Sc Sch Tc-4sb -Small Business Jobs Credit (Page 5 of 14) in pdf

GENERAL INSTRUCTIONS

Note: This credit applies only for tax years beginning after 2006.

The South Carolina Code has three job tax credit provisions:

(1) a traditional job tax credit, by completing SC SCH. TC-4;

(2) a small business jobs credit, by completing this form; and

(3) an accelerated small business jobs credit, by completing the SC SCH.TC-4SA.

In general, the job tax credit applies to qualifying types of new and expanding businesses creating a minimum monthly average of new,

full time jobs in South Carolina. Sole proprietorships, partnerships, corporations, S corporations, and limited liability companies that are

a qualifying business type (e.g., manufacturing facility, processing facility, etc.) are eligible. The credit taken in one tax year may not

exceed 50% of the taxpayer’s South Carolina income tax, insurance premium tax, or bank tax liability. Any unused credit may be carried

forward for 15 years.

For tax years beginning on or after January 1, 2006, the new jobs credit was expanded to make it available to certain types of small

businesses having 99 or fewer total employees worldwide, by lowering the monthly average number of jobs required to be created. The

small business provisions are in SC Code Section 12-6-3360(C)(2). A taxpayer eligible for this credit may claim instead the

TC-4SA Accelerated Small Business Jobs Credit provided in SC Code Section 12-6-3362.

Resources available on our website

Advisory Opinions at "Law and Policy: Dept. Advisory Opinions > Index > INCOME". Scroll down to the heading "Jobs Tax Credit"

including:

SC Revenue Ruling #99-5, a comprehensive question and answer advisory opinion about the 1996 version of the new jobs credit

SC Revenue Ruling #05-5 defining "expansion"

SC Revenue Ruling #87-5 defining "full time employee" and " service related industry"

Information Letters containing county designations for each year

South Carolina Tax Incentives for Economic Development, which is updated annually, at "DOR Services: Publications >

Information for Tax Professionals".

Who may claim

For tax years beginning after December 31, 2005, a qualifying taxpayer with 99 or fewer employees that increases employment by two

or more full-time jobs is allowed a credit for not more than five consecutive years, beginning with the year the new full-time jobs are

created.

Qualifying taxpayers include those that operate:

manufacturing, tourism, processing, warehousing, distribution, research and development facilities; corporate offices, qualifying

service-related facilities, agribusiness operations, extraordinary retail establishments, qualifying technology intensive facilities, and

banks; and

retail facilities and service-related industries located in counties designated as Tier IV.

Credits are not allowed for a tax year in which the new full-time job increase falls below the minimum level of two (2).

Credits may be claimed against corporate or individual income tax, bank tax, or insurance premium tax.

Special requirements for hotels, motels, and certain “qualifying service-related facilities”:

The number of jobs that must be created at a hotel or motel is 20 or more.

Certain “qualifying service-related facilities” must create at least:

175 jobs at a single location; or

150 jobs at a single location comprised of a building or portion of a building that has been vacant for at least 12 consecutive months

prior to the taxpayer's investment; or

100 jobs at a single location and the jobs have an average cash compensation level of more than 1.5 times the state or county per

capita income, whichever is lower; or

50 jobs at a single location and the jobs have an average cash compensation level of more than 2 times the state or county per

capita income, whichever is lower; or

25 jobs at a single location and the jobs have an average cash compensation level of more than 2.5 times the state or county per

capita income, whichever is lower.

These special requirements do not apply to:

“service-related industries” located in Tier IV counties; or

healthcare-related facilities in NAICS Manual Section 62: subsectors 621 (ambulatory health care), 622 (hospitals), and 623

(residential care facilities).

NOTE: Businesses engaged in legal, accounting, banking, or investment services or retail sales are not “qualifying service-related

facilities."

Sc Sch Tc-4sb -Small Business Jobs Credit Page 5

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