With only six days left on the legislative calendar, Gov. Henry McMaster urged state leaders Monday to pass a law that includes tax relief for all South Carolinians.
State leaders are concerned President Donald Trump's tax reform overhaul — signed into law last year — could leave S.C. residents paying more in state income taxes in 2019 if the Palmetto State doesn't change its own tax code.
S.C. taxpayers will pay $1.6 billion less in federal income taxes as a result of Trump's tax law, according to a state analysis.
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However, South Carolinians could pay $180 million more in state income taxes next year — or about $75 a person — if the state simply conforms to federal tax law and doesn't change the state's tax code itself, the study found.
The hardest hit? S.C. taxpayers who make from $50,000 to $75,000 a year.
Even if the General Assembly tweaks the state's tax code, the Legislature first must pass a bill that gives accountants and online tax services time to conform state tax documents to the new federal code.
"Failure to conform our state income tax code before the end of this year will create confusion, frustration and chaos when South Carolinians attempt to file their taxes next year," McMaster wrote in a letter Monday to Senate President Pro Tempore Hugh Leatherman, R-Florence, and House Speaker Jay Lucas, R-Darlington.
Currently, a tax-conformity bill filed in March by House Ways and Means Committee chairman Brian White, R-Anderson, sits in committee.
But McMaster — a Columbia Republican running for election this year — said he will sign a tax-conformity bill as long as it includes tax cuts and relief for South Carolinians.
But that will be tough.
Lawmakers have only six working days left in this legislative session, and most of that time will be used passing bills that have spent months going through the legislative process.
White's conformity bill also missed the April 10 "crossover" deadline for proposals to pass either the House or the Senate. That means even if the House passes it, the proposal only can pass if two-thirds of the Senate agrees to take it up.
In his Monday letter, McMaster suggested lawmakers could address the tax-conformity problem when they return to Columbia briefly this summer to take up gubernatorial vetoes and finish their business for the year.
"The House has a plan in place to address conformity so that South Carolina taxpayers will keep more of their hard-earned paychecks," Lucas said Monday. "For decades the Senate has been the body to take up this issue, but once again, it has refused to put forth the effort and do what is best for our hardworking citizens and our growing economy."
Senate leader Leatherman did not immediately respond to a request for comment.