Fee-in-Lieu of property taxes (FILOT)
South Carolina’s Fee-in-Lieu of Property Taxes (FILOT) program allows companies making substantial capital investments to negotiate reduced property tax obligations with a county.
Through a FILOT agreement, a company may secure a lower assessment ratio and stabilize millage rates for up to 30 years. Actual savings depend on the level of investment and negotiated assessment and millage rates.
Minimum investment requirement
A county may negotiate a FILOT agreement when a company commits to a total capital investment of at least $2.5 million.
Key timing provisions include:
- The company has five years to meet the minimum investment threshold.
- The county may grant an additional five-year extension to complete the project.
Both real and personal property may be included under a FILOT agreement. Property that has previously been on South Carolina tax rolls, including existing buildings, is not eligible for the FILOT. This restriction is waived for companies making an additional $45 million or more in new investment.
Assessment and millage benefits
A FILOT agreement may provide substantial savings through:
Reduced assessment ratio
Payments to local government may be reduced through a lower negotiated assessment ratio, which may be reduced from 10.5% to as low as 6%.
Stabilized millage rate
A company may negotiate:
- A locked-in millage rate for up to 30 years; or
- A five-year adjustable millage rate for property subject to the FILOT.
Under a FILOT agreement:
- Personal property depreciates over time.
- Real property is generally fixed at its original cost for the life of the agreement.
Alternatively, the county and the company may agree that real property will be reported at fair market value as determined by appraisal by the Department of Revenue and reappraised every five years.
Replacement property
Property that replaces property previously subject to a FILOT agreement may be included under the agreement. Replacement property may be added up to the original income tax basis of the property it replaces at any time during the agreement term.
Super FILOT for large investments
Additional benefits may be available for projects involving substantial capital investment. If a company invests more than $400 million or invests more than $150 million and creates at least 125 net new jobs, a “Super Fee” may be negotiated.
Under a Super FILOT arrangement, the assessment rate may be reduced to as low as 4%.
Frequently asked questions
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