New South Carolina Tax Credit to Incentivize Expanding Trail System

calendar iconJune 18, 2024

Contributor: Nick Cousino, Senior Manager

A new South Carolina tax credit that encourages private parties to expand the state’s ever-growing trail system went into effect May 13. South Carolina taxpayers who encumber their property with a perpetual recreational trail easement and right-of-way are allowed a one-time income tax credit equal to ten cents for each square foot of the property that is encumbered by the recreational trail easement. To qualify for the credit:

  • The easement and right of way must be held by a municipality, county or special purpose district within the state or by a Land Trust Alliance-accredited land trust and must be recorded with the appropriate Register of Deeds.
  • The easement must include an agreement with the municipality, county or land trust to grant access to the general public and address improvements to the trail, which could include pavement or soft-surface trails and maintenance.
  • The trail must provide a connection between a trail within a municipality, county, or special purpose district’s regional trail system plan in South Carolina, as well as a local or regional attraction or point of interest.

User groups may include equestrians, pedestrians, bicyclists and other non-motorized users. Local or regional points of interest include other trails, parks, waterways, or other recreational and open space attractions, retail centers, arts and cultural facilities, transportation facilities, residential concentrations or similar destinations.

A taxpayer allowing for a six-foot wide trail for two miles may be eligible to claim an income tax credit of $6,336. The credit is nonrefundable and unused tax credit may be carried forward five years. The total credit for all taxpayers is capped at $1 million annually.

The new credit is set to expire on January 1, 2029. Therefore, South Carolina taxpayers who may qualify for the  trails credit should plan to take advantage of the credit from tax years 2024 through 2028.

Your Guide Forward

With the ever-changing credit and incentive landscape, Cherry Bekaert’s Real Estate & Construction group stands ready to customize a strategic plan tailored to meet your real estate goals and objectives. By combining deep industry experience and technical knowledge of key tax, accounting, transaction structuring and compliance issues, we are uniquely positioned to provide the practical guidance and tools you need to make the right investment decision for your business.

Reference: S.C. Code § 12-6-3810

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