S. 436 amends South Carolina’s property tax laws to provide a new exemption for airline company aircraft and to change how those aircraft are valued for tax purposes. The bill exempts 36.8421 percent of the fair market value of all aircraft owned by each airline company from property taxes, which is functionally similar to reducing the assessment ratio from 9.5 percent to 6 percent. It also revises the “time on the ground” component used in allocating aircraft value to South Carolina by specifying that each landing counts as 30 minutes and each overnight stay or maintenance day counts as 2 hours.
The bill is aimed at commercial airline aircraft and the state’s aircraft property tax system, which is administered by the Department of Revenue. Under the existing framework, aircraft operated in South Carolina are taxed based on a combination of ground-time and mileage ratios, with revenue deposited into the State Aviation Fund. The fiscal impact statement estimates the bill would reduce aircraft tax revenue by about $5.237 million beginning in FY 2026-27 when the exemption and valuation changes are combined, while administrative costs to DOR would be minimal and handled with existing staff and resources.
Impact
The bill would amend Section 12-37-220 and Section 12-37-2440 of the South Carolina Code to create a targeted property tax break for airline aircraft and to alter the statutory method for calculating the in-state value of those aircraft. It would reduce the taxable value of airline-owned aircraft and change the formula used to determine the portion of aircraft value attributable to South Carolina, thereby lowering property tax collections that currently flow to the State Aviation Fund. The bill would take effect upon gubernatorial approval and would primarily affect airline companies, the Department of Revenue, and the State Aviation Fund.
Sentiment
The available voting history suggests strong support for the bill. It passed the Senate on second reading by a wide margin, 42-2, and later passed the House unanimously, 106-0. The committee report also recommended that the bill do pass, indicating favorable treatment in committee and across both chambers. Overall, the sentiment reflected in the legislative record is broadly positive and pro-passage.
Contention
The main point of contention is fiscal rather than procedural: the bill reduces property tax revenue, with the largest impact falling on the State Aviation Fund. Critics or skeptics would likely focus on the estimated $5.237 million annual revenue reduction and the policy choice to grant a substantial tax exemption to airline companies. Supporters, by contrast, appear to favor the measure as a tax relief or aviation-support policy and accepted the revised ground-time valuation method as part of that package. The lopsided votes suggest any opposition was limited and did not center on broad disagreement over the bill’s structure.