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South Carolina business property owners have new reasons to scrutinize their property tax assessment and
tax exposure.

The Property Tax Reform Act approved last year gives owner-occupied residential property owners a tax break. Businesses, rental properties and second homes don’t benefit from the Act, so a tax shift will take place. Since the total tax base is projected to increase over 8% next year, businesses could be hit with much higher tax bills.
 

Residential Taxes Cut $88 Million
Beginning this fall, residential owners no longer pay for school operating taxes on the home in which they live. This amounts to substantial tax savings for homeowners since school taxes typically make up more than half of their property tax bills.
 

The school tax exemption is being paid with higher sales taxes. On June 1, 2007, the state sales, use and casual excise tax went from 5% to 6%. The increase does not apply to accommodations or unprepared food. In fact, the sales tax on unprepared food was reduced from 5% to 3% on October 1, 2006.

After homeowners’ school taxes are paid this year, any additional sales tax revenue will help pay residential city and county property tax bills in 2008.

Other Effects
While homeowners are the big winners, the Tax Reform Act contains changes that impact all property owners throughout the state.

The Act:

• Limits taxable value increases to 15% within a 5-year period

• Requires properties to be reappraised when an assessable transfer of interest (ATI) occurs

• Appraises new construction at its reassessment level unless there is an ATI in the same year

• Mandates that real estate owners file a certificate of ownership annually

• Changes the appeal period to 90 days after a tax notice if no assessment is sent

A Push for More Reform
The group, which led the charge for tax relief says its job is not over. Emerson Read, the Statewide Chairman of nohometax.org, told the Charlotte Observer, “The property tax relief law did nothing to address taxes on other properties including second homes, rental property and businesses.”

To provide tax relief for all property owners, the group is now lobbying for government spending limits at the state and local level. Supporters say H.3615, known as the "Local Government Fiscal Accountability and Fairness Act," will limit local government spending increases and roll back artificial and arbitrary budget and millage increases. H.3295 will do the same as H.3615 but at the state level.