The City of Charleston Finance Committee on Oct. 6 approved Bill 80-58, a municipal code amendment to update exemptions to the city's business and occupation (B&O) tax to mirror recent state law changes. The committee adopted the bill during its regular meeting at Charleston City Hall.

City Attorney Kevin Baker said the bill implements changes enacted by the state legislature, including the phaseout of the B&O tax on new automobile sales and a new exemption for businesses with less than $2,500 in annual gross income. "This bill will implement some state law changes that the legislature made," Baker said during the meeting. "The formula was a little confusing, so rather than trying to put that into code earlier, we waited until now."

The committee recorded staff estimates of fiscal impact: an annual revenue loss of about $3,000 from the under-$2,500 exemption and roughly $530,000 from the elimination of the B&O tax on new automobile sales. Baker and other officials said municipal leaders lobbied the legislature against the change but that the law took effect this fiscal year.

Discussion: committee members asked about the expected revenue impact and legislative history. Baker described outreach during the legislative process and said the city collector's office has been working with local dealerships to implement the state rules.

Decision: the committee moved and approved the bill during the meeting by voice vote; the ayes were declared to have adopted the bill.

Why it matters: the change shifts tax collection responsibility for new vehicle sales to the state framework and reduces a modest amount of revenue for the city from very small businesses but a much larger amount tied to vehicle sales, which staff said will affect the city budget this fiscal year.

What's next: the adopted code amendment will be incorporated into the municipal code and applied by the city collector's office under the state law timetable.