The Municipal Association staff has worked with legislators and stakeholders to negotiate on H4431, the business license bill. The Association has been negotiating standardization and is committed to finding a resolution that’s fair for cities and businesses.
This week, the House Labor, Commerce and Industry Committee amended the bill. The amendment struck all of the original bill’s existing language and replaced it with standardization language. Language was also added to clarify the circumstances under which some businesses do or do not have to pay the business license tax. Because the amended bill has language which would standardize the business license process, it is now appropriate to support H4431 as amended. Support for the bill could change if any amendments to the bill include language that would harm cities and towns.
Here are some details of the current amendment:
Read a summary of the standardization language included in the amended version of the bill.
- All business licenses statewide would have the due date of April 30. May 1 would start the license year, and penalties would begin after May 1.
- Business license taxes would be calculated based on gross income for either the calendar year or the business’ fiscal year, with some additional rules specific to contractors. The original bill called for a calculation of the tax based on net income, which the Municipal Association opposed.
- A standard business license application would be distributed by the SC Revenue and Fiscal Affairs Office.
- Jurisdictions would be required to adopt an updated class schedule every odd year, with the schedule recommended by the Municipal Association of SC and adopted by the Revenue and Fiscal Affairs Office. Jurisdictions would have some flexibility to create sub-classes for economic development.
- As a payment option for businesses, business license renewals can be made through an online payment portal hosted and managed by the Revenue and Fiscal Affairs Office. The entire taxpayer payment would go directly to jurisdictions. Jurisdictions would still be required to accept payments by other means, such as in person, by phone or mail.
Municipal officials should contact their legislators to support H4431 as amended and keep up to date as the legislative session continues. Be sure to read From the Dome to Your Home, the weekly legislative report, and listen to the City Quick Connect podcast.
In the latest episode of the podcast, the Municipal Association’s Director of Advocacy and Communications Scott Slatton and Manager for Municipal Advocacy Casey Fields discuss many of the specifics of the new version of H4431.
Hometown Legislative Action Day on February 4 brought together about 475 representatives of cities and towns around South Carolina. Municipal officials heard from state senators on many issues impacting the state and local level, most notably business license legislation. In the afternoon, they headed to the State House to engage with their own delegations.
State Senate President Sen. Harvey Peeler gave the opening keynote address, calling attention to the importance of the relationship between the General Assembly and local officials. He outlined critical topics for the current legislative session, including education reform, the future of Santee Cooper and the $1.8 billion budget surplus, and closed with a reminder of the importance of the 2020 Census.
“If you’re going to do one thing for your cities and towns, make sure that the people are counted,” he said.
A senate panel discussion brought together Sens. Tom Davis, Shane Massey, Ronnie Sabb and Katrina Shealy. They dug into many of the same key issues as Peeler, and discussed the possibilities for H4431, the bill that would change the methods by which a business license tax is calculated, purchased and enforced.
Sen. Marlon Kimpson spoke during lunch. He covered such topics as affordable housing as well as past and current legislative preemption efforts in areas such as wages, vaping and plastic bag bans.
“The reality is that the people on city council, and the people in Inman, Georgetown, Spartanburg, Greenville, and all the towns are in a better position than me to determine whether or not plastic bags are an issue in your jurisdiction,” he said.
Cornelius Huff, mayor of Inman and president of the Municipal Association of SC, also touched on the value that local government brings when protecting residents and local businesses.
“We are the government closest to the people making decisions that affect our residents’ basic quality of life every day. We are listening to the concerns from residents about plastic bags in creeks and rivers. We are listening to the concerns from residents about vape shops located near schools and churches,” he said. “And guess what? We are taking action. We are answering those concerns with action and changes at the local level.”
Municipal Association Executive Director Todd Glover discussed the threat that H4431 would have on $400 million of revenue that cities and towns collect every year to provide services. He said the Municipal Association believes that passing a bill that is advantageous to both municipal government and to businesses during the current session would be beneficial.
The Municipal Association supports standardization of business licensing practices as a way to treat businesses and cities fairly. This includes standardization of due dates as well as the passage of the model business license ordinance, which has happened in about 130 municipalities.
Other HLAD sessions included “Place Branding and Economic Development,” highlighting efforts in Charleston, Lake City and Travelers Rest. The SC State Election Commission provided a presentation on issues seen in recent election cycles and demonstrated the new voting system it began using in 2019. Attendees also heard from the SC Public Employee Benefit Authority about the state’s retirement systems and health plan, and also from the Municipal Association’s Risk Management Services on reducing liability and claims costs. Presentation materials from HLAD will be posted on the Municipal Association’s website.