SC Legislative Update – 9.28.20

By Ben Homeyer

The General Assembly session ended with a huge flourish.

Business License Tax reform passed the General Assembly after more than ten years!

This legislation streamlines and standardizes the business license tax process without negatively impacting municipal revenue (which has been a major sticking point for years).

    • There will be an online payment portal, common applications, appeals processes.
    • Common time frame for all applications (May 1 – Apr. 30)
    • Third party collections were allowed, but some protections:
      • Third-party entity is prohibited from assessing business license taxes or requiring a business entity to remit confidential business license tax data to that private third party
      • If a business requests in writing that the third party cease communication with the business, then the third party is strictly prohibited from any further contact.
      • Anti-harassment language
      • Prohibited from sharing any data from the business
      • The right to sue the third party collection group as a private right of action.

Full language of the bill can be here.

Cares Act Phase II was adopted:

    • $420 million for the Unemployment Insurance (UI) Trust Fund.
      • This is in addition to the $500 million allocated for the trust fund in the Phase I
    • Set the total effective UI tax rates for 2021 rate classes at the same total effective rates as 2020 rate classes
      • meaning that regardless of the trust fund balance, for 2021, businesses will not have to pay tax rates above what they are paying this year
    • DHEC Testing and Monitoring: $73M
    • MUSC Testing: $20.2M
    • Nonprofit Relief Program: $25M
    • Minority and Small Business Relief Program: $40M
      • Priority must be given to minority businesses, to applicants that did not receive other assistance, such as a Paycheck Protection Program loan or other CARES funds, to businesses with fifteen or fewer employees, and to businesses that demonstrate the greatest financial need
  • State, Local Government, Independent College and University Expenditures: $115M
  • Forgiven Paycheck Protection Program (PPP) loans are excluded from gross income for state tax purposes.

Full language of the bill can be found here.