Business license tax bill has friends, foes

Business license tax bill has friends, foes

Lexington County Chronicle,
January 30, 2020

Business license tax bill has friends, foes

By Jerry Bellune

Why should you care about a bill to reform how businesses are taxed?

Because a business license tax reform bill may lower what your town receives in tax revenue and cripple services you now enjoy.

House bill H.4431 will enable manufacturers to reduce business license taxes by claiming that little or no gross revenue is created from sales in a town or city, said SC Small Business Chamber CEO Frank Knapp.

This will shift the tax burden to small businesses.

“Manufacturers, particularly big businesses with sophisticated accounting systems, will show that revenue is being generated from a location with lower or no business license,” he said.

If this happens, the town or city will lose millions of dollars leading to fewer government services and higher business license costs for all other businesses, he said.

Knapp said the chamber wants to amend the bill to standardize the business license form statewide and create a digital state portal that allows businesses to pay all business license fees in the state in 1 payment.

“A separate bill should be used to address all the other controversial issues.”

SC Chamber of Commerce CEO Ted Pitts, whose organization represents large manufacturers and companies, said he disagreed.

“The current system is cumbersome and difficult to comply with for small businesses that do business across multiple towns and cities,” Pitts said.

“Moving from a gross receipts tax to a net tax is good for small companies trying to thrive.”

Knapp said that the state Municipal Association and the Small Business Chamber supported a standardized, online business license form for all cities to use.

There is little uniformity in how business license taxes are collected, both say.

Municipalities can have different filing dates, different forms to fill out, different fee structures and different business classifications.

The bill would change taxes from gross revenue to net profits after costs.

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