South Carolina has enacted a new tax law that exempts the first $10,000 of business personal property from taxation for qualifying small businesses, effective July 1, 2026. The exemption applies to independent businesses with fewer than 100 full-time employees or annual gross sales below $10 million, according to the legislation signed into law.
Business personal property tax has long been a burden for small business owners. Unlike sales tax or property taxes on buildings, this annual tax applies to everyday items businesses use in operations, including desks, computers, copiers, and machinery. Businesses must report and pay taxes on these items every year for as long as they own them.
Rep. Brandon Newton, R-Lancaster and Kershaw, described the tax as uniquely frustrating for business owners. “Business personal property taxes is what I call the most aggravating tax that businesses pay, because unlike all the other taxes that people realize, business personal property is a yearly property tax, not on a vehicle or building, but on a desk, a computer, a copier, the machinery in their business,” Newton said, according to reporting on the legislation.
The exemption will provide relief as small businesses face ongoing financial pressures. Dr. Joseph Von Nessen, a research economist with the University of South Carolina’s Darla Moore School of Business, noted that small businesses typically face greater financial constraints than larger firms. “They typically have more financial constraints relative to businesses on average, and so in a climate where we see high inflation, as we have over the last several years, that means that small businesses may not be able to absorb those costs as easily,” Von Nessen said.
Supporters of the tax cut argued that the exemption would allow small business owners to reinvest savings into growth, hiring, or wage increases. Kelly Tabor, owner of Good for the Sole in Columbia’s Five Points district, emphasized the multiple roles small business owners juggle while managing inflation. “Most people don’t realize that we wear many hats. So I’m the janitor, accounts receivable, accounts payable, I’m also doing all the ordering, and any number of things that have to go on during the day just to keep my business going,” Tabor said.
According to a fiscal impact study, counties across South Carolina are expected to lose approximately $9 million in revenue as a result of the exemption. Lawmakers worked with the South Carolina Association of Counties to balance relief for small businesses with the impact on local government funding. The exemption represents a compromise between business owners seeking relief and county officials concerned about revenue loss.
Sources
- WLTX News — Reporting on the exemption’s details, eligibility requirements, effectiveness date of July 1, 2026, and impact on county revenue
- South Carolina Legislature — Official bill text and legislative information for H.5006
- NFIB — Details on the $10,000 exemption for net depreciated value of business personal property and small business eligibility criteria
- South Carolina Policy Council — Information on business owner arguments for the tax relief and the exemption amount
- Bloomberg Tax — Confirmation of the June 2026 enactment and exemption details
