Submitted by the South Carolina Department of Revenue
More than 240,000 employees work in the state’s agribusiness industry, which includes 25,000 farms as well as food producers and timber-related firms.
If your business clients are part of South Carolina’s $46 billion agribusiness industry, the South Carolina Department of Revenue (SCDOR) offers reminders and tips to help your agribusiness clients.
Review tax credits with your clients that may be available to them.
- Agribusiness Income Tax Credit: Agribusiness operations or agricultural packaging operations that increase their purchases of South Carolina-grown farm products by 15% or more in a calendar year qualify for this credit, which cannot exceed $100,000. This nonrefundable credit must be certified by the Coordinating Council for Economic Development and may apply to Income Tax or Withholding Tax. The credit can carry forward five years for Income Tax and 20 quarters for Withholding Tax.
- Anhydrous Ammonia Credit: If you use anhydrous ammonia for agricultural purposes, you may qualify for this refundable credit. The credit equals the amount paid to buy the additive for the ammonia required by state law.
- Drip/Trickle Irrigation Systems Credit: You are eligible for this credit if you buy and install conservation tillage equipment, a drip/trickle irrigation system, or dual-purpose combination truck and crane equipment. This nonrefundable credit is limited to 25% of expenses and cannot exceed $2,500 in each of the three categories. Credits can carry forward for five years.
- Milk Credit: You can qualify for this credit if you produce milk for sale. The refundable credit is equal to $10,000 for the first 500,000 pounds of milk produced and sold below the production price and $5,000 for each additional 500,000 pounds produced and sold the same way. The credit amount must be certified by the South Carolina Commissioner of Agriculture.
- Water Resources Credit: If you build water storage and control structures, you may be eligible for this credit, which equals 25% of expenses and cannot exceed $2,500. The nonrefundable credit can be carried forward five years.
Learn more about these credits, including how to claim them, on the SCDOR’s website at dor.sc.gov/taxcredits.
Check Sales Tax exemptions available to the agricultural industry.
Several products are exempt from Sales Tax when purchased by an agricultural-related business, including:
- The sale of farm machinery that is used in planting, cultivating or harvesting farm crops for sale. The exemption also applies to replacement parts and attachments.
- Various machines used in the production of poultry and poultry products. The exemption does not apply to cars or trucks, pitchforks, hoes or other farm implements, or in machinery used in the construction of fences and buildings.
- The sale of livestock or mammals raised for their pelts or furs.
Check the SCDOR’s website for more agricultural products exempt from Sales Tax.
Remind your clients about SCATE cards when making an exempt purchase.
Paper forms are no longer valid for South Carolina Agricultural Tax Exemptions (SCATE) as of July 1. Agribusinesses are to use their SCATE card issued by the South Carolina Department of Agriculture when purchasing products used for agricultural production to receive the Sales Tax exemptions. Review this news release from the SCDOR and the SC Department of Agriculture for more information.
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