SC Department of Revenue Issues Revised Guidance on Abandoned Textile Mill Credits

The Act provides state income tax credits or property tax credits equal to 25% of the rehabilitation expenses incurred in connection with the redevelopment of an abandoned textile mill site. The revised ruling updates prior guidance relating to the ability of owners of contiguous parcels to earn credits under the Act. As revised, the ruling makes clear that SCDOR will allow credits to the owner of an eligible contiguous parcel provided that the owner renovates or demolishes all buildings on that parcel, even if the owner does not own the parcel, including the primary textile mill, and even if the primary textile mill is not renovated or developed. This ruling broadens the ability of contiguous parcel owners in certain cases to qualify for credits. Importantly, this ruling does not change the eligibility of contiguous parcels for credits. Contiguous parcels are only eligible for credits if they are “4(b) sites,” referring to Section 12-65-20(4)(b) of the South Carolina Code. In addition, the ruling does not change the limitation that rehabilitation expenses do not include expenses that increase the square footage of buildings on contiguous parcels immediately preceding the time at which the textile mill became abandoned by more than two hundred percent. Finally, if the owner of a contiguous parcel also owns the parcel on which the primary textile mill is located, the ruling does not change the requirement in that scenario that the primary textile mill must also be renovated or demolished.
 
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