Large project sales tax exemptions

Overview

In addition to standard sales tax exemptions for manufacturing machinery and equipment, South Carolina provides targeted exemptions for large projects that meet specific investment and operational criteria. These exemptions can apply to material-handling equipment, construction materials and other qualifying items when tied to large-scale facilities. 

Large project exemptions are designed to support economic development by lowering the cost of key equipment and materials for significant capital investments in the state.

Material-handling equipment exemption

Projects that invest $35 million or more in manufacturing or distribution operations may qualify for a sales tax exemption on material-handling equipment. This exemption applies to equipment used directly in material movement and handling within large manufacturing or distribution facilities, reducing the cost of building or expanding complex operational infrastructure. 

Construction materials exemption

South Carolina exempts sales tax on construction materials used in the construction of a single manufacturing or distribution facility that involves a capital investment of at least $100 million within an 18-month period.

This exemption helps large projects manage the cost of building facilities that will contribute substantially to job creation and economic growth in the state. 

Technology-intensive facility exemptions

Special exemptions are available for “technology-intensive” facilities that meet rigorous criteria, including investment size, job creation and industry classification.

To qualify, a project must:

• Qualify as a technology-intensive facility—meaning it engages in design, development and introduction of new products or innovative manufacturing processes; and
• Invest at least $300 million in real or personal property at a facility over a five-year period, at least 60% of which must be spent on computer equipment; and
• Create at least 100 new jobs over five years with average wages of at least 150% of the state’s per capita wage.

Qualifying technology-intensive facilities may receive exemptions on sales tax for:

• Computer equipment
• Electricity used by the facility
• Equipment and raw materials

Once approved, future purchases of qualifying equipment may remain exempt.