City proposes some nonprofits pay business license fees

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The city of Columbia is moving forward with a plan to charge business license fees to hospitals, other nonprofits and their subsidiaries who offer services that compete with for-profit businesses.

[City councilman Moe] Baddourah noted that 65 percent of property in the city is tax exempt. That is because of the preponderance of state government buildings, USC’s campus, Fort Jackson and property owned by churches, schools and charities in the city. As a result, only 35 percent of property owners foot the bill for the vast majority of city services like fire and police protection, he said.

“That’s just not fair,” Baddourah said.

Columbia City Council on Tuesday gave initial approval to the measure. The vote was 6-1, with Mayor Steve Benjamin voting no. Benjamin could not be reached for comment Thursday.

It will take a second vote for the measure, which is expected to raise $2 million to $4 million annually, to become city policy.

Under the proposal, businesses that have a 501(c) tax status from the IRS — but otherwise operate as a profitable company — would begin paying business license fees like the rest of the city’s businesses. Baddourah first made the proposal in 2015.

Charities and places of worship would remain exempt from business license fees unless they rent out space as an event venue or sell food, Baddourah said.

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