South Carolina Incentives and Laws
Listed below are the summaries of all current South Carolina incentives, laws, regulations, funding opportunities, and other initiatives related to alternative fuels and vehicles, advanced technologies, or air quality. You can go directly to summaries of:
State Incentives
Biofuels Retail Incentive
Ethanol retailers selling fuel blends of at least 70% ethanol (E70) are eligible for a $0.05 incentive per gallon of ethanol blended fuel sold, provided that the fuel is subject to the South Carolina motor fuel user fee. Additionally, biodiesel retailers are eligible for a $0.25 incentive per gallon of biodiesel (B100) sold as pure biodiesel or as part of a biodiesel blend, provided that the blend contains at least 2% biodiesel (B2). These incentives apply only to fuel sold before July 1, 2012. Biodiesel is defined as a fuel for motor vehicle diesel engines comprised of vegetable oils or animal fats and meeting ASTM specifications D6751 or D975. (Reference South Carolina Code of Laws 12-63-20)
Biofuels Production Tax Credit
Qualified corn-based ethanol and soy-based biodiesel producers are eligible for an income tax credit of $0.20 per gallon of fuel produced through 2016. Producers using feedstocks other than corn or soy oil are eligible for $0.30 per gallon tax credit. An eligible production facility must be operating at a production rate of at least 25% of its name plate design capacity and must maintain that production rate for at least six months, before denaturing, on or before December 31, 2011. The credit is allowed for up to 60 months beginning with the first month for which the facility is eligible to receive the credit and ending before December 31, 2016. Beginning January 1, 2017, the credit changes to $0.075 per gallon of fuel produced. The credit may be carried forward for ten years. Additional restrictions apply. (Reference South Carolina Code of Laws 12-6-3600)
Battery Manufacturing Tax Incentives
For taxation purposes, the taxable fair market value of manufacturing machinery and equipment purchased for use at a renewable energy manufacturing facility may be reduced by 20% of the original cost. Qualified renewable energy manufacturing facilities include those manufacturing batteries for hybrid electric, fuel cell, or other motor vehicles certified by the South Carolina Energy Office. Qualified facilities must invest at least $100 million in the project and create at least 200 new full-time jobs with an average compensation level of 150% of the annual per capita income in South Carolina or the county where the facility is located, whichever is less. Qualified facilities may also claim job development tax credits for employee relocation expenses through July 1, 2014. Additional restrictions apply. (Reference South Carolina Code of Laws 12-6-3377, 12-10-30, 12-10-80, 12-15-20, 12-15-30, 12-37-930)
Biofuels Distribution Infrastructure Tax Credit
A taxpayer that purchases, constructs, or installs, and places into service a qualified commercial facility for distributing or dispensing of biofuels is eligible for an income tax credit of up to 25% of the purchase, construction, and installation costs. Eligible property includes pumps, storage tanks, and related equipment used exclusively for distribution, dispensing, and storing biofuels. A qualified facility must clearly label the equipment used to store or dispense the fuel as being associated with the biofuel. The credit must be taken in three equal annual installments beginning with the taxable year in which the facility is placed into service. Qualifying fuels include blends containing at least 70% ethanol (E70) dispensed at the retail level for use in motor vehicles, and pure ethanol or biodiesel fuel dispensed by a distributor or facility that blends these non-petroleum liquids with gasoline or diesel fuel for use in motor vehicles. (Reference South Carolina Code of Laws 12-6-3610)
Biofuels Production Facility Tax Credit
A taxpayer that constructs and places into service a commercial facility for the production of biofuel is eligible for a tax credit of up to 25% of the cost of constructing or renovating a building and equipping the facility. Production of biofuel includes intermediate steps such as milling, crushing, and handling feedstock and the distillation and manufacturing of the final product. The entire credit must be taken in seven equal annual installments beginning with the taxable year in which the facility is placed into service. Qualifying fuels include liquid non-petroleum based fuel that can be placed in motor vehicle fuel tanks and used to operate on-road vehicles, including all forms of fuel commonly or commercially known or sold as biodiesel and ethanol. (Reference South Carolina Code of Laws 12-6-3610)
Fuel Cell Vehicle Tax Credit
South Carolina residents that claim the federal fuel cell vehicle tax credit are eligible for a state income tax credit equal to 20% of the federal credit. If the amount of the state credit exceeds the taxpayer's liability for the applicable tax year, any unused portion of the credit may be carried forward and claimed for up to five additional years. (Reference South Carolina Code of Laws 12-6-3377)
Hydrogen Infrastructure Development Grants
The South Carolina Research Authority administers the South Carolina Hydrogen Infrastructure Development Fund, which provides funding for grants that promote the development and deployment of hydrogen production, storage, distribution, and dispensing infrastructure and related products and services that enable the growth of hydrogen and fuel cell technologies in the state. Taxpayers may receive a 25% credit against state income taxes, insurance premium taxes, and certain license fees for contributions made to the fund. (Reference South Carolina Code of Laws 11-46)
Hydrogen and Fuel Cell Tax Exemption
The following are exempt from state sales tax: 1) any device, equipment, or machinery operated by hydrogen or fuel cells; 2) any device, equipment, or machinery used to generate, produce, or distribute hydrogen and designated specifically for hydrogen or fuel cell applications; and 3) any device, equipment, or machinery used predominantly for manufacturing, or research and development involving hydrogen or fuel cell technologies. (Reference South Carolina Code of Laws 12-36-2120(71))
Idle Reduction Weight Exemption
