SC House OKs income tax cut, bringing election year promise closer to reality
South Carolina House lawmakers on Wednesday in a 110-0 vote passed an income tax cut that would lower taxes for about 1.4 million filers.
The tax cut, pushed by Gov. Henry McMaster and House Republican leadership, reduces the state’s top rate to 6.5% from 7% and would eventually bring the maximum rate to 6% in future years if state revenues continue to grow.
The tax cut would keep about $600 million out of state coffers in the upcoming budget year and cost the state about $1 billion a year when it’s fully implemented.
The plan also collapses the middle tax brackets into one 3% tax bracket and exempts from tax all military retirement income.
“Today marks a victory for the people of South Carolina as the House passed a landmark income tax cut with a unanimous vote,” Speaker Jay Lucas tweeted. “This legislation brings significant relief to every South Carolinian, including working-class families and our military retirees, and is a success for all.”
House Democrats on the floor praised the plan, which proponents say also helps middle income tax filers.
“I think this is the best thing since sliced bread in the state of South Carolina,” state Rep. David Weeks, D-Sumter, said.
The proposal still needs to be formally sent over to the Senate for its consideration.
However, Senate Finance Chairman Harvey Peeler, R-Cherokee, is pushing to immediately bring the top rate to 5.7%, while keeping other tax rates in place. It would cost about $1 billion in the first year. It also includes refunding $1 billion back to taxpayers in the state.
Lawmakers are pushing tax cuts as they have $4.6 billion in additional money to allocate in this year’s budget discussions.
McMaster and the entire House are up for reelection this year.
“House Speaker Jay Lucas, Ways and Means Chairman Murrell Smith, House Majority Leader Gary Simrill and the rest of The House of Representatives just took a huge first step towards cutting South Carolina’s income tax,” McMaster tweeted Wednesday. “Our work will not be done this session until I sign a major tax cut into law.”
This story was originally published February 23, 2022 at 11:12 AM.
