January 2012 marked the start of the first session of the 120th South Carolina General Assembly. SCMA will be lobbying on behalf of several key manufacturing and business issues.
SALES TAX EXEMPTIONS
There are several efforts underway that could jeopardize the state’s sales tax exemptions, which could result in millions and millions of lost dollars to manufacturers if these were to go away.
- Bodman vs. South Carolina: The SC Supreme Court heard in December in Bodman vs. South Carolina, where the plaintiff argues that the state’s sales tax exemptions are unconstitutional under the equal protection clause. A decision from the Supreme Court is expected in early 2012.
- Tax Reform Proposals: The House Republican Caucus Tax Study Committee and the Governor both plan to introduce major tax reform legislation that could eliminate some sales tax exemptions. This debate could result in a free for all where every special interest is trying to protect their exemptions and other state agencies that have seen their budgets cut in recent years vying for the possible newly found revenue.
STATE UNEMPLOYMENT INSURANCE TAX
In 2010, the state legislature changed the formula for setting the rates for state unemployment insurance taxes, which resulted in significant tax increases to many South Carolina businesses. The tax increase was needed to pay back over $900 million in federal loans the state borrowed to maintain the unemployment system and to maintain the system going forward; however, manufacturers and staffing companies were hit particularly hard with the new increases. So, in 2011, the state appropriated $146 million to go towards paying off the federal loans, which resulted in 22% tax decreases for businesses. In order to maintain in 2012 the tax rates after the adjusted 22% decrease in 2011, the state will need to appropriate another $140 million. Otherwise, the rates will go back up and businesses will continue to suffer. SCMA is actively lobbying the General Assembly for the necessary additional funding next year.
POLLUTION CONTROL ACT
A recent South Carolina Supreme Court decision has caught the att enti on of the regulated business community in South Carolina. In
Georgetown County League of Women Voters v. Smith Land Company, Inc, the company sought a permit to fill less than 2/10 of an acre of an isolated wetland from the SC Dept. of Health and Environmental Control and the US Army Corps of Engineers. Neither agency had a regulatory program requiring a permit to fill the isolated wetland, so the company moved forward with their project. The Supreme Court held that a permit from SCDHEC was required and found two major holdings:
- Any and all discharges or emissions into the environment require a DHEC permit;
- Every citizen has the right to sue any other citizen for having such a permit.
SCMA is working with other business organizations and individual companies to fix this ruling by pursuing legislation to reverse the court’s ruling.
WORKFORCE DEVELOPMENT
SCMA is working with the South Carolina Department of Commerce and the Governor Nikki Haley’s office on an
initiative to strengthen the State’s workforce education and training infrastructure.
STATE BUDGET
It is an SCMA priority to support the state funding of the South Carolina Department of Commerce and the South Carolina Technical Schools. Key programs and budget items include the Center for Accelerated Technology Training and its readySC™ program and the Department of Commerce’s Closing Fund.
History