South Carolina Textile Communities Revitalization

Information Sheet

S.C. CODE OF LAWS (1976, as amended)
Sections 6-32-20 – 6-32-50
Signed into law May 11, 2004, with a repeal date of July 1, 2014

From early water-powered mills to large mills with their own self-contained villages, the manufacturing of textiles is an important chapter in the history of South Carolina. But technological and economic forces have put many of these facilities out of work, leaving communities today to struggle with the negative consequences of their abandonment. Putting these buildings back into productive use will benefit the communities and save a tangible part of our history.

This law provides financial incentives for the "renovation, improvements, and redevelopment of abandoned textile mill sites located in South Carolina". This information sheet is intended to highlight key provisions of the law, it is not tax advice. Taxpayers are urged to consult their tax advisor about how the law applies to their tax situation.

What properties are eligible?
Abandoned textile manufacturing and related facilities are defined in the law as "a site that is designed for use or has in fact been used as a textile manufacturing facility or uses ancillary to it and is located in South Carolina". "Abandoned" is defined as "at least eighty percent of the facilities of the eligible site has been continuously closed to business or otherwise nonoperational for a period of a least one year immediately preceding the time at which the determination is to be made."

What is the incentive?
The law offers two options:

• 25% credit against real property taxes, or
• 25% state income tax credit

Both credits are calculated on "rehabilitation expenses" which are "the expenses incurred in the rehabilitation of the eligible site, excluding the cost of acquiring the eligible site or the cost of personal property maintained at the eligible site."

Properties that qualify for the state historic tax credit can also take advantage of this incentive. (S.C. Code of Laws, Section 12-6-3535 allows a 10% state income tax credit for properties qualifying for the 20% federal income tax credit for the rehabilitation of historic income-producing properties.)

What is the process to qualify?
To receive the property tax credit, the law outlines a process by which the municipality and other local taxing entities must approve the incentive. Please see the steps outlined in the law (Section 6-32-40(B)).

The taxpayer elects which credit to use by providing written notification to the S.C. Department of Commerce prior to the date the property is placed in service. If the taxpayer does not do this, the taxpayer is considered to have elected to receive the state income credit. Contact Daniel Young, Director of Grants, S.C. Department of Commerce, 1201 Main Street, Suite 1600, Columbia, SC 29201, 803-737-0448.

The law does not require review of the project work. However, if a project is pursuing the 20% federal income tax credit for the rehabilitation of historic income-producing properties and the 10% state historic credit, the project must follow the review and approval process required for those credits. Please contact the State Historic Preservation Office (SHPO) at the S.C. Department of Archives and History for more information early in the planning process (803) 896-6174.

How are the credits used?
The law specifies time frames and limits on how each credit can be used.

• The property tax credit can be taken as a credit against up to 75% of the real property taxes due each year on the site and can be carried forward up to 8 years.
• The state income tax credit must be taken in equal installments over a 5 year period, beginning when the property is placed in service. Any unused portion of a credit installment may be carried forward for the succeeding five years.

The state income tax credit earned by a general partnership, limited partnership, limited liability company or other entity taxed as a partnership must be passed through to its partners, and may be allocated among any of its partners, including allocation of the entire credit to one partner, in a manner agreed upon by the partners.

The credit does not offset the 10% state historic credit.

Other incentives?
Other financial incentives may also be available depending on the property and use after rehabilitation.

Property tax incentives for rehabilitation projects. State law (Sections 4-9-195 and 5-21-140) allows local governments to provide special property tax assessments for substantially rehabilitated historic properties that meet certain requirements. The special assessment places a temporary ceiling on the assessed value of the building. Check with the local government(s) to determine if it has adopted this program.

Federal tax credit for low income housing. This income tax credit is for the acquisition, construction, or rehabilitation of low income housing. For more information contact State Housing Finance and Development Authority (803-734-2000, www.sha.state.sc.us) which allocates the low income housing credits in South Carolina.

10% federal rehabilitation tax credit. This credit is available for the rehabilitation of buildings built before 1936 that are not listed in the National Register of Historic Places. The 10% credit applies only to buildings rehabilitated for non-residential uses. No review of the work is required. More information is available at the National Park Service website www.cr.nps.gov/hps/tps/tax/index.htm

Community Development Block Grants These federal grants assist communities in providing decent housing, a suitable living environment, and expanded economic opportunities. Grants are awarded to units of local government to carry out a wide range of activities addressing housing and community development needs. For more information contact the S.C. Department of Commerce 803-734-1399, www.sccommerce.com/CDBG.html.

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Other textile manufacturing facilities and related facilities may also be eligible for the National Register of Historic Places. A 1937 guide listed 236 mills in 197 communities in operation in South Carolina. It is unknown how many of these are still standing and which ones might be eligible for the National Register. Please contact the SHPO for more information about National Register eligibility of a specific property at (803) 896-6179.

A survey of historic mills and mill villages in the state was conducted from 1983 to 1986. A summary report, "South Carolina Textile Mills and Villages: A Statewide Survey" by Michael Scardaville, along with reports on selected sites (see below) are in the permanent holdings at the SC Department of Archives and History.

Aiken County (Horse Creek Valley)
Graniteville, Bath, Clearwater, Langley, Vaucluse, and Warrenville
Chester County
Eureka Plant, Gayle Plant, and Springsteen Plant, Chester
Greenville County
Woodside Cotton Mill, Greenville
Greenwood County
Greenwood Plant and Matthews Plant, Greenwood
Ninety-Six Plant, Ninety-Six
Lancaster County
Kershaw Plant, Kershaw
Lancaster Plant, Lancaster
Laurens County
Joanna Plant, Joanna
Union County
Buffalo Mill, Buffalo
Union Mill, Union
York County
Fort Mill Plant No. 1 and White/Fort Mill Plant No. 2, Fort Mill

The Clover-Hampton Spinning Mills Historic District (Hampton Spinning Mills, Hawthorne Plant, Hampshire Plant, a couple of water towers, three stores, and mill houses) was determined eligible for listing in the National Register of Historic Places by the SHPO in a survey of York County in 1992. Please note that the properties may no longer be eligible due to physical alterations. Please contact the SHPO with current information about the property to confirm its continued eligibility for the National Register.