The SC REALTORS Association has launched a campaign to end the point of sale tax>

2006 LAW FORCED PROPERTIES TO BE ASSESSED AT SALE PRICE, NOT FAIR MARKET VALUE

As I noted last week in my opening day rundown of the 2010 session of the South Carolina General Assembly, one of the most contentious issues currently facing lawmakers in Columbia is the “point of sale” tax.

And the debate is only likely to intensify in the coming weeks and months.

One of the most vocal critics of the current tax — which was passed in 2006 as a failed attempt to lower taxes by unfairly assessing property taxes based on the most recent sale price and capping tax increases to 15 percent of that assessment every five years — has launched a new effort to repeal point of sale.

The South Carolina REALTORS Association on Monday unveiled a statewide media campaign to raise public awareness about a bill currently before lawmakers that would correct the inequity in the 2006 law by assessing property tax at fair market value, not sale price.

“The point of sale tax is hurting our economy and is clearly unfair,” said SC REALTORS CEO Nick Kremydas. “For months we’ve been talking to lawmakers and local governments, telling them that the point of sale law is flawed and is straining South Carolina families and businesses, including REALTORS. We’re taking our message directly to South Carolinians so they are informed about the current point of sale tax, and why we need to change it now.”

Dubbed the “Unfair Tax,” the REALTOR’s campaign claims that South Carolina’s point of sale law allows local governments to dramatically increase property taxes on homes, land and businesses when they are sold.

What happens is that new homeowners are forced to pay higher taxes than their neighbors, despite having a property of similar fair market value. And in the midst of a subprime mortgage crisis, when home sales are already in significant decline, that kind of tax structure is a recipe for disaster.

But the impact on business is worse.

“Because of the unfair point of sale tax, some companies have said they will not relocate or open new businesses in South Carolina, taking their jobs to other states, and in a tough economy the last thing we need are taxes that eliminate jobs and prevent new businesses from opening,” Kremydas said. “Families across South Carolina are struggling to pay their bills and hold onto their jobs, and local governments want more. Local governments should find ways to encourage job creation — and improve efficiencies— instead of supporting a tax that punishes businesses looking to bring jobs to the state.”

Keep in mind that South Carolina has the fourth highest unemployment rate in the country, a record 12.3 percent.

The REALTORS said their campaign will include traditional and new media advertising — including an interactive Web site at ItsJustNotFair.org. A copy of the campaign’s first TV advertisement is available by clicking here.