Maximizing Savings and Growth: How Manufacturers Can Benefit from South Carolina’s FILOT Program

For manufacturers seeking a competitive advantage in site selection and expansion, South Carolina offers a compelling incentive: the Fee-in-Lieu-of-Tax (FILOT) program. Designed to reduce property tax burdens, FILOT provides significant cost savings for qualifying businesses, making South Carolina an attractive destination for new investments. Understanding how to leverage this program effectively can enhance a company’s financial outlook and long-term success. 

Understanding the FILOT Program

South Carolina’s FILOT program allows eligible manufacturers and other capital-intensive businesses to negotiate a lower assessment ratio and lock in their millage rate for up to 30 years. This replaces the traditional property tax structure, which typically applies a 10.5% assessment ratio to manufacturing properties. Under FILOT, manufacturers can reduce this to as low as 6%, resulting in substantial tax savings.

 Key Benefits for Manufacturers

1. Lower Property Tax Liabilities – By reducing the assessment ratio and stabilizing the millage rate, manufacturers can lower their overall tax burden, freeing up capital for reinvestment.
2. Long-Term Cost Predictability – The ability to fix the millage rate for decades provides financial stability, allowing businesses to plan with confidence.
3. Incentives for Large-Scale Investments – The program is particularly advantageous for manufacturers making significant capital investments, as it enhances return on investment by reducing long-term tax costs.

Eligibility and Requirements

To qualify for FILOT, manufacturers must meet specific criteria:

• A minimum capital investment, typically $2.5 million within a five-year period.
• Approval from the local county council, as FILOT agreements are negotiated at the county level.
• Commitment to maintaining the investment and job creation commitments outlined in the agreement.

In some cases, manufacturers investing $400 million or more may qualify for the Super FILOT, which offers even lower assessment ratios and extended benefits.

How Manufacturers Can Maximize FILOT Benefits

1. Engage Early with Local Officials – Since FILOT agreements require county approval, early discussions with economic development representatives and local government leaders can help streamline the process.
2. Bundle with Other Incentives – FILOT can be combined with additional state and local incentives, such as job tax credits, infrastructure grants, and sales tax exemptions, to maximize savings.
3. Work with Site Selection Experts – Navigating FILOT negotiations and structuring agreements effectively can be complex. Partnering with experienced advisors, like Five Points Strategic Advisors, ensures manufacturers secure the most favorable terms.

How Five Points Strategic Advisors Can Help

At Five Points Strategic Advisors, we specialize in helping manufacturers navigate the complexities of the FILOT program. Our team provides expert guidance in:

• Assessing Eligibility – We evaluate whether a manufacturer’s planned investment qualifies for FILOT and other incentives.
• Negotiating Favorable Terms – Our experts work directly with county officials and economic development agencies to structure the most advantageous agreement.
• Maximizing Incentive Stacking – We identify opportunities to combine FILOT with other state and local incentives, optimizing cost savings.
• Ensuring Compliance – We assist businesses in meeting FILOT requirements, helping them maintain eligibility and avoid potential pitfalls.

By leveraging our expertise, manufacturers can secure the best possible FILOT terms, reduce costs, and position themselves for long-term success in South Carolina.

Conclusion

For manufacturers considering South Carolina for a new facility or expansion, the FILOT program is a powerful tool to enhance profitability and long-term growth. By reducing property tax obligations, stabilizing costs, and encouraging large-scale investments, FILOT makes South Carolina a premier destination for industrial growth. Working with expert advisors like Five Points Strategic Advisors ensures businesses unlock the full potential of this program, positioning themselves for sustainable success in the Palmetto State.