Ad hoc committee recommends drafting bill to exempt first $10,000 of business personal property for small firms

The Economic Development Utility Modernization Ad Hoc Committee voted to recommend drafting legislation that would exempt the first $10,000 of net depreciation value of business personal property for qualifying small businesses.

Committee leadership said the exemption is aimed at "mom-and-pop" businesses that are most affected by property assessments on long-lived items. The chair described the change as modeled "like a homestead exemption" and said qualifying businesses would still file an annual certification so officials can detect fraud.

Under the committee's description, a qualifying small business would be one whose owners pay South Carolina income tax and that either employs fewer than 100 people or has gross sales of less than $10,000,000. The chair said the definition was crafted to capture seasonal businesses without unintentionally excluding firms that meet one threshold but not the other.

The committee packet includes a separate corporate license fee provision intended to help certain startup companies in fields represented by the South Carolina Research Authority and SC BIO, officials said. Chair noted staff consulted with county officials and the Department of Revenue while estimating revenue impacts and designing protections so local governments would not face "a massive loss" in services.

Mr. Smith, who identified himself as a member of the small-business community, said the measure was "a nod in the right direction" and that relief was particularly welcome during the month when businesses make large tax payments. He told the committee he and many colleagues "wait for that very last day" to pay to keep funds in their business accounts as long as possible.

The draft does not include an indexing mechanism for the $10,000 threshold; the chair said indexation could be revisited in later years but is not part of the current draft. The chair also noted surrounding states have larger exemptions, and the corporate license fee provision was included to address competitiveness concerns.

A motion to recommend drafting the bill was made and seconded. The committee approved the recommendation by voice vote; the chair announced, "Ayes have it." The chair said he will draft the bill, add the members present as initial sponsors, and aim to file the draft by the end of the week with a target of Ways and Means subcommittee hearings the following week. The committee adjourned after approving the recommendation.

The committee did not provide a roll-call tally for the voice vote in the record; counts were not specified.