Sc Sch.tc 8 - Corporate Headquarters Credit (Page 2 of 2) in pdf

INSTRUCTIONS FOR SOUTH CAROLINA SCHEDULE TC-8

Line 1

Direct lease costs qualify for the credit during the first five years of operations for the corporate headquarters. See General

Information for explanation of qualifying tangible personal property. (The basis of real and personal property for South

Carolina income tax purposes must be reduced by the amount of the credit claimed with respect to the property.)

Line 2

Total cost of establishing or expanding a corporate headquarters must be fifty thousand dollars or more and must add at least

forty new jobs which are full-time in South Carolina, with at least twenty of the new jobs classified as headquarters staff

employees, and the balance of the new jobs classified as either headquarters related jobs or research and development

related jobs.

Line 4

The amount of any Corporate Headquarters credit must be reduced by the amount of any past-due debt owed to the State of

South Carolina by the taxpayer.

Line 6

The Corporate Headquarters Credit is allowed as a credit against corporate income tax, corporate license fee, or bank tax.

Line 7

The Corporate Headquarters Credit is non-refundable, but any unused credit generally may be carried forward for ten taxable

years. See carryover provisions below.

GENERAL INFORMATION - SCHEDULE TC-8

Time for Claiming the Credit and Recapture

Generally the credit may not be claimed until the taxable year during which headquarters establishment, expansion or addition is

placed in service for federal income tax purposes. However, for headquarters construction projects placed in service for federal income

tax purposes, the corporation can claim the credit for the taxable year in which the qualifying property is placed in service. Credits

cannot be claimed for costs incurred more than three years after the taxable year in which the first property for which the credit is

claimed is placed in service.

The corporation must have documented plans to meet the staffing requirement at the time the first credit is claimed. If the required

addition to jobs is not met by the end of the second taxable year following the last taxable year the credit is claimed, the corporation

must increase its tax for that year by the total amount of credits used to reduce tax in earlier years.

Carryover and Qualifying Personal Property Provisions

The credit available to a corporation establishing or expanding its corporate headquarters is nonrefundable and ordinarily may be

carried forward for 10 years. The credit may be carried forward for 15 years if 75 qualifying new full time jobs are created which have

an average cash compensation level of more than one and one-half times the per capita income of South Carolina and result in an

average South Carolina employee cash compensation level for all employees in this State of more than twice the per capita income of

this State at the end of the tax year in which the jobs are created. A qualifying corporate headquarters establishment or expansion

meeting the 75 jobs and per capita income requirements may claim a credit for twenty percent of the cost of tangible personal property

if the personal property is:

(a)

capitalized as personal property for income tax purposes under the Internal Revenue Code; and

(b)

purchased for the establishment, expansion, or addition of a corporate headquarters or a research and development facility

which is part of the same corporate project as the headquarters establishment addition or expansion; and

(c)

used for corporate headquarters related functions and services or research and development related functions and services in

South Carolina.

Definitions

For the purpose of this credit, the term:

(1)

"Corporate headquarters" means the facility or portion of a facility where corporate staff employees are physically employed and

where the majority of the company's financial, personnel, legal, planning or other headquarters related functions are handled

either on a regional or national basis.

(2)

"New job" means a job created by an employer in South Carolina at the time a new facility, expansion or addition is initially

staffed, but does not include a job created when an employee is shifted from an existing location in this state to work in a new or

expanded facility.

(3)

"Full time" means a job requiring a minimum of thirty-five hours of an employee's time a week for the entire normal year of

corporate operations or a job requiring a minimum of thirty-five hours of an employee's time for a week for a year in which the

employee was initially hired for or transferred (from another state) to the corporate headquarters or research and development

facility in South Carolina.

For more definitions see Section 12-6-3410.

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Sc Sch.tc 8 - Corporate Headquarters Credit Page 2

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