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S.C. Chamber Outlines Tax Reform Goals in Letter

November 3, 2016

October 31, 2016

To: South Carolina House Tax Policy Review Committee:

RE: Business Tax Reform

Dear Members of the South Carolina House Tax Policy Review Committee,

Thank you for allowing me to provide testimony during your public hearing on October 18. As I stated during the meeting, it's a tough job — but the business community is very appreciative of your work. We must improve the state's tax system to remain competitive in business and job creation. There are two specific pieces of our current tax system where the Chamber sees need for reform.

The first is business property taxes. Act 388 has pushed the property tax burden for school operations and maintenance disproportionally to businesses, forcing school districts to use businesses as their primary source of revenue. This unfair burden has negatively impacted both businesses and school districts and needs to be reformed.

The South Carolina Chamber of Commerce supports legislation to address the consequences of Act 388, which includes:

  •  Reducing the manufacturing property tax rate from 10
  • Reduction of non-owner occupied property tax burden 
  • Protecting fee-in-lieu agreements

The second piece we would like to see reformed is South Carolina's business license fee system. The current system is not uniform across jurisdictions and is one of the most unfriendly requirements that businesses have to comply with. Business licensing is especially burdensome to small businesses that do business in multiple municipalities.

Today, roughly 230 municipalities and eight counties impose a business license fee. In order to operate in the Charleston area alone, a service provider is required to pay a minimum of 28 municipal business license fees and complete 28 separate sets of paperwork. This lack of standardization is a clear impediment to business development and growth.

The South Carolina Chamber of Commerce supports legislation which standardizes the business licensing system, which includes:  

  • One form
  • One expiration date
  • One rate class which grandfathers in and allows negotiated deals for economic development purposes
  • One place to file, with the Secretary of State as the filing body
  • The further study of apportionment issues
  • No additional revenue for municipalities derived from system reform

The Chamber applauds the work being done by the SC House Tax Policy Review Committee. As we near the beginnrng of the 2017 legislative session, we look forward to working with you to make South Carolina the best place in the nation to live, work and do business.

 

Thank you,

Ted Pitts

President & CEO

South Carolina Chamber of Commerce

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