*[co-author: Drew Turner]
S.C. Department of Revenue (“SCDOR”) Information Letter #24-6 addresses recent amendments to the South Carolina Abandoned Buildings Revitalization Act (the “Act”).
The Act was enacted in 2013 to incentivize the rehabilitation, renovation, and redevelopment of abandoned buildings in South Carolina by providing tax credits to taxpayers for redeveloping abandoned building sites. To claim credits under the Act, a taxpayer must file a Notice of Intent to Rehabilitate with the South Carolina Department of Revenue (“Notice of Intent”).
The recent amendments extend the sunsetting of the credit to December 31, 2035, making the credit available for ten years longer than previously provided. The amendments also increase the cap of the credit to $700,000 per unit (up from the previous cap of $500,000 per unit), providing a better return for taxpayers seeking to engage in revitalization projects. Generally, taxpayers are not allowed to amend a Notice of Intent once it has been filed. However, given the underlying intent of the Act, the SCDOR is allowing taxpayers to amend certain Notices of Intent for a brief period.
SCDOR will allow any taxpayer that has filed a Notice of Intent, but has not yet placed the qualifying abandoned building into service, to amend the Notice of Intent until October 15, 2024. For any taxpayer seeking to amend the estimated rehabilitation expenses set forth in a Notice of Intent, it is important to note:
- The credit awarded is based on the actual cost of rehabilitation, but the actual cost must be between 80% and 125% of the amended estimated rehabilitation expenses.
- If the actual cost is under 80% of the amended estimated rehabilitation expenses, the credit will not be allowed.
- If the actual cost is over 125% of the estimated rehabilitation expenses, only those costs up to 125% of the estimated rehabilitation expenses will be included in calculating the credit.
The amendments are beneficial for all developers in South Carolina renovating abandoned properties, but the time for amending a Notice of Intent is short.
*Drew Turner (2024 Summer Law Clerk, 1L at University of South Carolina School of Law)
