FLORENCE, S.C. – The South Carolina Small Business Chamber of Commerce shares the concerns of Florence Mayor Stephen J. Wukela regarding a bill, proposed by state Rep. Wallace H. “Jay” Jordan, that change the way municipalities collect business license taxes.
Frank Knapp Jr. said via email on Sunday that the chamber shares Wukela’s concerns that the proposed bill would shift the business licenses tax burden from big to small businesses.
“Regarding the issue of the business fee being based on gross vs net revenue, we would argue that the bill is not “revenue neutral” for local small businesses given, as the Mayor points out, big corporations with home offices outside the city easily showing zero net revenue for the operation in the city,” Knapp said in his email.
Ted Pitts, president and CEO of the South Carolina Chamber of Commerce, disputed this, saying that the idea was proposed by the chamber’s small-business council.
“The call for business license tax reform came from our Small Business Council and is their top priority,” Pitts said. “The current system is cumbersome and difficult to comply with for small businesses that do business across multiple towns and cities. Moving from a gross receipts tax to a net tax is good for small companies trying to thrive.”
Knapp said that like the state municipal association, the South Carolina Small Business Chamber has supported since at least 2010 a standardized, online business license form for all cities in the state to use. He added that the small business chamber has never advocated for the state to tell municipalities the fees to charge or the criteria.
“Our efforts were always about simplification and convenience for businesses in filling out the forms,” Knapp said.
The bill, H.B. 4431, provides structure to the collection of business license taxes by municipalities in the Palmetto State.
Currently there is little uniformity in the way business license taxes are collected, meaning that different municipalities can have different filing dates, different forms to fill out, different fee structures, and different business classifications.
The bill proposes a uniform system of business license application, with filing dates and classifications standardized and available to be filled out online on a webpage of the office of Secretary of State Mark Hammond. It also would change the collection of taxes from collection based upon gross revenues of the business to collection based upon the net income of a business.
Gross revenue is the amount a business makes without accounting for expenses required to produce its product or service. Net income is the amount left over once a business has subtracted its expenses from its gross revenues.