State law requires cities and towns that issue business licenses to update their business license class schedules every odd-numbered year. As a result, councils must pass an ordinance making the necessary updates by December 31, 2025.
This is a requirement of South Carolina’s Business License Tax Standardization Act of 2020, or Act 176. The law established ongoing steps that cities and towns in South Carolina must take to keep their business licensing practices compliant with state law.
Legislators intended for Act 176 to streamline business licensing, making it uniform and consistent for businesses operating in multiple jurisdictions across South Carolina.
In a recent Municipal Association of SC podcast, Manager for Local Revenue Services Caitlin Cothran and Revenue Analyst Kaylee Summerton discussed in depth how the class schedule update process works.
Updating the class schedule
A standard class schedule for categorizing businesses accurately helps ensure that businesses are placed in the appropriate class based on the most recent statistical profitability data from the Internal Revenue Service. A standardized class schedule promotes clarity by providing businesses with an understanding of their licensing requirements based on their specific business activity.
To make updating the class schedule as simple a process as possible, the Municipal Association of SC developed an amendment to the model business license ordinance that includes the updated standard class schedule.
Municipalities must adopt this class schedule by ordinance by December 31, 2025. This class schedule will be used for the business licensing year running from May 1, 2026, to April 30, 2027, as well as the license year running from May 1, 2027, to April 30, 2028.
Before January 1, 2026, cities should continue using their current class schedule.
Additional resources
The Association’s website has a Business Licensing in South Carolina webpage, which has materials explaining the law, training resources, the model ordinance and class schedule, as well as sample documents that business license administrators need.