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On June 7, 2012, a sales and use tax exemption was enacted for original or replacement computers, computer equipment, computer hardware and software purchases, and electricity and business property used at a data center. A "data center" is defined as a new or existing facility at a single South Carolina location (1) that provides infrastructure for hosting or data processing services; (2) where the following conditions are met: (a) a taxpayer invests at least $50 million in real or personal property or both over five years, or (b) one or more taxpayers invests a minimum aggregate capital investment of at least $75 million in real or personal property or both over five years; (3) that is certified by the Department of Commerce; (4) where a taxpayer creates at least 25 full-time jobs with an average cash compensation level of 150% of the per capita income of the state or of the county in which the facility is located, whichever is lower; and (5) where the jobs are maintained for three consecutive years after the facility is certified.


If a taxpayer fails to meet the capital investment and job creation requirements a the end of the five year period, the Department of Revenue may assess any state or local sales or use tax due on items purchased. Also, if a taxpayer meets these requirements but subsequently fails to maintain the number of full time jobs at the required compensation levels, the exemption for computer equipment, computer hardware, and software purchases will be suspended until the jobs requirements are met. The electricity exemption will be limited to a percentage of the sales price, calculated by dividing the number of qualifying jobs by twenty-five.


The exemption is only available to data centers certified prior to January 1, 2032.


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