Understanding the complexities of South Carolina tax law is essential for developers and property owners looking to maximize their incentives. In December 2024, the South Carolina Department of Revenue issued Revenue Ruling #24-6, which provides updates on fees, compliance, and documentation for historic credits, ensuring a clear path forward for those engaged in rehabilitation projects. The Sherbert Group remains at the forefront of these updates, guiding clients through the evolving regulatory landscape.
A few years ago, the SC legislature amended the state historic statute to provide for revised fees based on a percentage of expenses; the fees are very high compared to what is typically seen for state historic programs. However, each year the legislature has suspended implementation of the fee via proviso. RR 24-6 acknowledges these annual suspensions and points out that the fees may apply if the legislature does not act by June 30, 2025. Developers intending to submit the Part 3 application in 2025 may want to consider the possibility of submitting by 6/30 in order to avoid higher fees if the legislature does not act.
The revenue ruling also reaffirms which state credits may be combined. Provided the project qualifies, the SC historic credit may be claimed in conjunction with the SC textile credit, the SC abandoned building credit, or the SC housing credit. The state credits that cannot be combined are the SC textile credit, the SC abandoned building credit, and the SC retail facilities credit (now essentially defunct).
Finally, the ruling touches on documentation. Federal Form 3468 and SHPO/NPS approvals need to be submitted if a paper return is filed, but not with an electronic filing. And taxpayers should maintain invoices/receipts supporting QREs, but these do not need to be submitted unless requested by SCDOR under audit or review.
And as always, please reach out to The Sherbert Group if you have related questions on your historic rehabilitation. Our specialized expertise and extensive experience with key agencies makes it easier for you to secure the tax benefits available to your project.
