Teamwork and legislation helps bring new Boeing facility to state

In our recent special session, the S.C. General Assembly adopted legislation amending existing statutes related to economic development for projects that meet heightened job and capital investment criteria.
The legislation addresses sales tax exemptions, the calculation of corporate income taxes and the issuance of economic development bonds. Specifically, the bill addresses these “performance-based” incentives, such as extending a sales tax exemption on the purchase of computer equipment. Currently, computer equipment used in technology intensive facilities is exempt from sales taxes.
The amendment extends the sales tax exemption to computer equipment used in connection with manufacturing facilities meeting the heightened job and investment criteria.
In addition, it accelerates a phase-out of sales taxes on materials used in the construction of new or expanded facilities. At present, manufacturers and distributors pay a two percent sales tax on construction materials on qualified projects with a complete phase out on material purchases by July 1, 2011 with a minimum capital investment of $100 million. The amendment exempts the remaining two percent effective Nov. 1 for projects with the heightened job and capital investment criteria.
It also extends a sales tax exemption on fuel purchased by a manufacturer meeting the heightened investment criteria for test flights of the manufacturer’s aircraft. In addition, the exemption would apply to fuel purchased by the manufacturer to transport aircraft between manufacturing facilities. However, the exemption does not apply to the transportation of parts or personnel.
Plus, it allows companies meeting the heightened investment criteria to enter into a special agreement with the Department of Revenue to determine the formula by which corporate income taxes are calculated for a period of 10 years, provided the jobs are maintained. Also, it authorizes the issuance of economic development bonds – not to exceed more than $170 million at any time, to be used toward the construction of the Boeing facility.
With the passage of this legislation, Boeing announced plans to open a second assembly line for its 787 aircraft, the Dreamliner, in North Charleston. Boeing already makes rear fuselages for the 787 in North Charleston and owns half of another company that assembles mid-fuselage sections.
According to reports, Boeing plans to create at least 3,800 new, full-time jobs and invest at least $750 million over 7 years.  These jobs are in addition to those currently located in Charleston. Boeing plans to break ground on a new facility, described as being as large as 584,000 square feet, in the coming weeks, possibly as early as November.
The company plans to begin work on the first locally made 787 jetliner in 2011 and will deliver the first such aircraft from the facility in early 2012. Boeing has plans to produce 10 planes a month by 2013.
It is amazing what we can get accomplished with teamwork! I am hopeful that the teamwork that was exhibited to get this Boeing plant in South Carolina will continue to bring even more great economic development opportunities for our state. In addition to the 3,800 jobs that this will create I am confident that there will be additional business coming to S.C. because of the need of supplies.