The SC Business License Standardization Act, also known as Act 176, established many new business licensing requirements for cities and towns that they must implement by January 1, 2022.
Standardizing license years, due dates and class schedules are just a few of the changes the act requires, and because of the limited time before the deadline, cities and towns should now be well along in the process of making the changes to their business license ordinances and procedures. The standardization process is not optional; it is now required by law.
The Municipal Association of SC developed a seven-step process to simplify the standardization requirements:
- Convert to the standard business license year. The new license period, mandated by state law, is May 1 to April 30.
- Review all business license tax data for accuracy. Each business needs a correctly-assigned North American Industry Classification System number, or NAICS number.
- Rebalance business license tax rates to prevent a windfall or loss. Act 176 specifies that complying with the law cannot have the effect of creating a revenue windfall for the 2022 business license cycle relative to recorded 2020 revenue.
- Use the Association’s 2021 class schedule. The law requires that the Municipal Association create a new class schedule every odd year, approved by the SC Office of Revenue and Fiscal Affairs, which must be adopted by every municipality.
- Repeal and replace the business license ordinance. Municipalities should avoid revising their existing business license ordinances and instead adopt the Association’s 2022 version of the model ordinance. Municipalities that have begun the license year transition and rebalancing process can contact Melissa Harrill at mharrilll@masc.sc for a copy of the new model ordinance.
- Set up an online renewal center account. Act 176 requires cities to offer the Local Business License Renewal Center, an online portal hosted by the SC Revenue and Fiscal Affairs Office, for the renewal of existing business licenses.
- Notify stakeholders. Cities and towns need to communicate changes about the law with various audiences who will be affected by it. The Association’s standardization web page offers specific messages that can help explain the process for businesses, business license staff, elected officials and media contacts.
Those cities and towns that are not well on the way to completing the first five steps in this list may miss the upcoming compliance deadline.
Find more information for the business license standardization process online.