Property owners should have a better picture on tax relief by the end of the week as the House of Representatives debates a proposal to add 2 percent to the state sales tax.

Property owners in Beaufort County have been calling for reforms since a 2004 reassessment showed property values more than five times what they were during the 1998 reassessment.

Under the House bills owner-occupied homes would be exempt from local property taxes for anything but debt payments, leaving the county, municipalities, school district and other public service districts to be largely funded by the increase in the state's sales tax from 5 percent to 7 percent.

If approved, the property tax exemption would be put to voters in a November ballot. The increase in the sales tax would be a procedural measure that would follow that approval.

Legislators have given the bills various degrees of support, but most are looking for alterations before a House vote.

Rep. Richard Chalk, R-Hilton Head Island, a member of the ad hoc committee that vetted the bill, said he's one of several House members with concerns but that election year politics may improve the bill's chances for success.

"There are a lot of people scared to vote against it," he said.

Rep. Catherine Ceips, R-Beaufort, said she supports the bill; Chalk and Rep. Bill Herbkersman, R-Bluffton, said they had some concerns about the details of the plan; Rep. Kenneth Hodges, D-Bennetts Point, said he would prefer a slimmed down version; and Rep. Thayer River, D-Ridgeland, said he opposes the bill, considering it tax relief on the backs of average taxpayers.

Although the bill would bring dramatic reductions in property taxes for many homeowners, the changes provide deeper cuts for more expensive homes.

For example, on Lady's Island a property tax bill on a $100,000 home would be reduced by 73 percent from $395 to $103. But the taxes on a $500,000 home would drop 83 percent, from $3,218 to $516.

Even if a majority of the House supports the 2 percent measure, it will move to a Senate chamber where talks on property tax reform have been moving much slower.

A Senate version stretches the tax benefits beyond owner-occupied homes, but limits the relief to property taxes for school operations. A Senate subcommittee is debating that proposal.

Sticking points

As decisions near, detractors are raising opposition on several issues, including distribution inequities and the impact on business and recruiting new industries.

"It would have been better if the progress (on the bill) would have slowed down to see how the changes would impact businesses and local communities," Hodges said Friday.

Expected statewide distributions would match local budgets dollar for dollar in 2007, then raising allocations based on population increases. But the specifics on how increases would be measured and what other factors might be considered has not been determined.

Beaufort Mayor Bill Rauch said he's cautious about a state system that sends the tax revenues to Columbia as municipalities' way to get their share back.

"When you send money up, some times 100 percent doesn't come back," he said.

Coastal legislators are worried the measure does not take into account tourists that fill roads and stress local services that wouldn't be included in per-capita funding.

The S.C. Chamber of Commerce also is criticizing the plan, noting that the House proposal provides no property tax relief for businesses, even though they will still bear increased costs with a higher sales tax.

"This would exacerbate an already significant business tax burden," said Kristine Hartvigsen, spokeswoman for the chamber.

The sales tax increase also would distance South Carolina from the sales tax in Georgia and North Carolina, both less than 5 percent, possibly sending shoppers in Beaufort and Jasper counties across the border to Savannah.

Better chances

Democrats have said they're likely to propose a reduced bill this week that would increase the sales tax by 1 percent and only pay for school operations. Hodges said he would prefer that option because it would mean less of an impact on the average citizen.

While the sales tax measure may be slimmed or eliminated from the 2006 reform plans, legislators said they are hopeful the elimination of sales tax on groceries would receive approval. That measure was inserted in the sales tax plan as a concession to middle- and low-income homeowners and renters that may see little or no benefit from the reforms.

"We must take the sales tax off of food," said Herbkersman, who's supported the effort for several years.

While the sales tax proposal may struggle, legislators expect reassessment reform to climb over criticisms and win approval this year.

There's been strong support from coastal legislators for point-of-sale reassessment. Under state law, counties reassess all property every five years, allowing one-year extensions under certain circumstance. Beaufort County delayed a 2003 reassessment to wait out a failed tax cap proposal.

But legislators in rural counties that have not seen surprising jumps in assessed values may not see the merits of the point-of-sale method, Chalk said.

"They'll just see it as a tax increase," he said. "They're going to say, 'What's the trade-off for me?'"