"Candidates split on ending corporate income tax"

Burnie Maybank offers The State newspaper insight into the impact of gubernatorial candidate tax plans in an article entitled "Candidates split on ending corporate income tax:  Haley wants to end it, Sheheen doesn't; experts divided."

The article appeared in paper's September 12th edition and reads in part:

"The issue is important because the Republican nominee for governor, Nikki Haley, has proposed eliminating the corporate tax, saying the move would help attract new jobs to the state.

Her Democratic opponent, Vincent Sheheen, opposes eliminating the tax, saying to do so would punish small, S.C.-based businesses by making them less competitive with larger corporations, many headquartered out of state, that would see their taxes drop."

Maybank told the paper that South Carolina has the lowest corporate income tax rate in the Southeast and only charges corporate income tax on sales in South Carolina, meaning that many companies pay taxes on only a fraction of the total income.

What's more, Maybank believes eliminating the corporate income tax would mean a loss of much more than the $150 million the state collected last year because "because partnerships, limited liability corporations and 'S' corporations – which usually report business income on their owners’ individual income taxes – could convert to 'C' corporations to eliminate their income tax burden altogether."

“The true revenue impact is much higher than currently estimated. For some of them, there could be tax-free incorporations. Generally, it’s not too difficult to convert,” said Maybank.  Read more here.

Burnie Maybank is a member of Nexsen Pruet's economic development and financial services groups.  He was Director of the South Carolina Department of Revenue from 1995 to 1999 and 2003 to 2005.