South Carolina Introduces Income Tax Credit for Recreational Trail Easements

Effective May 13, 2024, South Carolina has introduced a one-time income tax credit for those who encumber their property with a perpetual recreational trail easement. The new law, codified in South Carolina Code Section 12-6-3810, aims to promote the development of trail systems connecting local and regional points of interest.

Key Provisions of the new law:

  • Property owners who grant a perpetual recreational trail easement on their land are eligible for a one-time income tax credit equal to ten cents per square foot of the encumbered property.
  • The easement must be held by a municipality, county, special purpose district, or a Land Trust Alliance accredited land trust and recorded with the applicable county Register of Deeds.
  • The trail must connect to a regional trail system plan and provide access to local or regional attractions or points of interest such as other trails, parks, waterways, or other recreational and open space attractions, retail centers, arts and cultural facilities, transportation facilities, residential concentrations, or similar destinations.
  • The easement must include agreement to grant public access and address improvements and maintenance of the trail, which may include paved or soft-surface trails.
  • User groups may include equestrians, pedestrians, bicyclists, and other non-motorized users.
  • If the credit exceeds the taxpayer’s tax liability for the year, the excess can be carried forward for the next five taxable years.
  • The total amount of tax credits available to all qualifying taxpayers is capped at one million dollars per calendar year.

The law is set to expire on January 1, 2029, and will no longer be effective for income tax years after 2028.

The new income tax credit is expected to enhance the state’s trail network and provide more opportunities for outdoor recreation, and in turn promote healthy lifestyles, boost tourism, and improve the overall quality of life for South Carolina residents and visitors alike.

Josh Lonon

Josh Lonon

Josh Lonon leads the Wyche, P.A. Commercial Real Estate Practice Group as chair, its Economic Development and Tax Incentives Group as co-chair, and the firm’s Spartanburg, South Carolina office. He regularly serves as lead counsel for national and regional companies, both public and private, local and statewide developers, and higher education institutions and other non-profits, in the acquisition, development, financing, sale, and leasing of commercial properties. Such properties are often industrial and manufacturing facilities and complexes and large multi-family, office, retail, and mixed used developments.

Josh also advises clients on, and regularly negotiates with and appears before municipal bodies to obtain, economic development tax incentives. These include fee-in-lieu of taxes arrangements, infrastructure tax credits, multi-county industrial and business park inclusions, tax abatements and rehabilitation tax credits for renovation of abandoned textile and historic properties. He also has experience with title insurance companies both as outside and inside counsel, giving him keen insight into solving complex title and title insurance issues.

Josh has served as Chair of the South Carolina Bar Real Estate Practices Section and as editor of the 2d edition of the South Carolina Commercial Real Estate Handbook. He is a former executive board member of the Upstate, South Carolina chapter of the Urban Land Institute and has chaired and held other leadership positions on several local government boards non-profits. He is a graduate of the South Carolina Bar Leadership Academy, Leadership Spartanburg, is a Regional Fellow of the Spartanburg Regional Healthcare System and has been included in the Pro Bono Honor Roll by the South Carolina Supreme Court for multiple years.

Josh is recognized by Chambers USA, Super Lawyers, Best Lawyers, SC Biz Magazine’s Real Estate Power List and Greenville Business Magazine’s Legal Elite of the Upstate, and is a recipient of the South Carolina Lawyers Weekly Leadership in Law Award.


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