By Molly Parker
mparker@scbiznews.com
Published Oct. 27, 2009

The Senate Finance Committee approved a package of tax incentives to lure big businesses, including a sales tax exemption on fuel used for test flights.

Though the Boeing Co. was not specifically named in the legislative meeting, the aerospace company was clearly the driving force behind the tax sweeteners. The threshold for a company to qualify is an investment of $750 million and a work force of at least 3,800 during the next seven years.

“I think we’re doing everything we can, from South Carolina’s perspective, to make that decision that they (Boeing) are going to have to make an easy decision,” said S.C. Chamber of Commerce President Otis Rawl.

Boeing CEO Jim McNerney said recently that he expects the company to make a decision very soon about whether to locate the second Dreamliner assembly line in Everett, Wash., or North Charleston. Boeing’s board of directors met on Monday, but no decision was announced. The company is reportedly continuing negotiations with the International Association of Machinists and Aerospace Workers in Washington, attempting to hammer out a no-strike deal with the union in exchange for the second line.

A stalemate would be to Charleston’s benefit.

The measure, which now moves to the full Senate, would provide the following incentives for qualified companies, according to the Chamber’s interpretation:

· A sales tax exemption for fuel used in flight tests for airplanes and in the transportation of airplane products and raw materials in and out of the state.

· A sales tax exemption on building materials.

· An automatic qualification for a single-factor sales formula for the purposes of figuring corporate income tax. This is beneficial for companies whose income is mostly derived from sales outside of the state. The option already exists, but the bill would streamline the process to file the appropriate allocation and apportionment formula.

· The ability to tap into $170 million worth of government revenue bonds to finance a facility. This is important because favorable rates may be tough to come by right now on the open market. The bonds would be paid down with property taxes.

“This really sends the message to the rest of the United States, and really globally, that South Carolina is open for business,” Rawl said.

The General Assembly has been called to Columbia this week for a special session to fix a glitch that could otherwise leave thousands of unemployed residents without access to extended federal unemployment benefits.

The Employment Security Commission did not alert the General Assembly that federal unemployment funds were in jeopardy as a result of lawmakers’ failure to tie the benefits to the unemployment rate — instead of the number of jobless.

“The General Assembly will take quick action to fix this oversight by the ESC to ensure that unemployed South Carolinians will not suffer further by being denied this federal benefit,” House Speaker Bobby Harrell and Senate President Pro Tem Glenn McConnell said in a joint statement issued earlier about the session.

The session, which officially started at noon, is expected to last a few days. Lawmakers are making use of the time to tackle other issues as well.

Along with the Boeing incentives, lawmakers may also seek to impeach Gov. Mark Sanford, who went missing for several days this year on a trip to visit his Argentine mistress. Since that happened, Sanford has been under fire for his use of state funds for air travel and for misleading his staff and the public regarding his whereabouts.

A group of lawmakers signed a petition asking for Sanford to resign, but he has refused saying he would await the findings of a S.C. Ethics Commission report.

Lawmakers will receive no additional pay for these session days.

Mike Fitts contributed to this report. Reach Molly Parker at 843-849-3144.