Hello REALTORS®,
Each year, at this time of year, local governments step up enforcement of their business license ordinances. Many hire consultants who search online data to identify businesses that aren’t in compliance. However, a real estate sign is a good indicator that a Realtor is doing business in the area.
Most cities in South Carolina require a business license to conduct business in their city. Nearly all of them impose a business license tax as well. The tax is not insignificant. In fact, most cities receive a substantial portion of their revenue, sometimes as high as 30%, from business license taxes.
Some counties require a business license as well, but only eight impose a business license tax—none in the Western Upstate. Counties that require a business license do so primarily so they can revoke it if a business is misbehaving, not to raise revenue.
What the law says (and how it helps Realtors)
Business licenses and taxes are allowed under state law, but local ordinances also must comply with state law. That law was updated in 2022 by legislation that your REALTORS® Association supported.
Under that legislation, the business license tax for a real estate brokerage is paid only by the broker, not the broker’s agents. In addition, the broker pays the tax only on the revenue they keep, not the total revenue of the brokerage. Therefore, if a broker collects and passes through revenue to another business, that revenue belongs to the other business and is not subject to tax.
There are two more important points to know about business license taxes:
- If your business is located where business license taxes are not collected, you may still be required to pay business license taxes in a city or county that collects the tax if you do business there. However, you will only be taxed on the revenue you receive doing business in that city.
- If you do business where business license taxes are collected, you may be required by that city to pay the business license tax on the full revenue of your business. However, if a portion of your business’ revenue was taxed by another city, you can exempt that revenue from the tax you pay where your business is located. In other words, two cities can’t tax the same revenue.
This demonstrates the importance of keeping detailed records of your business’ revenue if you are doing business in multiple cities or collecting revenue for another broker.
It’s also important to note that if you are doing business in a city that requires a business license, you should get a business license and pay any relevant taxes. If you don’t, you should expect to receive a demand letter from the city. Posting a real estate sign or advertising a listing online are visible evidence that you are doing business in a city and easily checked by city officials.
Anderson City Council Elections are April 7
The City of Anderson is one of many cities that don’t hold their elections in November. This year, their elections are on April 7. The mayor and five members of city council are on the ballot including a special election to fill an unexpired term. These are the candidates who have filed to run:
Mayor: Mayor Terence Roberts and Van Sullivan Jr.
Dist. 1: Councilman Kyle Newton
Dist. 2: (special election) Marshall Pickens III
Dist. 3: Councilman Jeff Roberts
Dist. 5: Darryl Thompson and Tonya Winbush
Dist. 7: Councilman Matt Harbin
Councilwoman Beatrice Thompson is retiring from her district 5 seat after 50 years. And former councilman Louis Martinez resigned from his district 2 seat on December 31.
How can you help?
Advocacy is an important part of the way your Realtors Association represents Realtors. There are two important ways you can help:
- Vote
- Contribute to RPAC
RPAC is an important part of our association’s advocacy efforts. Success hinges on the election of Realtor Champions. My favorite quote, at least recently, is that there are two kinds of politicians, those who raise money, and those who lose.
RPAC’s objective is to cooperate as an association to raise money for the campaigns of candidates who will champion Realtor issues. If you haven’t already contributed to RPAC, click here to contribute. Any amount will help.