,000.00 $16,849.46 $13,234.70 $9,170.76 $56.16 $44.12 $30.57 3.37% 2.65% 1.83% Commercial $2500,000.00 6.0% $150,000.00 $84,247.30 $66,173.50 $45,853.80 $56.16 $44.12 $30.57 3.37% 2.65% 1.83% Industrial $10,000,000.00 10.50% $1,050,000.00 $629,931.10 $483,929.50 $337,851.60 $59.99 $46.09 $32.18 6.30% 4.84% 3.38% Personal Property -- -- -- -- -- -- -- -- -- -- -- -- Automobile (Personal Use) $25,000.00 6.00% $1,500.00 $842.47 $661.74 $458.54 $56.16 $44.12 $30.57 3.37% 2.65% 1.83% Automobile (Business Use) $25,000.00 10.50% $2,625.00 $1,574.83 $1,209.82 $844.63 $59.99 $46.09 $32.18 6.30% 4.84% 3.38% Business Machinery & Equipment $2,500,000.00 10.50% $262,500.00 $157,482.78 $120,982.38 $84,462.90 $59.99 $46.09 $32.18 6.30% 4.84% 3.38%
*The subject property is located in the taxing district in the county with the lowest combined effective rate.
**The subject property is located in a theoretical taxing district in the county with the average combined effective tax rate of all districts.
***The subject property is located in the taxing district in the county with highest combined applicable tax rate.
Note: The above computations do not incorporate statutory and-or discretionary economic development incentives potentially available for qualifying new and expanding employers.
In support of business, South Carolina exempts three classes of property from local property taxation:
- - All inventories (raw materials, work-in-progress, and finished goods)
- - All intangible property
- - All pollution control equipment
A 5 year Property Tax Abatement by law for manufacturers and research and development facilities (investing $50,000 or more) and distribution or headquarters facilities (investing $50,000 or more creating 75 new full-time jobs) are entitled to the tax abatement from county ordinary operating taxes.
The abatement usually represents a reduction of 20 to 50 percent of the total millage, depending on the county.
In addition to the statutory incentives, counties also use discretionary incentives at the local level to address the specific needs of individual companies on a case-by-case basis. A company can either use the statutory abatement or the discretionary fee-in-lieu of tax, but not both.
Fee-in-Lieu of Property Taxes (FILOT)
Under this program, companies investing more than $5 million, the Lexington County threshold, are eligible to negotiate a lower assessment ratio, and stabilize millage rates for up to 20 years.
- Assessment ratio can be lowered from 10.5% to as low as 6%
- Existing buildings already on the tax rolls may not be included in the FILOT unless new equipment investment is over $45 million
- Real and personal property may be included under the FILOT agreement
- Qualifying property is subject to the fee for 20 years up to 30 years
- Company has 5 years to meet the investment requirement
Super Fee-in-Lieu of Property Taxes (Super FILOT)
A county may negotiate a Super FILOT with a company that meets one of these qualifications:
Create 125 new jobs and invest $150 million
Single investment of at least $400 million
Assessment ratio can be lowered to 4%
Company has 8 years to meet the investment requirement
Qualifying property is subject to the fee for 30 years up to 40 years
Special Source Revenue Credit (SSRC)
A county has the discretion to offer a Special Source Revenue Credit to help offset a project’s infrastructure and/or machinery and equipment costs. This is done in the form of a credit off the tax payment due to the county in designated years.
Manufacturer’s Warehouse Property Tax
Manufacturers that own or lease real property for the primary purpose of warehousing and wholesale distribution, receive a 6% assessment ratio on the associated property tax. The warehouse must not be physically attached to a manufacturing plant unless the distribution area is separated by a permanent wall.