South Carolina stands to lose more high-paying jobs and investment from abroad to surrounding states unless a proposed tax incentive plan passes the Legislature this year.

That is the view held by economic development officials across the state who are counting on a bill that would give a tax break to companies that increase their business through South Carolina's ports.

While still being fine-tuned by its backers, the proposal already has support not only from the maritime community but from lawmakers and officials in inland counties. They say the incentives could be key to leveling the playing field between South Carolina and states like Georgia, North Carolina and Virginia. Similar tax credits in those states are helping siphon away job-rich manufacturers and retail distribution centers from South Carolina.

House Speaker David Wilkins said he's not sure why the state is late in entering the game to reward companies that do business on the waterfront, business that produces high-paying jobs and generates investment in the state's economy.

"Those of us in the Legislature have been saying for years we need to be pro-business and competitive, but we've got to hear from the businesses what tools like this they need to be more competitive," said Wilkins, R-Greenville. "This is the first time anyone's approached me about it, and I think the time has come."

The tax credit plan would benefit new or expanding companies that increase their cargo volume through the state's ports by at least 5 percent in a year's time. To help boost business, they are rewarded with either a $500 tax credit for every full-time job they create or a 2 percent investment tax credit. For each additional 2.5 percent cargo-volume increase, the firm gets another $250 per-job tax credit or additional 1 percent investment tax credit.

The incentive plan has been proposed by a diverse group of supporters, from the State Ports Authority and the Charleston Metro Chamber of Commerce to maritime executives and state and county economic development groups.

Hal Johnson, executive director of the Orangeburg County Economic Development Commission, said the credits will make a difference in whether South Carolina is a serious contender for big-box retailers and importing-exporting companies looking to relocate or expand.

"Right now, we are getting our butts waxed by Georgia because they have an incentive just like this," Johnson said. "When a company compares apples to apples and they have this incentive and we don't, it puts us at an inability to compete right up front."

In the race between the states to attract distribution centers for companies like Wal-Mart, Lowe's and Home Depot, South Carolina's main resume-booster -- that it has the ultra-efficient, fourth-largest container port in the nation -- hasn't been enough to sway companies to pick the state over others.

The Savannah area alone is evident of Georgia's success. By 2002, it had snagged 14 retail distribution centers occupying 9 million square feet of space and employing about 3,500 people. The economic boom caused a serious pickup in traffic through the Port of Savannah, which is now in stiff competition with the Port of Charleston in claiming the title as busiest container port in the Southeast.

In the past three years, at least 20 large retail distribution centers considering locating in Orangeburg County or surrounding areas wound up settling in other states like Georgia that do give tax breaks for cargo-moving corporations, Johnson said.

Georgia hands out a $1,250 tax break per job or 5 percent investment tax credits to any business that increases its port traffic 10 percent in a one-year period. North Carolina waives some business taxes -- up to 50 percent or $2 million -- for port customers whose cargo wharfage and handling fees exceed the state's average for three years in a row.

Virginia also has an incentive of its own, so-called enterprise zones where companies can locate and pay reduced taxes.

"It reminds me of a hunter going out with a quiver of arrows," said Jack Daniel, president of International Forwarders Inc. and a proponent of the proposed tax credits. "If your competitor has 10 arrows and you only have eight, you aren't going to be able to get the prey as easily."

Rep. Bobby Harrell, chairman of the House Ways and Means Committee, said he's prepared to sponsor the trade incentive bill and is urging it be drafted and passed through the Legislature as quickly as possible.

"There's always a hesitancy when you start talking about tax incentives because folks are concerned about it," Harrell said. "They've got to understand we have to use the asset of the port to generate jobs, and better-paying jobs, for people."

HOW PROPOSED INCENTIVES WOULD WORK

South Carolina-based companies that increase cargo volume through the state's ports by 5 percent in a one-year period would be eligible for a $500 tax credit for each new job they create or a 2 percent investment tax credit. For each additional 2.5 percent increase in cargo volume, firms would receive another $250 per-job tax credit or additional 1 percent investment tax credit. The maximum credit available is $1,500 per new job or a 6 percent investment credit.