Time Is Running Out for Business License Standardization

The SC Business License Tax Standardization Act, Act 176, sets January 1, 2022, as the date by which every local government across the state that has a business license tax must begin administering that tax the same way. Although that compliance deadline is six months in the future, there are standardization steps that cities and towns need to have taken by now to meet the January 2022 deadline. For those that have not yet taken action, there is not much time left to work toward compliance and avoid problems in 2022. 

Getting in the rebalancing assistance queue 

The Municipal Association of SC has developed a seven-step process to simplify the standardization process. The third step involves rebalancing tax rates to ensure that the process of making changes to business license practices does not result in a revenue windfall for the city or town. Act 176 requires revenue neutrality during the compliance process. Municipal Association staff have been working with business licensing officials in each city or town to adjust tax rates appropriately. Given the significant amount of work involved to rebalance business license tax rates, the cities and towns now requesting rebalancing assistance are going into a queue. Those that are not yet in the rebalancing assistance queue should immediately contact their assigned Municipal Association business license liaison to avoid getting caught in an end-of-year bottleneck. 

Further steps 

To comply with Act 176, cities and towns will also need to adopt the new version of the model business license ordinance that addresses the law’s numerous requirements. Cities and towns should not attempt to update their existing ordinances. They will also need to familiarize themselves with critical information on the changes to the law so they can provide this information to their local business owners.

Municipalities need to work now with the Municipal Association to begin the process of using the online Local Business License Renewal Center. As with rebalancing, setting up each municipality to use the business license renewal portal will be a time-intensive one. With the 2022 compliance deadline approaching quickly, local officials need to contact their business license liaisons as soon as possible. 

Learn more 

Beyond the Association’s landing page for business license standardization, the City Quick Connect podcast has episodes that delve into many of the critical issues of business license standardization: 

• Business License Standardization Basics
• Standardization and Business License Data
• Adopting the Model Business License Ordinance
• Rebalancing Business License Rates 
• Standardizing Business License Dates and Applications
• Business Licensing and Third-Party Collection Companies