South Carolina law lets landfill gas businesses claim a limited tax credit

The law allows a taxpayer to claim a credit for part of qualifying equipment costs. The credit covers equipment and facilities used only on a landfill facility's property to collect, process, and transport landfill gas into renewable natural gas for commercial use. It excludes offsite utility infrastructure, land, legal and administrative costs, and unrelated pipeline expansion. The State Energy Office must certify the costs and notify the taxpayer whether they qualify and how much credit is allocated. A taxpayer must request the credit by January 31 for equipment placed in service in the previous calendar year. The credit is nonrefundable. In one tax year, a taxpayer may use up to 25% of the credit or $5 million, whichever is less; unused credits earned before the end of 2030 may be carried forward for 15 years. A taxpayer may transfer the credit to another eligible person. A regulated utility that receives the credit must pass its value to ratepayers through its next rate proceeding or as the Public Service Commission directs. The credit applies to taxable years beginning after 2025 and ending before 2030. It may be claimed in the year the equipment is placed in service.

A taxpayer must repay a prorated part of the credit if a facility stops operating or producing commercially, or removes qualifying equipment from service. This applies to a facility that received credits under this section. The Department of Revenue determines the amount to be repaid. The five-year period starts when the equipment is placed in service.