- The new license period is May 1 to April 30. This license period is now mandated by state law.
- It is important for cities and towns to begin planning for the license year transition before the rebalancing process or adopting the model ordinance. This will help ensure a smooth transition to the new license year for businesses and to reduce problems because of license year and fiscal year overlap.
- Each city and town needs to consider how the license year transition will overlap with its fiscal year and the current business license calendar.
- To be in compliance with the January 1, 2022, effective date of the new law, municipalities need to transition so that their license period ends April 30, 2022. Those whose current license year ends before May 1 need to extend the license period so that it ends on April 30, 2022. Those whose current license year ends after May 1 will need to shorten the license period so that it ends on April 30, 2022.
- Changing the license year will require council action and the city or town notifying its businesses. It is important to notify all businesses early and often by mail, email and on renewal notices about the license year transition.
- For more information on steps to convert to the standard business license year, contact the
business license standardization liaison assigned to the municipality.
- Cities and towns must rebalance their business license tax rates to ensure revenue neutrality during the 2022 business license cycle. In other words, achieving compliance with the law during the first year of 2021 cannot have the effect of creating a revenue windfall relative to 2020 revenue.
Export the business license data to an Excel file and begin the rebalancing process so that 2022 revenue will not show a windfall relative to 2020 revenue or create an unexpected revenue loss.
Business License Tax Rates Rebalancing Process
Sample Rebalancing Data Export Spreadsheet
- The Association created an Excel template and instructions to assist with the rebalancing process. Please contact Eric Budds at
email@example.com or Melissa Harrill at
firstname.lastname@example.org to begin this process.
- Previous schedules included the standard seven classes and a special Class 8. Beginning with the 2021 class schedule, there will be seven standard classes, a Class 8 showing mandatory special classes based on state law and a Class 9. Class 9 outlines business types that can be placed into optional, special subclasses.
- Act 176 mandates that the Municipal Association create a new class schedule every odd year to be approved the by the Office of Revenue and Fiscal Affairs and then adopted by every municipality.
- The Association advises cities and towns to repeal your existing business license ordinance and replace it with Association’s new model ordinance. The law creates numerous, specific requirements of municipalities that collect the tax, and attorneys have carefully vetted the model ordinance to comply with all of them. This focus on compliance makes the new model ordinance different from past model ordinances, which provided only suggestions on best business license practices.
- Because of all of these important changes, municipalities should not revise their current business license ordinance. Instead, every city and town with a business license tax needs to repeal current ordinance and adopt the 2022 model ordinance.
- In an effort to track the transition process across all municipalities, and because of the new format and many changes to the ordinance, the Association is releasing a copy of the model ordinance to each city or town on request.
- After your city or town has completed the license year transition and started the rebalancing process, contact Melissa Harrill at
email@example.com for a copy of the new model ordinance.
- Cities and towns need to communicate changes about the law with various audiences who will be affected by it.
- It is important to communicate to various stakeholders the changes taking place due to the business license standardization act. How these changes will impact each group varies so we have provided some language to assist cities in explaining the ramifications.
Business License Staff
Santee-Lynches and Pee Dee Councils of Governments