The South Carolina General Assembly passed H4431 in September. The new Act 176, the SC Business License Tax Standardization Act, standardizes the business license tax process with a uniform due date, application, class schedule and online renewal portal.
The new law also means that cities and towns that collect the tax will need to transition to a new way of administering the tax in 2021, since it goes into effect January 1, 2022. This will be an involved process with many steps, but statewide standardization will make the work of businesses operating in South Carolina’s cities and towns easier. Standardization will also help to maintain the tax’s stability as a municipal revenue source.
The Municipal Association’s staff has already begun the work to help cities and towns make the transition, and they will be doing so throughout 2021. Officials should be on the lookout for presentations, articles in Uptown and episodes of the City Quick Connect podcast, among other sources of information. The guidance from the Association will include instructions on adjustments to local ordinances, rate schedules and more.
Here are a few basics of the business license standardization provisions in Act 176, with more information on the Municipal Association’s website:
- Standardizes due dates everywhere to be April 30, with a May 1 start to the license year
- Calculates the tax on gross income for either the calendar year or business' fiscal year
- Standardizes the definition of gross income
- Requires cities to accept a standard business license application
- Requires jurisdictions to adopt an updated, standardized class schedule every odd year
- Establishes an online business license renewal payment portal, hosted and managed by the SC Revenue and Fiscal Affairs Office
- Creates a standard appeals process of business license assessments for all jurisdictions
The Association is hosting virtual information sessions on standardization in general, and others focusing on the North American Industry Classification System codes. Sessions are coming up December 2, 3, 8 and 9. Find more information here, and register by contacting Caitlin Cothran at ccothran@masc.sc or Melissa Harrill at mharrill@masc.sc.