From right to left, South Carolina Reps. Davey Hiott of Pickens, Richie Yow of Cheraw, Brandon Newton of Lancaster and Neal Collins of Easley look over a tax-cut proposal in a House Ways and Means Committee meeting Tuesday, Feb. 3, 2026, in the House office building on Statehouse grounds in Columbia. (Photo by Travis Bell/STATEHOUSE CAROLINA/Special to the SC Daily Gazette)
COLUMBIA — South Carolina small business owners could get a break on the property taxes they pay on office furniture, machinery and appliances they need to operate.
House budget writers unanimously on Tuesday advanced the proposal to exempt the first $10,000 worth of personal property value from appearing on small businesses’ tax bills. The vote sent the legislation to the House floor.
“I’ve always found this tax to be the most aggravating tax small businesses pay because it’s on chairs, desks, computers, things that they already pay sales tax on,” said Rep. Brandon Newton, the main sponsor. “I’ve always wanted to get rid of it.”
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To qualify as a small business and earn a full or partial exemption on the 10.5% tax, a company must have fewer than 100 full-time employees or less than $10 million in annual sales.
According to data from the U.S. Internal Revenue Service, approximately 97% of businesses report less than $10 million in receipts annually. These companies own just 6.3% of the nation’s total business assets. Large corporations make up the other 3% and hold the vast majority of assets.
Newton pointed to the rising costs and inflation all businesses are facing nationwide as the impetus for the bill.
“Small businesses need to have a break, and I think this is the perfect time to do it,” the Lancaster Republican said.
If the exemption is passed, fiscal analysts estimate South Carolina’s 46 counties will collectively lose $9 million in tax revenue next year.
Impacts ranged from $612,500 fewer collections for Richland County to $14,000 less for McCormick County. Charleston, Greenville, Lexington and Orangeburg counties also saw impacts of more than $500,000 each.
By comparison, counties collected a total of $23 million in business personal property taxes during the budget year ending June 30, 2024, according to the state tax agency’s latest annual report.
Richland County officials suggested they would need to raise overall property tax rates to make up for the lost revenue.
The state’s fiscal experts, in their analysis, wrote that other local governments would likely do the same, spreading the cost across all taxpayers within the county.
In addition to cutting business property taxes, the bill reduces fees collected from startup companies on money raised from so-called angel investors and venture capitalists.
The state would give businesses headquartered in South Carolina a break on fees for the first $50 million raised. The change is estimated to reduce state fees collected on venture capital dollars by $1.7 million annually. An average of 51 companies would qualify annually, according to data from the South Carolina Research Authority.
The proposal comes as a larger debate surrounding tax cuts makes its way through the Statehouse.
Senate budget writers last month advanced a House-passed measure further slicing the state’s income tax rates, with the goal of eventually doing away with the tax altogether.
Senators made no changes to the House’s proposal and upped the ante with a cut of their own, this one to the property taxes on the primary residence of people 65 and older who’ve lived in their home for at least five years. They would pay no property taxes on the first $150,000 of their home’s value, three times the existing tax break of $50,000.
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Property taxes don’t go to the state. They’re collected by counties to cover the cost of local government services. But under the Senate proposal, the state would reimburse counties an estimated $259 million for an expansion of what’s called the Homestead Exemption.
Altogether, those two bills would reduce state revenue by about $378 million for the fiscal year starting July 1.
The House bill giving a tax break to small businesses, signed onto by 30 Republicans and two Democrats, doesn’t provide counties a direct offset.
Newton said counties are on track to receive more state aid in the coming budget. Those disbursements, however, have only increased by about $2 million each budget cycle since 2020 — far less than the $9 million in reduced collections.
Newton said the bill’s bipartisan support “further proves we do need to have a conversation about property taxes in South Carolina.”
“This is simply a small tweak,” he said. “But I hope when we have the larger conversation in the coming years about redoing all of our property taxes that we look at business personal property as a larger issue.”
Courtesy of South Carolina Daily Gazette
