The current business license fee system in South Carolina is broken, and places an undue and unfair burden on businesses in our state. Business licenses were originally intended to determine who was doing business in each jurisdiction, but over the years the system has turned into a means for local governments to raise funds on the backs of business owners without transparency or oversight. While the state caps millage increases, there are no safeguards to prevent local governments from gouging businesses. A city can increase the business license fee 100-200% per year in order to make up for other budgetary “shortfalls.”
This system needs reform. Reforms should include relief for businesses operating in multiple jurisdictions while also improving the ease of compliance. Reform would also eliminate the issue of builders, subcontractors, and suppliers paying three fees based on one construction project. Burdensome regulations and fees can be one of the largest hurdles for creating new businesses, and many times can stop businesses from expanding into new markets.
The HBA of South Carolina, in conjunction with other groups, commissioned a study (SC System of Business Licensing Reform Book) to illustrate the problems caused by the current system in our state. We are working with the General Assembly, as well as other trade and business associations, to push for improvements for business owners across the state.