Technology Intensive Materials

Technology Intensive Materials “Technology intensive” companies locating or expanding in South Carolina may be exempt from some sales and use taxes when the new or expanding facility meets certain investment and job creation requirements. For a company to qualify for these exemptions, the expanding and/or new facility must: Qualify as a “technology intensive facility” which is defined as a facility at which a firm engages in the design, development and introduction of new products or innovative manufacturing processes, or both, through the systematic application of scientific and technical knowledge. It includes North American Industrial Classification Systems (“NAICS”) Manual codes 5114 (database and directory publishers), 5112 (software publishers), 54151 (computer systems design and related services), 541511 (custom computer programming services), 541512 (computer design services), 541711 (research and development in biotechnology), 541712 (research and development in physical, engineering and life sciences), 518210 (data processing, hosting and related services), 9271 (space research and technology), or a facility primarily used for one or more activities listed under the 2002 version of the NAICS codes 51811 (Internet Service Providers and Web Search Portals.); Invest at least $300 million in real or personal property at the facility over a five year period, 60% of which must be spent on computer equipment; and Create at least 100 new jobs within a five year period with an average wage that is at least 150% of the state per capita wage. The items that may be exempt from sales and use tax are: computer equipment, electricity used by the facility and equipment and raw materials. Once qualified for this exemption, all future computer equipment purchases are exempt.