Operating an agribusiness in S.C.? Check to see if you qualify for these tax credits

Some South Carolina tax credits related to agribusinesses are nonrefundable, meaning they cannot reduce your tax liability below zero, while other credits are refundable. Each of the credits apply to specific circumstances. Review the facts in your situation to see if any of the credits detailed below apply.

Nonrefundable credits

• Drip/Trickle Irrigation Systems Credit: Taxpayers who buy and install conservation tillage equipment, a drip/trickle irrigation system, or dual purpose combination truck and crane equipment are eligible. Credits are limited to 25% of expenses and cannot exceed $2,500 in each of the three categories. Credits can carry forward for five years. Use form TC-1 to claim the credit.

• 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. The credits 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. To claim this credit, use form TC-61 for Income Tax or WH-1671 for Withholding Tax.

• Water Resources Credit: Taxpayers who build water storage and control structures are eligible for this credit, which equals 25% of expenses and cannot exceed $2,500. It can be carried forward five years. Use form TC-3 to claim the credit.

Refundable credits

• Anhydrous Ammonia Credit: Taxpayers who use anhydrous ammonia for agricultural purposes qualify. The credit equals the amount paid to buy the additive for the ammonia required by state law. Use form I-333 to claim the credit.

• Milk Credit: Taxpayers who produce milk for sale qualify. The 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. Use form I-334 to claim the credit.

Find more tips and filing information on the SCDOR’s website at dor.sc.gov.