HOME | Contact Editor | Add Comment | Forum | Directory | Search | Advertise | Tell-a-Friend
October 25, 2006 | South Carolina Headlines


Join us in
South Carolina Headlines

Sign up today to take part in the forums, interact with the content, receive South Carolina Headlines newsletters, display current weather conditions in your area, and more.

Already a member?



The Common Voice
Where you help make the national headlines!
Visit our Advertisers!


Author (last 7 days)


 :: Jonathan Pait
 :: Benj Buck

 :: Jimmy Moore
Press Releases

 :: List All

Want to be a columnist? Contact the editor to learn how.

A Tax Is a Tax By Any Other Name
Jonathan Pait
September 4, 2002

Part II of Dulling Ben's Pitchfork

So, why isn't a fee a tax?

Here is how it works. A company wishes to build a manufacturing plant in South Carolina. The State evaluates the company according to an established set of criteria. Some is quantitative, such as a minimum five million dollar investment. Other considerations (environmental impact, wages, potential job creation) also enter into the picture. If the company remains attractive after this point, the county in which the company has expressed interest may then offer the inducement of fees in lieu of taxes.

First the county has to acquire the property on which the manufacturing plant will be built. This is at the center of the fee in lieu of taxes option. The county then leases the property to the business for a fee. If the business does not hold the title to the property, then it cannot be taxed.

In many ways it is like a person renting an apartment. He gets to access his apartment and even call it home. However, he does not own the property and therefore does not pay property taxes. The occupant does pay a "usage fee" that we call rent. It is up to the owner of the units to pay the property taxes. So, what if the owner is the government? In that case, the rent becomes the "usage fee" or tax.

This particular fee is calculated to equal the amount that would come in using the traditional taxing scheme. However, the advantage is that the law allows the counties to adjust their "rent" though it will not allow them to adjust their tax rates. This helps get our State from behind the eight ball. It certainly doesn't give us a competitive advantage--but it does give us a better angle to the pocket.

It is a pity that we have to use trick pool to play the game. Even when we do manage a decent shot there are people ready to complain that we didn't knock in three balls on one strike. During some recent attempts to use the system, the school board complained that by using fees instead of taxes we would be losing money for education. I am reminded of the story of the monkey who gets his hand stuck in the jar trying to grab too many nuts. In the end, he gets nothing.

If Mercedes is looking at Alabama and South Carolina as possible locations for a plant, do you not think property taxes will factor into that decision? If Alabama gives a 3% rate and South Carolina comes in at 10%, what chance do you really think we will have? By law, we cannot offer less than 4% (fee equivalent to tax). We have to count on our other positives to win.

For the sake of argument, let's say that we win out. Guess what? The school board could easily be looking at millions of dollars in new revenue. Now, let's say we follow ol' Pitchfork's lead and stick that nasty old "big business" with a 10% property tax rate. "It's our way or the highway, Mercedes." I can hear the "See ya'" as Mercedes drives down I 85 to Huntsville.

Post a comment for this column

You must be logged in to participate. You may use the MyVoice! area at the top of this page to log in, or you may set up a new account.


Use the partisanometer to put this columnist in his place - liberal or conservative? Just click left or right. First, you'll need to sign on.

Join in the fun! Sign on and give your rating on the partisanometer.


Join in the fun! Sign on and give this article a thumbs down or a thumbs up.


Refer Column

Refer this column to a friend. Highlight the fields below, fill them out and press "Send."



Send your comment to the author of this column.


This column has no comments. If you would like to make a comment, go here.

Site Stuff

Sessions: 814830
Members: 829

  South Carolina Headlines
Made possible by The Worthwhile Company, Inc.