Haley signs bill to give military homeowners in SC tax break

03/13/2014 1:49 PM

03/13/2014 1:50 PM

South Carolina Gov. Nikki Haley has signed into law a bill designed to give military homeowners a tax break on homes they couldn’t sell before being deployed.

Haley signed the bill Thursday.

The law allows military homeowners to pay the owner-occupied property tax rate of 4 percent instead of the 6 percent rental rate. Service members can continue topay the lower rate as long as they remain on active duty and advertise the home for sale within 30 days of purchasing a second home.

The law is intended to ease the burden on deployed service members and reduce the risk of foreclosures.

“Our military men and women are one of our state’s biggest assets, and it’s only right that we provided them with the kind of common sense tax relief that works to lessen the burden of their service for them and their families,” Haley said in a press release.

The bill, sponsored by state Sen. Murrell Smith, R-Sumter, is one of 10 military friendly initiatives tracked by the Department of Defense. A state’s passage of the bills could figure into its military quality of life scores in any upcoming base realignments and closures.

“This is one piece of our strategy to make South Carolina the most military-friendly state in the region,” Smith said in the release. “Maintaining strong communities means that service members should never have to worry about losing their home to a tax bill.”

With the war in Iraq over and direct U.S. military involvement in Afghanistan set to end in December, the military is bracing for big cutbacks.

The Pentagon faces $500 billion in across-the-board cuts over the next 10 years. Those cuts, part of the $1.2 trillion in overall "sequester" cuts – half to the military, half to domestic spending – were mandated after the August 2012 debt-ceiling debacle.

The cuts come on top of $487 billion in reductions already targeted for the Pentagon. Together, the cuts equal about 18 percent of the 2012 defense budget.

It is doubtful that the Pentagon can make those numbers by furloughing civilian workers, grounding flyovers and limiting training alone – measures it periodically put in last year. Instead, to make the budget cuts, the military likely will ask Congress for permission to conduct another round of base closings, which could occur as soon as next year.

South Carolina will have a lot at stake. The military pumps $15.7 billion annually into the state‘s economy.

The state has four major military communities – Columbia, Sumter, Charleston and Beaufort – a large National Guard presence statewide, more than 50,000 military retirees and a substantial number of defense contractors, many clustered in the Upstate.

The new law brings to six the number of defense department initiatives adopted in the Palmetto State, which is in a competition regionally and nationally with other states for retention of bases and missions.

Virginia leads nearby states on the checklist, having made significant progress on seven of the 10 laws, according to Defense. Florida has passed or is near passage on six. North Carolina and Georgia so far have passed five each.

Among the bills still in the Legislature are an initiative to form veterans’ courts, which understand the impacts on a returning service of afflictions such as post traumatic stress syndrome and traumatic brain injury. It is presently being blocked in the Senate.

Bill Bethea is a Bluffton attorney who heads the S.C. Military Base Task Force, which was appointed by Gov. Nikki Haley to protect and enhance the state’s installations and missions. He said the passage of the property tax bill and other initiatives will help the state’s standing as the military shrinks after the wars in Iraq and Afghanistan.

“Anything we can do to level the playing field for those who serve our country and are disadvantaged by it will stand us in good stead,” he said.

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