South Carolina Incentives and Laws

Last Updated August 2009

South Carolina is the home of the Palmetto State Clean Fuels Coalition (www.palmettocleanfuels.org). Coordinator contact information is listed in the Points of Contact section.

State Incentives

Biofuels Retail Incentive

Retailers of ethanol fuel blends of at least 70% (E70) are eligible for a $0.05 incentive payment for each gallon of E70 fuel sold, provided that the E70 fuel is subject to the South Carolina motor fuel tax. Additionally, biodiesel retailers are eligible for a $0.25 incentive payment for each gallon of pure biodiesel (B100) sold, provided that the resulting blends contain at least 2% biodiesel (B2). These incentives apply only to fuel sold before July 1, 2012. Biodiesel fuel 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)

Alternative Fuel and Advanced Vehicle Tax Credit

A state income tax credit equal to 20% of the federal fuel cell, advanced lean burn, hybrid electric vehicle, and alternative fuel vehicle credits is available to South Carolina resident taxpayers who are eligible for, and claim, the federal credits. If the amount of the 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 years. The state tax credit is calculated without regard to the phase out period limits of Internal Revenue Code Section 30(B)(f). (Reference South Carolina Code of Laws 12-6-3377)

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 for taxable years beginning after 2006 and before 2017. 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 month, 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 not later than December 31, 2016. Beginning January 1, 2017, the credit changes to $0.075 per gallon of fuel produced. (Reference South Carolina Code of Laws 12-6-3600)

Biofuels Research and Development Tax Credit

For taxable years beginning after 2007 and ending before 2012, an income tax credit is available for up to 25% of qualified research and development expenditures, which include developing feedstocks and production processes for cellulosic ethanol and algae-derived biodiesel. Cellulosic ethanol is defined as fuel from ligno-cellulosic materials, including wood chips, corn stover, and switchgrass. (Reference South Carolina Code of Laws 12-6-3631

Biofuels Distribution Infrastructure Tax Credit

A taxpayer that purchases or constructs, installs, and places into service a qualified commercial facility for distribution or dispensing of renewable fuels in South Carolina 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 renewable fuel. A qualified facility must clearly label the equipment used to store or dispense the fuel as being associated with the renewable fuel. The credit must be taken in three equal annual installments beginning with the taxable year in which the facility is placed into service. Renewable fuel is defined as fuel 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 fuel or diesel fuel for use in motor vehicles. (Reference South Carolina Code of Laws 12-63-3610)

Biofuels Production Facility Tax Credit

A taxpayer that constructs and places into service a commercial facility for the production of renewable fuel 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 renewable fuel 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 in service. Renewable fuel is defined as 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 12-63-3610)

Hydrogen Infrastructure Development Grants

The South Carolina Hydrogen Infrastructure Development Fund is created to fund grants administered by the South Carolina Research Authority to 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)

State Laws and Regulations

State Agency Biodiesel Blend Mandate

All state-owned diesel fueling facilities must provide fuel containing at least 5% biodiesel (B5) in all diesel pumps. (Reference South Carolina Code of Laws 12-63-30)

Idle Reduction Requirement

Idling of 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 is prohibited. Exemptions apply for the following: traffic conditions; prevention of safety or health emergencies; emergency or law enforcement purposes; maintenance, servicing, repairing, or diagnostic purposes; state or federal inspections; power work-related operations; while waiting to load or unload; sleeper berth temperature control during a) rest or sleep periods, b) times when the ambient outside air temperature is less than 40 degrees Fahrenheit or greater than 80 degrees Fahrenheit, or c) at rest areas, terminals, truck stops, or legal parking locations greater than 500 feet from homes or schools. Violators are subject to a $75 fine for each offense. (Reference South Carolina Code of Laws 56-35-10 to 56-35-40)

Idle Reduction Weight Exemption

The maximum gross vehicle and axle weight limits for any motor vehicle or combination of vehicles equipped with idle reduction technology may be increased by the weight of the idle reduction equipment, not to exceed 400 pounds. The vehicle operator must provide documentation that the vehicle is equipped with idle reduction equipment. (Reference South Carolina Code of Laws 56-5-4160)

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)

Biodiesel Use in School Buses

The South Carolina Department of Education is required to fuel state school bus fleets with biodiesel when feasible. (Reference South Carolina Code of Laws 59-67-585)

Low-Speed Vehicle Access to Roadways

A low-speed vehicle is defined as a four-wheeled motor vehicle, other than an all terrain vehicle, capable of reaching speeds of at least 20 miles per hour (mph) but not greater than 25 mph. A low-speed vehicle may operate only on secondary highways with a posted speed limit of up to 35 mph. 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)

State Agency Preference for Alternative Fuel and Advanced Vehicles

Preference in purchasing state motor vehicles must be given to hybrid, plug-in hybrid, biodiesel, hydrogen, fuel cell, or flexible fuel vehicles when the performance, quality, and anticipated life cycle 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 are required to 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)

Liquefied Petroleum Gas (LPG) Board

The state LPG Board has the authority to ensure that the laws of South Carolina affecting LPG are executed faithfully, institute proceedings for law violations relevant to LPG, and declare and enforcing regulations relating to LPG and LPG equipment. (Reference South Carolina Code of Laws 40-82)

Alternative Fuel Tax

All fuels, including alternative fuels and alternative fuel blends, are exempt from the state sales and use tax. However, all fuels are subject to a state fuels user fee of $0.16 per gallon. Alternative fuels include butane, liquefied petroleum gas, 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, which 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)

Utilities/Private Incentives

There are currently no known utility or private incentives offered in South Carolina.

Points of Contact:

NAME/EMAIL/TITLE	AGENCY	PHONE/FAX
Erica H. Myers Clean Cities Co-Coordinator	Palmetto State Clean Fuels Coalition	Phone:(803) 737-7951 Fax:(803) 737-9846
Amy Lawrence Clean Cities Co-Coordinator	Palmetto State Clean Fuels Coalition	Phone:(803) 737-8032 Fax:(803) 737-9846
Steven Richardson Project Manager	U.S. Department of Energy, National Energy Technology Laboratory	Phone:(304) 285-4185 Fax:(304) 285-4777
Dale Aspy Environmental Engineer, Region 4	U.S. Environmental Protection Agency	Phone:(404) 562-9041 Fax:(404) 562-9019