SC House Tax Policy Review Committee Update - SC Public Policy Alert - January 2017

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The House Tax Policy Review Committee met after session on Thursday afternoon to review several topics from previous meetings and to discuss a plan of action going forward.  Tom Cone and Don Hottel, Staff Counsel for the Committee, provided members with a brief summary of the issues discussed by the group regarding income, property, and sales tax during the previous eight meetings. 

Steve Davidson, Assistant Chief Counsel to the Labor Commerce and Industry Committee, presented an overview of a new business license fee bill that will likely be introduced in the House next week.  One of the main priorities of the proposed legislation is to create uniformity within the process of obtaining a business license across South Carolina.  The legislation would give the responsibility to the Secretary of State’s Office to oversee the collection of business license fees through a central filing location online.  A third-party payment processor (SC.gov) would collect the fees submitted through the online portal and would distribute the funds to counties and municipalities.  Business are not required to use the online method and may still file locally.

Along with the establishment of a centralized filing site, the bill provides for the creation of a standardized business license application as well as a uniform license for display.  Additionally, the legislation would create seven rate classes that are standard across the State. Counties or municipalities would be given the discretion to establish the tax rates within each respective class to make up for any lost profits as a result of the standardization.   

Another important issue addressed in the new bill involves the appeals process for business license fee disputes.  Under current law, the petitioner must pay the entire amount of a disputed fee before a protest can be heard.  The proposed legislation would require the petitioner to pay only 80% of a disputed fee and would also allow parties to have an “official conference” as an opportunity to resolve the dispute before going through the legal system.  Staff invited members to quickly submit any other recommendations they may have before the draft is finalized.

Going forward, members of the Committee expressed substantial interest in introducing tax reform legislation as opposed to publishing a committee report.  Representative Shannon Erickson (R-Beaufort) also suggested that the Committee discuss with the Ways and Means Committee the possibility of implementing a two-year budget cycle.  Members of the Tax Committee supported the idea, arguing that more time could be provided for research and discussion on complex matters such as tax reform.

Chairman Tommy Pope (R-York) announced that the Committee will likely meet again in March when new data becomes available and adjourned the meeting subject to the call of Chairman.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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