The General Assembly finds that South Carolina is blessed with abundant rain fall and other water resources which when managed through the construction of impoundments and water control structures abate erosion and sedimentation, conserve water for use during times of drought and add to the income of our citizens by increasing agricultural and aquicultural productivity. An income tax credit is allowed to encourage the private sector of our economy to invest in the construction of water storage and control structures for soil and water conservation, wildlife management, agriculture and aquiculture purposes.
- This tax credit does NOT apply to any pond, lake, or other water impoundment or water control structure located in or adjacent to and filled primarily by coastal waters of the State.
- To qualify for this credit the taxpayer must obtain and attach a construction permit issued by the SC Department of Health and Environmental Control (SC DHEC) or proof of exemption from permit requirements issued by SC DHEC, the Natural Resources Conservation Service, or a local Soil and Water Conservation District.
- An income tax credit is allowed for twenty-five percent of all allowable expenditures, to a maximum of two thousand five hundred dollars made in each tax year, for the construction and installation or restoration of ponds, lakes and other water impoundments, and water control structures designed for the purposes of water storage for irrigation, water supply, sediment control, erosion control or aquaculture and wildlife management. If the credit exceeds the tax liability, the excess may be carried forward for credit against income taxes in the next five succeeding taxable years.
- "Restoration" of ponds, lakes and other water impoundments, and water control structures includes all materials and services for:
- Changing the height of a dam.
- Increasing the spillway capacity of a dam.
- Removing sediment from an impoundment.
- Adjusting the water depth to improve an impoundment for aquiculture or wildlife management.
- Removing trees greater than 4 inches in diameter from a dam, including removing stumps and replacing with impervious material.
- Installing a filter or drainage system to control seepage through a dam.
- Costs related to work requiring excavation into the embankment fill or foundation of a dam (e.g. replacing deteriorated pipe).
- Costs related to work requiring removal or replacement of major structural components of a dam (e.g. replacing deteriorated concrete, gates etc.).
- Any other work to improve the capacity, service or safety of a water impoundment or water control structure (some exceptions apply)
- In the case of pass-through entities such as partnerships and S Corp, the credit is determined at the entity level and is limited to $2,500.
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