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Committee reviews small-business tax code bill offering $10,000 personal-property exemption and corporate license fee changes
Summary
A bill described as the 'State of South Carolina Small Business Tax Code of 2026' would exempt the first $10,000 of net depreciated value of small-business personal property and allow certain in-state corporations to exclude the first $50 million of equity contributions from the annual license-fee base. The committee pressed administrative questions and flagged unclear language in section 5.
Senators on the committee reviewed S.B. 5006, described in testimony as the “State of South Carolina Small Business Tax Code of 2026,” which would add a personal-property exemption and change corporate license-fee calculations for qualifying corporations.
A bill presenter summarized the measure: Section 2 would exempt the first $10,000 of net depreciated value of business personal property owned by a small business, effective for property-tax years beginning after 2026. Section 3 adds return and reporting clarifications for certain manufacturers. Section 4 would require business personal-property returns to be filed with the Department of Revenue. Section 5 would change corporate license-fee treatment by allowing in‑state corporations to exclude the first $50,000,000 of equity contributions from the annual license-fee base; it also adds language to an existing code section on member and manager standards for conduct.
A committee member praised the measure as potentially beneficial for small businesses, saying it would "really, really help them all." Committee members pressed operational questions: whether entities with under $10,000 in net depreciated value would still need to file returns and how depreciation and subsequent purchases would be handled in later tax years. The presenter said he would check with the Department of Revenue on filing requirements and confirmed depreciation would continue to be handled under existing formulas.
Committee members also focused on a provision in section 5 that the presenter and at least one senator said they did not fully understand. One committee member said, "I read it myself and don't know what it means and I don't think we should pass something that we don't know what it means," and the panel agreed the House language should be clarified or that an amendment should be ready on the Senate floor.
The committee agreed to send the bill to the full Senate with members reserving the right to amend language if necessary; no roll-call was recorded.
What happens next: The bill is reported to the Senate floor for further consideration. The committee specifically requested clarification on filing requirements and the intended scope of the corporate-license-fee changes before final passage.
