Late last month, two companies announced they were opening corporate headquarters in Greenville.
The companies – CertusBank, a recently formed banking firm that took over several failed banks in South Carolina and Georgia; and Perceptis, a 7-year-old business that provides technical and other support services to colleges and universities – could be exempt from corporate income taxes for 10 years under an S.C. House bill aimed in part at luring corporate headquarters to the Palmetto State, a review by The Nerve found.
When The Nerve first reported about the bill (H. 3720) in March, Rep. Phyllis Henderson, R-Greenville and one of the bill’s two co-sponsors, said she didn’t know if the legislation was drafted with any particular company in mind.
Contacted last week, Henderson, who was first elected to the House last year, said she wasn’t informed that the CertusBank and Perceptis headquarters were coming to Greenville when the bill was introduced on Feb. 22. She also said she didn’t know whether either company would qualify for the tax break under the bill.
“I really haven’t talked to (the S.C. Department of) Commerce about whether they would qualify,” said Henderson, a former board member of the Greenville Area Development Corporation and former Greenville County Council chairwoman.
Henderson earlier told The Nerve that she believed the proposed incentives are necessary to help attract national headquarters and high-tech firms to South Carolina.
The bill unanimously passed second reading in the House on April 28 but didn’t move out of the Senate Finance Committee. Still, it would be halfway to passage when the General Assembly reconvenes in January.
The main sponsor of H. 3720, Rep. Dan Cooper, R-Anderson and chairman of the budget-writing House Ways and Means Committee, did not respond to written and phone messages last week from The Nerve.
In a joint written announcement on May 26 with Gov. Nikki Haley, the Department of Commerce said the S.C. Coordinating Council for Economic Development, made up the heads of economic development agencies including Commerce, had approved job development credits for CertusBank. Those credits rebate a portion of new employees’ withholding taxes paid by a company.
The release did not mention whether the bank would receive any other taxpayer-supported incentives. Commerce Secretary Bobby Hitt and agency spokeswoman Kara Borie did not respond to written questions last week from The Nerve.
Representatives from CertusBank and Perceptis did not return phone messages last week from The Nerve.
Cooper’s bill was drafted by the South Carolina Economic Developers’ Association, Henderson earlier told The Nerve. The association is a not-for-profit professional organization that, according to its website (www.sceda.org), aims at the “influencing of critical economic development policy leading to sustainable statewide prosperity.”
Besides the corporate headquarters income tax exemption, the bill also would provide job tax credits or state sales tax exemptions to certain computer-related and “qualifying service-related businesses.”
A number of companies have corporate headquarters in South Carolina, including Michelin Tire North America, Sunoco packaging, Denny’s Restaurants, Advance America Cash-Advance, SCANA Corp. and Blackbaud, which provides software and other support services to nonprofit organizations.
Under Cooper’s bill, the 10-year corporate income tax exemption would apply to any company establishing or expanding a “national corporate headquarters” in South Carolina and creating at least 50 full-time jobs “performing corporate headquarters-related functions and services.”
CertusBank plans to create 350 jobs in a nine-story, mixed-use building in downtown Greenville that is expected to be completed by the end of next year, according to the joint release by Haley and Commerce. Perceptis intends to add 160 employees by the middle of 2012 to its 40-employee downtown Greenville call center that opened in April, with as many as 350 workers in place in about 2.5 years, CEO Bill Bradfield said at last month’s ribbon-cutting ceremony for the new headquarters, according to a Greenville News article
State law already allows for tax credits for companies establishing or expanding national headquarters in South Carolina. Cooper’s bill would allow a qualifying company to take the income tax exemption or existing credits, but not both.
The existing credit is equal to 20 percent of qualifying real property costs, which must be at least $50,000. At least 40 new full-time jobs must be created to qualify for the credit.
Under current law, qualifying corporations can claim additional credits equal to 20 percent of certain personal property costs, provided they create at least 75 full-time jobs.
But unlike the 10-year exemption period under Cooper’s bill, the existing tax credit generally is good only for the taxable year when a constructed headquarters is “placed in service for federal income tax purposes,” according to state law, though any unused part of the credit typically can be carried forward for 10 years. For leased real property, the credit is limited to the taxable year in which the “first direct lease costs are incurred.”
In fiscal year 2009, nearly $9.3 million in corporate headquarter tax credits was claimed, according to S.C. Department of Revenue records.
CertusBank was launched by Milton Jones of Atlanta, who headed Bank of America’s Georgia operations, according to a May story in the Atlanta Journal-Constitution. Jones and two other partners formed an investment fund to buy up failed banks last year; the first purchase was a failed, small bank in Easley, where CertusBank established its initial headquarters, the story said.
A company press release said it acquired the assets of the six-branch CommunitySouth Bank & Trust in Easley in January after negotiations with the Federal Deposit Insurance Corporation.
On May 20 – six days before the announcement that it was locating its headquarters in Greenville – CertusBank announced that it had “assumed all of the deposits and substantially all of the assets” of two other failed Georgia banks, according to a company release.
With the acquisitions, CertusBank added 25 locations in Georgia and one in Florida, with assets totaling $1.8 billion, according to the release.
Founded in 2004, Perceptis established its initial headquarters and a call center in Cleveland, and has another call center in Phoenix, according to the company’s website (www.perceptis.com). The company assists college and university students, faculty and staff with questions about email, admissions, network connections and other technical issues, payroll, financial aid and other areas, according to the website.
Since its founding, Perceptis has provided services to “more than 100 institutions and 1.5 million end users nationwide,” according to a company press release.
Reach Brundrett at (803) 254-4411 or rick@thenerve.org.