Standardized process


Lowcountry business owners — large and small — are confronting an inescapable fact of life: simplification is complicated.

A wholesale change to how South Carolina manages business licensing and taxation is creating confusion, conversation and a stepped-up need for communication.

The so-called “Act 176” — approved by the state Legislature in September 2020 — will take effect Jan. 1, 2022. The measure is designed to standardize business licensing by putting all taxing jurisdictions on the same footing to classify and oversee business licensing.

All property owners — including those who rent condos and vacation homes — will be required to obtain a business license.

Through standardization, Act 176 is expected, ultimately, to make life easier for business operators and government agencies by removing differences among the state’s more than 250 municipal taxing authorities.

But getting there is proving a challenge. Municipal workers are scrambling to update software, reclassify businesses into state-mandated categories and spread the word about the ins and outs of the changes. Among the tactics for information sharing: social media, television interviews, mailings and direct contact with rental NOVEMBER 2 0 2 1 // 39 agencies and employers.

It’s a complex choreography that will place all businesses and communities on a common tax licensing year to run from May 1 to April 30. The cost for a business license varies and generally is based upon the previous year’s overall revenues.

At the same time, putting businesses into uniformly recognized categories will mean “some will pay more, and some will pay less,” said Charlie Barrineau of the Municipal Association of South Carolina.

“We are getting calls,” he said, referring to the growing interest in the business community.

Local tax officials are revving up information campaigns, videos, mailings and meetings to spread the word and respond to inquiries. Because different communities have different existing policies, Act 176 impacts many differently.

April Akins, revenue services manager for Hilton Head, said the act will require all property owners who rent their property to obtain a business license. Currently, owners with only one Hilton Head rental property are not required to secure a license.

More than 7,000 business licenses are in effect in the town. That number of business licenses is expected to increase by the thousands when the one-exemption is eliminated. Akins said more than 40 percent of the town’s businesses will be reclassified to comply with Act 176. The act also requires that taxing authorities “rebalance” business taxes so municipalities do not realize a “shortfall or a windfall” in tax revenues.

Rebalancing has proven a challenging exercise for some local governments.

“I’m busier than a one-armed paper hanger,” Akins said. Natalie Majorkiewicz, treasury manager for Bluffton, said town employees have worked as a team to sweat the details for reviewing and classifying some 3,600 business licenses. Business licenses account for more than $2.2 million annually for Bluffton’s general operations, she said.

“We are here to serve the Bluffton business community,” Majorkiewicz said. “The Town’s Business License Division is available to answer any questions and walk any business owner through the process.”

Officials in Hilton Head and Bluffton continue to provide information and updates about Act 176. To inquire:

Revenue Services Department

Treasury department