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South Carolina

South Carolina

Incentives/Policies for Renewables & Efficiency

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Biomass Energy Tax Credit (Corporate)   

Last DSIRE Review: 08/12/2014
Program Overview:
State: South Carolina
Incentive Type: Corporate Tax Credit
Eligible Renewable/Other Technologies: Landfill Gas, Biomass, CHP/Cogeneration, Anaerobic Digestion
Applicable Sectors: Industrial
Amount:25% of eligible costs
Maximum Incentive:$650,000 per year; credit may not exceed 50% of tax liability
Carryover Provisions:Excess credit may be carried forward for 15 years
Start Date:1/1/2007
Authority 1:
Date Enacted:
Date Effective:
S.C. Code ยง 12-6-3620
06/22/2006
01/01/2007
Summary:

In 2007 South Carolina enacted the Energy Freedom and Rural Development Act (S.B. 243), which amended previous legislation concerning a landfill methane tax credit. The original legislation, enacted in 2006, allows a 25% corporate tax credit for costs incurred by a taxpayer for the use of landfill methane gas to provide power for a manufacturing facility. The 2007 amendments allow taxpayers a credit against the income tax and/or license fees for 25% of the purchasing and installation cost of equipment used to create heat, power, steam, electricity, or another form of energy. Fuels used by the equipment must be for commercial use and consist of at least 90% biomass resources.

In 2011, the South Carolina Department of Revenue issued a private ruling that the tax credit could be applied to an individual's income taxes. Specifically, a limited liability company (LLC) utilizing the biomass tax credit is allowed to pass through the credit to the shareholders of an S Corporation owning 60% of the parent LLC, provided there are at least four shareholders and all are residents of South Carolina. Costs incurred by a taxpayer must be certified by the State Energy Office, in consultation with the South Carolina Department of Agriculture and the South Carolina Institute for Energy Studies, in order to qualify for the credit.

The tax credit for all expenditures is limited to $650,000 per taxpayer year and may not exceed 50% of a taxpayer's liability for that year. Unused credits may be carried forward for 15 years. For a fiscal year, all claims may not exceed $650,000 and must apply proportionately to all eligible claimants. To obtain the maximum amount of credit available, the taxpayer must submit a request for credit to the State Energy Office by January 31st for all qualifying equipment placed in service in the previous calendar year. The State Energy Office must notify the taxpayer that it qualifies for the credit and the amount of credit allocated to the taxpayer by March 1st of that year.

For purposes of this credit, a biomass resource means non-commercial wood, by-products of wood processing, demolition debris containing wood, agricultural waste, animal waste, sewage, landfill gas, and other organic materials, not including fossil fuels. "Commercial use" means a use intended for the purpose of generating a profit. A "manufacturing facility" means an establishment where tangible personal property is produced or assembled.


 
Contact:
  Public Information
South Carolina Energy Office
1200 Senate Street
408 Wade Hampton Building
Columbia, SC 29201
Phone: (803) 737-8030
Phone 2: (800) 851-8899
Fax: (803) 737-9846
Web Site: http://www.energy.sc.gov/
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Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.

While the DSIRE staff strives to provide the best information possible, the DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. make no representations or warranties, either express or implied, concerning the accuracy, completeness, reliability or suitability of the information. The DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. disclaim all liability of any kind arising out of your use or misuse of the information contained or referenced on DSIRE Web pages.

Copyright 2013 - 2014 North Carolina State University, under NREL Subcontract No. XEU-0-99515-01. Permission granted only for personal or educational use, or for use by or on behalf of the U.S. government. North Carolina State University prohibits the unauthorized display, reproduction, sale, and/or distribution of all or portions of the content of the Database of State Incentives for Renewables and Efficiency (DSIRE) without prior, written consent.