South Carolina Research and Development Tax Credit Summary

The South Carolina R&D Tax Credit provides a tax credit for increasing qualifying research activities. South Carolina leverages off of Internal Revenue Code Section 41 regarding qualified expenditures, but calculates the credit based solely on expenditures incurred in South Carolina.

  • Applicable South Carolina code section is S.C. Code Section 12-6-3415.
  • Research must be conducted within the state of South Carolina.
  • The South Carolina R&D Tax Credit is 5% of the qualified research expenditures that occurred in South Carolina.
  • The R&D Tax Credit taken in any one taxable year cannot exceed 50% of a taxpayer's liability.
  • South Carolina allows a 10-year carry forward period for any unused R&D Tax Credit.

South Carolina R&D Tax Credit Case Study

A manufacturing company in Columbia creating specialized parts for the automotive industries took a credit for the past two years when it designed a highly specialized prototype. This project involved a multi-year study covering the tax years 2013 and 2014. The Company qualified for the federal R&D Tax Credits of $213,867 and an additional $116,263 in South Carolina state R&D Tax Credits.

  
FEDERAL
 
SOUTH CAROLINA
Year
Total QREs
Credit
Total QREs
Credit
2014
$1,357,500
$125,906
$1,357,500
$61,250
2013
1,100,250
87,961
1,100,250
55,013
      
Total$2,457,750$213,867$2,457,750$116,263