The South Carolina Department of Revenue (SC DOR) annually ranks and designates the State’s 46 counties into four tiers based on unemployment rate and per capita income (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 the State. 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 from $1,500 to $25,000 per job, per year for up to five years.

Last week, the SC DOR issued SC Information Letter #22-23 that lists the county rankings and JTC Tiers for 2023.

For new full-time jobs created in tax years beginning in 2022, the JTC amount are as follows for the following counties:

• Tier I ($1,500 per year, per job): Aiken, Beaufort, Berkeley, Charleston, Greenville, Kershaw, Lexington, Newberry, Oconee, Richland, York
• Tier II ($2,750 per year, per job): Anderson, Calhoun, Dorchester, Edgefield, Florence, Georgetown, Hampton, Lancaster, Pickens, Saluda, Spartanburg
• Tier III ($20,250 per year, per job): Abbeville, Chesterfield, Clarendon, Colleton, Darlington, Fairfield, Greenwood, Horry, Jasper, Laurens, McCormick, Sumter
• Tier IV ($25,000 per year, per job): Allendale, Bamberg, Barnwell, Cherokee, Chester, Dillon, Lee, Marion, Marlboro, Orangeburg, Union, Williamsburg

In 2023, all counties remained in the same tier ranking they were in for 2022.

Businesses making capital investments and/or creating new jobs might also qualify for employee withholding tax credits or job development credits (JDCs) (S.C. Code Section 12-10-80). Traditionally, only new jobs created that meet the annual per capita income in the county where the new jobs are being created will qualify for the job development credit.

Last week, the SC DOR issued SC Information Letter #22-24 that lists per capita income levels for 2023 for the state as a whole and each respective county. There were major changes to the state per capita income from 2022 to 2023 with the state per capita income for 2023 set at $52,467 annually or $26.23 hourly. Additionally, every county’s per capita income increased from 2022 to 2023. For example, in Beaufort County the new hourly per capita income wage is $35.08 for 2023 as opposed to $30.65 for 2022. This means, employers will likely have to offer higher wages in 2023 to qualify for JDCs for new jobs and investments made in the coming year.

JTCs, JDCs, and other tax incentives can be complicated and are subject to changing legislation, government guidance, and court interpretation. Therefore, businesses should seek professional advice to explore potential incentive eligibility and an effective implementation strategy.

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