South Carolina manufacturers are required to file an annual property tax return, Form PT-300, Property Return. The PT-300 must be filed with the South Carolina Department of Revenue (“Department” or “DOR”) by the last day of the fourth month following the close of a taxpayer’s accounting year (no extension is available). For example, calendar year taxpayers must file Form PT-300 by April 30th.
The Form PT-300 reports all property owned as of the close of the taxpayer’s accounting year. There are ten different schedules that may need to be filed with the PT-300. The schedules report property subject to regular property tax, property subject to a fee-in-lieu of tax (FILOT), leased property, exempt pollution control equipment, and licensed vehicles. For example, manufacturing property subject to a FILOT should be reported on Schedule S, while property subject to regular ad valorem tax should be reported on Schedule A. A taxpayer may also need to attach explanatory schedules to the PT-300 to report, for example, replacement property.
Beginning in the 2017 tax year, taxpayers subject to a FILOT will also be required to file a new PT-300G, Schedule G, Fee in Lieu of Tax Supplemental, with county auditors. The new schedule is designed to provide counties with the information they need to comply with new standards issued by Government Accounting Standards Board (GASB), particularly Statement No. 77.
When a PT-300 is filed the Department will process the return and issue a Form PT-310, Property Assessment Notice. A taxpayer then has 90 days to protest the proposed assessment. If no protest is filed, the Department will issue a certification to the county where the property is located and the county will issue a bill to the taxpayer. The due date for payment is January 15th.
If a protest is filed in response to a Form PT-310 and the matter cannot be resolved before the end of the year (which is typical), DOR will, by default, issue 80% certifications to the county (i.e. bills based on 80% of the proposed assessment amount). A taxpayer can request that DOR issue a certification for an amount between 80%-100% of the proposed assessment if desired. DOR will consider the protest at the administrative level. If no agreement is reached at the administrative level, DOR will issue a department determination and the taxpayer may appeal to the South Carolina Administrative Law Court.
Calendar Year Example: Boeing is a calendar year taxpayer located in Charleston County, South Carolina. Boeing files a Form PT-300 on or before April 30, 2016, reporting the property it owned as of December 31, 2015. In August 2016 the Department mails Boeing a Form PT-310, Property Assessment Notice. Boeing does not protest the proposed assessment. In October 2016 Charleston County sends Boeing its tax bill for the 2016 tax year (imposed on the property Boeing owned on December 31, 2015). Payment for the 2016 tax bill is due on January 15, 2017.
Fiscal Year Example: Boeing uses a fiscal year ending June 30th. Boeing files a PT-300 on or before October 31, 2015, reporting the property it owned as of June 30, 2015. In August 2016 the Department mails Boeing a Form PT-310. Boeing does not protest the proposed assessment. In October 2016 Charleston County sends Boeing its tax bill for the 2016 tax year (imposed on the property Boeing owned on June 30, 2015). Payment for the 2016 tax bill is due on January 15, 2017.
Protest Example: Volvo is a calendar year taxpayer located in Berkeley County, South Carolina. Volvo files a Form PT-300 on or before April 30, 2016, reporting the property it owned as of December 31, 2015. In August 2016 the Department mails Boeing a Form PT-310, Property Assessment Notice. Volvo protests the proposed assessment in September 2016. The matter is not expected to be resolved before the payment date for the 2016 tax year. DOR issues an 80% certification to Berkeley County in October 2016. In October 2016 Berkeley County sends Volvo a tax bill for the 2016 tax year based on 80% of the proposed assessment (imposed on the property Volvo owned on December 31, 2015). Payment for the 2016 tax bill is due on January 15, 2017. Volvo and DOR resolve the property tax issues in dispute in April 2017. DOR notifies Berkeley County of the resolution and, depending on the terms of the resolution, an additional tax bill or refund will be sent to Volvo.
Many manufacturers may not realize the importance of the PT-300 and the consequences of filing an incorrect or incomplete return. The return is complex, and becomes even more complex when coupled with a FILOT agreement, financing leases, and replacement property. For example, failing to properly claim a property tax exemption for pollution control equipment on the PT-300 can constitute a waiver of the tax exemption that cannot be corrected after the property tax payment due date. Businesses should consult with a competent property tax advisor to make sure they are completing the form correctly or they could overpay their true property tax liability. Businesses also need to carefully review the Form PT-310 issued by DOR to make sure it matches what they reported on their PT-300, and monitor protest deadlines so that any errors or issues can be corrected or addressed.