State Income Tax Credit for Fortification Measures
Omnibus Coastal Property Insurance Reform Act
The Omnibus Coastal Property Insurance Reform Act of 2007 provides certain income tax credits for the costs a homeowner incurs in making his home more resistant to losses due to hurricane damage.
Section 12-6-3660 provides an income tax credit for the costs incurred to retrofit a structure qualifying as the taxpayer’s legal residence to make it more resistant to loss due to hurricane, rising floodwater, or other catastrophic windstorm event. The tax credit for any taxable year is limited to 25% of the total costs incurred or $1,000, whichever is less.
Section 12-6-3665 allows an income tax credit of up to $1,500 for state sales or use taxes paid on purchases of tangible personal property used to fortify one’s legal residence.
Resource Document for Mitigation Techniques
Regulation 69-75 prescribes the standards which must be met to qualify for the income tax credits as detailed in the South Carolina Safe Home Resource Document for Mitigation Techniques. Fortification measures must be accomplished in accordance with the standards contained in the resource document, a complete copy of which is available below.
The resource document describes each of the qualifying fortification measures from the regulation in detail to assist the homeowner, contractor, and inspector in determining the correct products to be used and the procedures for completing each mitigation technique. The items used must have an ICC Evaluation Services Legacy Report or other appropriate test reports that are acceptable to the building officials after review for that location.
The fortification measures that qualify for the tax credit include roof covering construction include:
Secondary Water Resistance
All retrofitting measures have to comply with the current edition of the International Residential Code as adopted by the South Carolina Building Codes Council or an engineer’s or manufacturer’s requirements for the wind speed for the area in which the home is located.
Evidence to Claim a Credit
Regulation 69-75 also sets forth the evidence that a taxpayer must provide to the Department of Revenue to claim the credit. This includes a written certification report from a professional with experience in construction techniques with the appropriate receipts attached or an affidavit from the taxpayer certifying that the fortification measures have been implemented. Copies of the receipts must also accompany the taxpayer’s affidavit.
The final regulation became effective June 26, 2009 and is applicable to all taxable years beginning after December 31, 2006.
Tax Credit Questions?
The SCDOI, in consultation with the Department of Revenue, has published a list of frequently asked questions regarding the tax credits.
Please contact the South Carolina Department of Revenue with additional questions relating to the filing process for a taxpayer to receive the credit at 803-898-5709 and request information concerning form SC SCH. TC-43, Residential Retrofit Credit. You may also download a copy of TC-43 on the Department of Revenue’s website or by clicking here. Other questions may be referred to the SC Safe Home Program via email.