South Carolina Business Law Blog

The South Carolina Supreme Court recently considered the limited liability company (LLC) as a "disregarded entity" for tax purposes. In CRFE v. Greenville County Assessor issued on August 29th, the Court determined that S.C. Code Ann. Section 12-43-220(c) does not prevent a single-member limited liability company (LLC) owning residential property from obtaining the 4% legal residence property tax ratio. Sherry Ray bought residential property in Greenville County in her name and lived there, and as a result the property was taxed at the 4% legal residence ratio. She formed CFRE as a single-member LLC with herself as the sole member. (She did not have the LLC taxed as a corporation, and CFRE did no business and was formed only for asset protection/estate planning purposes). In 2006 Ray transferred title to her residence into the LLC. Because that transfer is considered an "assessable transfer of interest" per S.C. Code Ann. Section 12-37-3150 , the Assessor

On June 14th, Governor Haley signed into law H 3713 . Dubbed the “point of sale bill,” the legislation limits increases in the fair market value of commercial property brought about by assessable transfers of interest. When commercial property (all real property other than that used as the primary residence and for manufacturing) undergoes an assessable transfer of interest (as defined in S.C. Code Ann. § 12-37-3140 ) after 2010, and its assessable transfer of interest (ATI) fair market value is greater than the current fair market value on the books of the property tax assessor, then the excess amount (up to twenty-five percent of the transaction fair market value) is exempted from property tax. The exemption value (the transaction fair market value less the exemption) cannot be any less than the current fair market value, and in the event the transaction market value is less than the current fair market value, then the transaction market value applies. Examples : If commerci