Carlos Phillips

864-242-1050

www.greenvillechamber.org

How the 2021 Legislative Session Impacts Small Business

By Jason Zacher

SVP, Business Advocacy, Greenville Chamber

The General Assembly wrapped up the 2021 Legislative Session on May 13, the the Greenville Chamber scored a number of key victories for small businesses that should be on your radar screen. We’ll outline two of them here.

The Chamber’s top priority for small businesses this year was S. 147, the Covid Liability bill. This legislation provides temporary, targeted, and common-sense liability protections for businesses in responding to Covid-19. The General Assembly understood that providing businesses with reasonable protections from the risk and expense of lawsuits related to actual, alleged, or feared contraction of the Coronavirus would help in our state’s economic recovery.

A coalition of business groups were successful in extending a safe harbor for businesses provided the business is operating “consistently with applicable public health guidance.” Businesses are protected unless they engage in “reckless or intentional conduct” that must be proven with “clear and convincing” evidence for most businesses.

With mask guidance and other advice changing in early May because of the prevalence of vaccines, we encourage businesses to review the DHEC and CDC guidance on their respective websites, instead of following media reports. Recent public interviews have not always reflected published guidance. We recommend you speak with an attorney to ensure you remain covered until the pandemic is declared over.

One major tax change was the passage of S. 627 that allows S-corporations, partnerships and LLCs to deduct state income taxes from their federal tax returns. This legislation is a meaningful win for small business owners.

Many business owners remember that the 2017 Tax Cuts and Jobs Act imposed a $10,000 cap on the amount of state and local taxes South Carolina taxpayers may deduct on their federal returns. This cap hurt small employers organized as pass-through entities that pay federal taxes on business profits on their personal tax returns. That change put many Main Street employers at a major disadvantage compared to C-corporations who were still able to deduct full state and local tax payments.

Last November, the IRS announced that state taxes on business income imposed at the entity level on pass-through entities are permitted as a deduction. Several states quickly passed laws to bring their state laws into alignment. Now that Gov. McMaster has signed S. 627 into law it: provides these businesses the option to pay their state and local taxes at the entity level; includes an income exemption, so that owners of businesses making the election are not subject to double taxation; eliminates burdensome withholding requirements for non-resident shareholders and LLC members, and provides South Carolina business owners with a credit for business taxes paid to other states that have adopted similar SALT Parity reforms.

Pass-through businesses are the backbone of our state’s economy and many have been hit hard by the Covid-19 pandemic. This legislation will help our smallest businesses reduce their federal tax burden and keep revenue in our state.  

You can find out more about these bills and the other business community victories in our legislative report at www.upstatechamber.org.

Small Business Resource List

BBB of Upstate SC

Bbb.org/local-bbb/bbb-of-upstate-south-carolina

864-242-5052

Charleston Digital Corridor

charlestondigitalcorridor.com

843.607.1264

Charleston SCORE

chalestonsc.score.org

843.727.4778

City of Greenville

Greenvillesc.gov

864-232-2273

CommunityWorks

Communityworkscarolina.org

864-235-6331

CommunityWorks Women’s Business Center

Communityworkscarolina.org/womens-business-center

864-235-6331

Grand Strand SCORE

grandstrand.score.org

843.918079

Greenville County

Greenvillecounty.org

864-467-7100

Greenville Area Small Business Development Center

Scsbdc.com