A BILL TO AMEND THE SOUTH CAROLINA CODE OF LAWS SO AS TO ENACT THE "STATE OF SOUTH CAROLINA SMALL BUSINESS TAX CUT OF 2026"; BY AMENDING SECTION 12-37-220, RELATING TO PROPERTY TAX EXEMPTIONS, SO AS TO EXEMPT THE FIRST TEN THOUSAND DOLLARS OF NET DEPRECIATED VALUE OF BUSINESS PERSONAL PROPERTY OWNED BY A SMALL BUSINESS; BY AMENDING SECTION 12-37-900, RELATING TO PROPERTY TAX RETURNS, SO AS TO PROVIDE THAT A TAXPAYER IS NOT REQUIRED TO RETURN BUSINESS PERSONAL PROPERTY FOR TAXATION IF THE TAXPAYER HAS LESS THAN TEN THOUSAND DOLLARS OF NET DEPRECIATED VALUE OF BUSINESS PERSONAL PROPERTY; BY ADDING SECTION 12-37-980 SO AS TO REQUIRE THAT ALL BUSINESS PERSONAL PROPERTY REQUIRED TO BE RETURNED FOR TAXATION TO BE RETURNED TO THE DEPARTMENT OF REVENUE; BY AMENDING SECTION 12-20-50, RELATING TO THE LICENSE TAX ON CORPORATIONS, SO AS TO PROVIDE THAT, UNDER CERTAIN CIRCUMSTANCES, THE FEE DOES NOT APPLY TO ANY PORTION OF THE FIRST FIFTY MILLION DOLLARS OF CERTAIN CAPITAL STOCK AND PAID-IN OR CAPITAL SURPLUS; AND BY AMENDING SECTION 33-44-409, RELATING TO STANDARDS OF CONDUCT OF A CORPORATE OFFICER, SO AS TO PROVIDE AN EXCEPTION TO REFRAINING FROM COMPETING.
H5006 is the “State of South Carolina Small Business Tax Cut of 2026,” but it also includes several additional tax and property-tax provisions beyond the small-business title. The bill creates a property tax exemption for the first $10,000 of net depreciated value of business personal property owned by qualifying small businesses, and it relieves taxpayers with less than $10,000 of such property from having to file that property for taxation if they certify eligibility to the Department of Revenue. It also requires business personal property that must be returned for taxation to be filed with the Department of Revenue rather than only locally.
The bill further amends the corporate license fee rules to allow certain South Carolina-headquartered corporations to exclude up to the first $50 million of equity contributions from qualifying investors from paid-in or capital surplus subject to the annual license fee, subject to certification and reporting requirements. In addition, it revises homestead-related property tax relief by creating a new dwelling-place exemption for eligible residents, repealing an existing section, and requiring tax notices to itemize the exemption and identify the “SLASH” reduction. The bill also updates and expands property tax exemptions for certain nonprofit housing corporations, including low-income, elderly, handicapped, and supportive housing, with new certification and reporting rules.
The bill’s impact on state law is broad, affecting multiple sections of Title 12 governing property tax exemptions, tax returns, and corporate license fees, as well as a corporate governance provision in Title 33 referenced in the bill title. It would reduce tax burdens for small businesses with limited business personal property, potentially lower the annual license fee base for some corporations receiving venture capital or angel investment, and alter how homestead and nonprofit housing exemptions are administered and documented. Several provisions are phased in for property tax years beginning after 2025 or 2026, and some require new Department of Revenue forms, certifications, and local reimbursement rules.
The overall sentiment reflected in the voting history is strongly favorable and noncontroversial: the bill passed the House 99-0 and the Senate 46-0. No committee transcript material was provided, and there is no recorded opposition in the supplied history. The unanimous votes suggest broad bipartisan support for the bill’s tax relief and administrative changes.
The main points of potential contention, based on the text itself, are administrative complexity and the scope of the tax benefits. The bill creates new certification, reporting, and documentation requirements for small businesses, corporations seeking the capital-surplus exclusion, and nonprofit housing corporations claiming exemptions. It also changes reimbursement treatment for some homestead-related local tax losses and allows counties to increase the new dwelling exemption without state reimbursement, which could matter to local governments. However, no specific opposition or debate is shown in the provided materials.
H5006 would amend multiple provisions of the South Carolina Code governing property taxation and corporate license fees. It creates a new small-business business-personal-property exemption, changes filing requirements for low-value business personal property, adds a statewide return requirement for business personal property, expands a corporate license-fee exclusion for certain headquarters receiving qualifying equity investments, revises homestead exemption administration and notice requirements, and updates nonprofit housing property tax exemptions with new certification rules. The bill would apply prospectively, with several provisions beginning for property tax years after 2025 or 2026, and would require the Department of Revenue to implement new forms, certifications, and compliance procedures.
The bill appears to have been received very positively. It passed the House 99-0 and the Senate 46-0, indicating unanimous support in both chambers. No committee discussion transcripts were provided, and there is no evidence in the supplied record of organized opposition or divided debate. The available voting history suggests the measure was viewed as a broadly acceptable tax-relief and administrative-reform package.
No explicit contention is documented in the provided materials, but the bill’s text suggests a few areas that could raise questions. Local governments may be concerned about reduced property-tax collections and the bill’s reimbursement rules, especially for the new homestead-related exemption and county-optional increases. Tax administrators and affected businesses may also note the added certification, reporting, and recordkeeping burdens tied to the small-business exemption, the capital-surplus exclusion, and the nonprofit housing exemption. The bill also combines several unrelated tax changes into one measure, which can sometimes draw procedural or policy criticism, though none is shown in the votes provided.