February 17, 2026

SC House Greenlights Small Business Tax Relief

Charleston, SC, February 17, 2026

The South Carolina House of Representatives has unanimously passed House Bill 5006, aimed at providing property tax relief for small businesses. This initiative seeks to exempt the first $10,000 of depreciated business personal property from taxation, benefiting around 98% of small businesses in the state. The move is intended to support local entrepreneurs, boost two-way economic growth, and lower regulatory burdens for small enterprises.

Charleston, SC

SC House Greenlights Small Business Tax Relief

The South Carolina House of Representatives has taken a significant step towards fostering a more supportive economic environment for the state’s entrepreneurs, unanimously passing a bill aimed at cutting property taxes for small businesses. This legislative move, widely anticipated by the business community, underscores a commitment to easing the burdens on the backbone of the local and state economy.

For Charleston’s vibrant community of small businesses and aspiring South Carolina entrepreneurs, this development signals a renewed focus on allowing them to reinvest in their operations, expand their teams, and continue driving the Lowcountry economic growth. The initiative reflects a broader understanding that reducing regulatory and tax complexities can unleash entrepreneurial innovation, leading to greater prosperity for all.

Understanding House Bill 5006: The “Small Business Tax Cut of 2026”

Known as House Bill 5006, or the State of South Carolina Small Business Tax Cut of 2026, this legislation seeks to provide tangible financial relief to enterprises across the state. The core of the bill involves exempting the first $10,000 of a small business’s net depreciated business personal property from taxation. This category of property typically includes essential items like office furniture, computers, and equipment necessary for daily operations. Under the current system, businesses often pay sales tax when acquiring these assets and then face recurring property taxes on them year after year.

A notable benefit of House Bill 5006 is its potential to entirely eliminate the business personal property tax liability for the smallest businesses. Those with less than $10,000 in taxable property would not only be freed from this tax but also from the associated filing requirements, significantly reducing administrative overhead. This measure is designed to impact approximately 98% of small businesses in the state.

Defining “Small Business” for the New Exemption

To qualify for this tax exemption, a business must meet specific criteria designed to ensure the relief targets genuinely small and local enterprises. According to the bill, an eligible small business in South Carolina must be independently owned and operated, employ fewer than 100 individuals, and generate less than $10 million in annual sales. Additionally, the business must be registered, incorporated, and headquartered within South Carolina, with ownership by state residents who pay income taxes in the state. This clear definition ensures that the benefits of reduced regulation are channeled effectively to the local Charleston SC business landscape and beyond.

Enhancing Competitiveness and Easing Burdens for South Carolina Entrepreneurs

The sentiment behind this legislation is rooted in a desire to reduce the regulatory friction that often impedes small-business resilience. Proponents argue that the current system of taxing business personal property creates an “unnecessary burden” for small businesses, which often lack the extensive administrative infrastructure of larger corporations to manage complex tax filings.

Furthermore, the bill aims to address what many business owners perceive as a “double tax” – paying sales tax on equipment purchases and then an annual property tax on the same items. This double taxation has been identified as a factor that discourages investment and hinders job creation. By simplifying filing requirements and exempting the initial $10,000 of business personal property, the bill seeks to reduce compliance costs and enhance South Carolina’s competitive standing compared to neighboring Southeastern states that offer more significant tax relief. Support for the bill has been widespread, with the South Carolina Manufacturers and Commerce (SCMC) and 24 local Chambers of Commerce, including the Charleston Metro Chamber of Commerce, expressing unified support. The National Federation of Independent Business (NFIB) also thanked the House for its passage, noting that 96% of its members support such reform.

Potential Fiscal Impacts on Local Charleston County Economy

While the benefits for small businesses are clear, the legislation also presents potential fiscal adjustments for local governments. A state-level fiscal impact study estimated that counties across South Carolina could collectively experience a loss of approximately $9 million in tax revenue. Business personal property taxes are typically allocated to counties to fund vital public services, including schools and infrastructure.

In response to this potential revenue shift, some counties, such as Richland County, have indicated they might need to consider increasing millage rates to offset the impact. However, bill sponsor Representative Brandon Newton highlighted that the legislation was crafted in collaboration with counties to minimize the impact on local governments, specifically targeting smaller businesses so as not to significantly affect larger corporations for whom this tax is often considered a “rounding error”. Beyond the property tax cut, the legislation also includes a provision to reduce the corporate license fee for certain South Carolina-based corporations, a change estimated to decrease general fund revenue by nearly $1.7 million annually once fully implemented.

Looking Ahead: Supporting Lowcountry Economic Growth

As House Bill 5006 progresses to the Senate, its potential to further stimulate the Charleston County economy and empower Charleston small business owners remains a key point of discussion. The focus on entrepreneurial innovation and reducing governmental friction aligns with a philosophy that trusts individuals and businesses to drive prosperity when given the opportunity. The passage of this bill by the House is a testament to the ongoing efforts to create a more dynamic and less burdensome environment for those who invest their time, talent, and capital into building our communities.

We encourage all Charlestonians to stay informed about legislative developments that shape our economic future and to continue supporting the local businesses that contribute so much to the unique character and vitality of the Lowcountry.

Frequently Asked Questions (FAQ)

What is House Bill 5006?

House Bill 5006, also known as the State of South Carolina Small Business Tax Cut of 2026, is a state-level bill that aims to provide tax relief to small businesses by exempting the first $10,000 of their net depreciated business personal property from taxation.

What kind of property does this exemption cover?

The exemption covers business personal property, which includes items essential for business operations such as chairs, computers, equipment, office furniture, and fixtures.

How will this bill benefit small businesses?

The bill will reduce the tax burden on small businesses, potentially eliminating the business personal property tax entirely for those with less than $10,000 in taxable property. It also simplifies filing requirements, reduces compliance costs, and aims to encourage investment and job creation by addressing the “double tax” on purchased equipment.

What criteria must a business meet to qualify as a “small business” under this bill?

To qualify for this state-level exemption, a business must be independently owned and operated, employ fewer than 100 people, and have less than $10 million in annual sales. It must also be registered, incorporated, and headquartered in South Carolina, with ownership by state residents who pay income taxes in the state.

What is the current status of House Bill 5006?

House Bill 5006 has been unanimously approved by the South Carolina House of Representatives and now moves to the Senate for approval before it can be sent to the Governor’s desk.

What are the potential impacts on county revenues?

A state-level fiscal impact study estimated that counties across South Carolina could lose a combined total of approximately $9 million in tax revenue, as business personal property taxes contribute to local public services. Some counties may consider increasing millage rates to offset this loss.

Key Features of SC Small Business Property Tax Cut (H. 5006)

Feature	Description	Scope
Bill Name	House Bill 5006 (State of South Carolina Small Business Tax Cut of 2026)	State-level
Primary Provision	Exempts the first $10,000 of net depreciated business personal property from taxation.	State-level
Property Covered	Business equipment, furniture, computers, and fixtures.	State-level
Qualifying Small Business Criteria	Independently owned/operated, < 100 employees, < $10M annual sales, SC-registered/headquartered, SC-resident owned.	State-level
Impact on Smallest Businesses	Businesses with < $10,000 taxable property pay no tax and have no filing requirements.	State-level
Current Status	Unanimously approved by SC House, now heads to Senate.	State-level
Estimated County Revenue Loss	Approximately $9 million statewide.	State-level
Corporate License Fee Cut	Reduces corporate license fee for certain SC-based corporations (estimated $1.7M annual general fund revenue reduction).	State-level