Any motor vehicle or combination of vehicles equipped with idle reduction technology is allowed to exceed the maximum gross vehicle and axle weight limits by up to 400 pounds to compensate for the added weight of the idle reduction equipment. The vehicle operator must provide documentation that the vehicle is equipped with idle reduction equipment. (Reference South Carolina Code of Laws 56-5-4160)
Laws and Regulations
Biofuel Blending Capability Requirements and Regulations
Fuel retailers that offer gasoline or diesel that is not blended with ethanol or biodiesel must ensure that their fuel is suitable for subsequent blending with biofuels. Retailers must also ensure that gasoline contains additives typically found in a product pre-blended with ethanol. Retailers, however, are not liable for fines, penalties, injuries, or damages resulting from subsequent blending of fuel sold at their locations. Furthermore, no individual or entity can deny a distributor and retailer from blending biofuels for sale in South Carolina, as long as the individual or entity is registered with the U.S. Internal Revenue Service. (Reference South Carolina Code of Laws 39-41-235)
Hydrogen Fueling Infrastructure Permitting and Safety
Individuals or entities must submit an application and pay a $10 fee to the State Fire Marshall or a certified designee before renovating or constructing a facility to store or dispense hydrogen fuel. The State Fire Marshall must ensure that the state laws governing hydrogen fueling infrastructure are executed faithfully; require compliance with nationally recognized fire prevention and protection standards for hydrogen fueling infrastructure; develop training and certification requirements for county and municipal officials to grant permits for hydrogen fueling infrastructure; develop minimum requirements for the design, construction, location, installation, and operation of equipment for storing, handling, and dispensing hydrogen; and perform random inspections of licensed fueling infrastructure. When a codes and standards organization that is certified by the American National Standards Institute develops a standard procedure for training and certifying officials for permitting on hydrogen fueling infrastructure, the State Fire Marshall may adopt this procedure. (Reference South Carolina Code of Laws 23-9-20 and 23-9-510 through 23-9-570)
Idle Reduction Requirement
Vehicle operators may not idle any commercial diesel vehicle with a gross vehicle weight rating of more than 10,000 pounds for more than 10 minutes in any one-hour period. Exemptions apply for the following: traffic conditions; prevention of safety or health emergencies; emergency or law enforcement; maintenance, service, repair, or diagnostic purposes; state or federal inspections; power work-related operations; loading or unloading; sleeper berth temperature control during 1) rest or sleep periods, 2) times when the ambient outside air temperature is less than 40 degrees Fahrenheit or greater than 80 degrees Fahrenheit, or 3) at rest areas, terminals, truck stops, or legal parking locations greater than 500 feet from homes, schools, hospitals, or daycare facilities. Violators are subject to a $75 fine for each offense. (Reference South Carolina Code of Laws 56-35-10 to 56-35-40)
Biodiesel Blend Distribution Mandate
All state-owned diesel fueling facilities must provide fuel containing at least 5% biodiesel (B5) at all diesel pumps. (Reference South Carolina Code of Laws 12-63-30)
State Agency Preference for Alternative Fuel and Advanced Vehicles
State agencies purchasing motor vehicles must give preference to hybrid, plug-in hybrid electric, biodiesel, hydrogen, fuel cell, or flexible fuel vehicles when the performance, quality, and anticipated lifecycle costs are comparable to other available motor vehicles. (Reference South Carolina Code of Laws 1-11-310)
State Agency Alternative Fuel Use Requirement
Whenever practical and economically feasible, all state agencies operating alternative fuel vehicles must use alternative fuels in those vehicles. Private businesses are encouraged to increase the use of alternative fuels in the state. (Reference Executive Order 2001-35)
Biodiesel Use in School Buses
The South Carolina Department of Education must fuel state school bus fleets with biodiesel when feasible. (Reference South Carolina Code of Laws 59-67-585)
Alternative Fuel Tax
Alternative fuels and blended fuels are exempt from the state sales and use tax. These fuels are, however, subject to a state fuels user fee of $0.16 per gallon. Alternative fuels include liquefied petroleum gas (propane) and compressed natural gas. Blended fuels are defined as mixtures composed of gasoline or diesel fuel and another liquid, other than products such as carburetor detergent or oxidation inhibitor, that can be used as a fuel to operate a highway vehicle. (Reference South Carolina Code of Laws 12-28-110, 12-28-310, and 12-36-2120(15))
Propane Safety and Liability
An individual involved in installing liquefied petroleum gas (propane) systems or manufacturing, distributing, selling, storing, or transporting propane is immune from the civil liability associated with injury or damage associated with these activities, as long as the individual was exercising reasonable care and took steps to warn the end user of the misuses of the propane system. Any individual that alters or modifies propane equipment must notify the licensed propane dealer that will use the system of the repairs or modifications. The state propane board must ensure that the laws of South Carolina affecting propane are executed faithfully, institute proceedings for law violations relevant to propane, and declare and enforce regulations relating to propane and related equipment. (Reference South Carolina Code of Laws 15-3-690, 40-82, and 40-82-270)
Low-Speed Vehicle Access to Roadways
A low-speed vehicle is defined as a four-wheeled motor vehicle, other than an all terrain vehicle, that is capable of reaching speeds of at least 20 miles per hour (mph) but not greater than 25 mph, and meets the safety standards in Title 49, Code of Federal Regulations, section 571.500. A low-speed vehicle may operate only on secondary highways with a posted speed limit of up to 35 mph but may cross a highway with posted speed limits over 35 mph at an intersection. A low-speed vehicle must be registered and licensed in the same manner as a passenger vehicle and is subject to the same insurance requirements applicable to other motor vehicles. Homemade low-speed vehicles, retrofitted golf carts, or any other similar vehicles do not qualify as low-speed vehicles. (Reference South Carolina Code of Laws 56-1-10, 56-2-100 to 56-2-130, and 56-5-820)