Is the U.S. textile industry making a comeback in the Carolinas? It depends who you ask.
On the one hand, nearly 6,000 manufacturing jobs were added in North Carolina in the year ended January 2016, marking the fourth consecutive year of growth. At the same time, Delta Apparel announced it would move its manufacturing operations in the town of Maiden to Honduras, wiping out 140 positions, and it’s been a year since 157 jobs were lost when Mohican Mills shut down.
In South Carolina, the situation has sparked the state’s decision to enhance the Textiles Communities Revitalization Act. An amendment cleared on May 23 means that a 50 percent cap applicable to the income tax credit provided by the Act has been removed, thereby increasing the value of the credit by fast-tracking the time period for claiming it. This applies to credits claimed for income tax year 2016.
According to legislation, the primary purpose of the Act is “to create an incentive for the rehabilitation, renovation and redevelopment of abandoned textile mills sites in South Carolina” in order to reestablish these places as productive assets for the communities they’re located in, resulting in increased job opportunities.
“Abandoned” means that at least 80 percent of the mill, whether used for textile manufacturing, dyeing or finishing, has been closed continuously to business or otherwise nonoperational as a mill for at least one year.
The act provides either a 25 percent credit against real property taxes or a 25 percent state income tax or corporate license fee, determined based on costs incurred to redevelop the site, like demolition, environmental remediation, construction and other improvements.
The amount of the credit is equal to 25 percent of the actual rehabilitation expenses made at the textile mill site times the local taxing entities. However, any costs incurred in rehabilitating the site that exceed 125 percent of the estimated expenses are disregarded when determining the credit, and no credit is given if the costs end up being less than 80 percent of the estimate.
The legislation stipulates that the ordinance must provide for the credit to be taken as a credit against up to 75 percent of the real property taxes due on the textile mill site each year for up to eight years. No other cap on property tax credit will apply.