Point of sale reform is key to fixing property tax system

By Robert Woodul
Tuesday, March 22, 2011

South Carolina's future is dependent on the ability to remain competitive in the global marketplace. Unfortunately, our property tax system is hindering the state's ability to create a truly business-friendly environment. Our tax rate on commercial and industrial businesses is entirely too high, and the time in which we assess properties is putting unnecessary strain on the commercial, second home and residential investment real estate markets as well as creating an inequitable tax structure among primary residential properties.

The facts are indisputable. Point of sale assessment results in disparate property tax burdens between neighboring properties, higher office and store rental costs for South Carolina businesses, higher rents for non-homeowners, increased priceing on the goods and services South Carolinians enjoy, disincentives to transfer property, inequitable tax burdens based on whether a property has transferred, and property devaluation. All of this forces businesses looking to put roots down in South Carolina to take their investment and jobs elsewhere. We need to focus our efforts on removing economic burdens to make our state more attractive to companies who wish to invest in South Carolina — companies who will bring economic stability and jobs to our state.

In just one example of the many challenges commercial Realtors and appraisers have faced as a result of these inequities: an industrial complex on 80 acres had one million square feet of space in the Charleston area. At the last assessment in 2003, the property was assessed at $18 million with a property tax bill of $525,000. In 2007, the property sold for $54.5 million with a new property tax bill of $1.6 million — that's more than a million dollars of a tax increase — in fact, 205 percent.

It was unlike normal reassessments as the millage did not get rolled back to equalize, but nstead created a $1.05 million windfall that did nothing but line the pockets of local governments on the back of a business owner. The new property tax bill reflected a $1 per square foot per year increase. The complex's largest tenant of 330,000 square feet had a rent increase of $27,500 per month because of the new tax bill. Another tenant of 125,000 square feet saw a monthly rent increase of $10,417. Within two years of purchase, the largest tenant moved out, and now the property is listed as a distressed sale and faces possible foreclosure. This is happening to property owners across the state, and it cannot be allowed to continue.

Addressing point of sale is paramount to attracting commercial investment and job creation in South Carolina. Realtors thank Rep. Jim Merrill and Sen. Paul Campbell for respectively introducing legislation as a starting point in their respective chambers and we will continue to work with the stakeholders to make sure we're creating a favorable environment for job creation and economic development in South Carolina.

Commercial and residential investment spurs job growth, consumer spending, employment, economic mobility and broadening of the tax base. In turn, revenue to local governments and schools will grow as well.

Those opposed to lowering property taxes cannot see the immediate economic expansion that H.3713 will foster, and create more revenue for the counties, cities and school districts as the economy rebounds.

Together, we can put South Carolina back on the path to economic growth. By passing H.3713, the General Assembly will send the clear message to citizens and business owners in South Carolina and beyond that our state is ready to compete in the global marketplace.

Robert Woodul is president of the Charleston Trident Association of Realtors.

Realtors want to improve economy

By Sabra McNeil
Saturday, Mar. 19, 2011

In response to Dick Withington letter of March 11, "Real estate taxes unfair at core"

As a Myrtle Beach Realtor and a retired physician, I have seen both of my careers undergo major changes in the past several years. The reasons for both are multifactor, and little is to be gained by aerobic finger pointing.

I can assure you that the Realtors' interest in point of sale is to support meaningful reform to the state's taxation system that will enhance economic and business growth opportunities. It is no more complicated than that.

You would have benefited greatly from contacting the Coastal Carolinas Association of Realtors and chatting with Steven Neeves, our governmental administrative director, or Ernie Derrick, the chairman of our Legislative Committee, or checking out on our website (www.ccarsc.org) before launching such a personal, inaccurate and inappropriate tirade against area Realtors.

You implore that Realtors "...stop whining and trying to be tax lawyers and economists" and then you use your entire article to do just that: using half truths, misinterpreted statistics and misplaced anger to revamp the tax code to your perception of fairness.

We are all partners in the rebuilding of our community. We cannot afford to alienate each other or misuse valuable print opportunities that might circumvent our common goals.

To continue your boat metaphor, where you stated "...if you can afford the boat, don't whine about the dock fees," just remember: A rising tide lifts all boats.

The writer, a member of the board of directors for the Coastal Carolina Association of Realtors, lives in Myrtle Beach.

South Carolina Realtors

Point of sale reform is key to fixing property tax system

Realtors want to improve economy

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