Subcommittee advances bill to raise manufacturing property tax-exemption cap to $300 million

A legislative subcommittee gave a favorable report to Senate Bill 439, which would increase the annual reimbursement cap for the state manufacturing property tax exemption from $170,000,000 to $300,000,000 and make that change effective for tax year 2024 and forward. The subcommittee voted 3–0 to report the bill favorably.

"This bill would just simply put that fix into permanent law, increase the cap from $170,000,000 to $300,000,000 and ensure that our manufacturers don't see any unexpected tax hike," said Will Frierson, vice president of government affairs for South Carolina Manufacturers and Commerce. Frierson told the panel the change formalizes a budget proviso enacted last year and provides certainty for job-creating manufacturers, especially small and midsize firms that do not have fee-in-lieu agreements.

Staff explained the bill preserves the existing exemption rate (the staff summary included the 42.8571% exemption figure) and said the exemption would not apply to public utilities regulated by the Public Service Commission. The bill also stipulates that any monies refunded or credited under the provision must be used to reduce customer rates and requires revenue losses to political subdivisions from the higher cap to be offset by the trust fund for tax relief.

A subcommittee member noted the mechanical effect of the increase: although the cap would rise by $130,000,000 on paper, staff projected only about $66,000,000 in additional cost in the short term. No amendments were offered during the hearing.

By roll call, Representatives Collins, Moss and Hyatt recorded aye votes and the bill received a favorable report.

The subcommittee did not set a floor or committee calendar date during the session; the bill will move to subsequent committee processes per the legislature's schedule.