Opinion Extra

Op-ed: It’s past time for comprehensive tax reform in SC

What do you pay in South Carolina sales tax?

The percentage varies depending on the county in which you live
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The percentage varies depending on the county in which you live

In 2014, I moved my business from Orlando, Florida, to Columbia, South Carolina. Born and raised in the Midlands and a proud graduate of the University of South Carolina, I knew firsthand the talent and dedication the people of this state had to offer. As the current chairman of the S.C. Chamber of Commerce and a board member on USC’s Athletic Board, among a variety of others, community involvement plays a key role in my life. By moving my company to this state, I am providing quality, high-paying manufacturing jobs which will continue advancing my community forward. For me, the decision was simple, but for others, it may not be as straightforward.

Moving my company home was the best decision for my heart, but it was also a costly choice. In the 2019 Tax Foundation State Business Tax Climate Index, South Carolina ranks 35 out of all 50 states. By comparison, Florida ranks at number 4 and North Carolina, after recently passing a comprehensive tax reform bill, ranks at 12. Right now, SC’s top marginal income tax rate is the highest in the Southeast at 7%. Florida has no income tax and North Carolina’s rate is substantially lower than SC’s at 5.25%. SC’s sales tax base is eroding and the second narrowest in the Southeast. Florida and North Carolina fare much better. The transition from Florida to South Carolina resulted in an increased state tax bill for my company, and a decrease in the funds to invest back into my business.

My business peers in Florida responded with skepticism after hearing of the plan to move my business to South Carolina. Many did not understand why I would voluntarily accept the trials and stressors involved with relocating, while additionally raising my business expenses in the process.

The Palmetto State is home to the kindest people you will ever meet. Our universities provide the best training anywhere in the country, and our workers possess the talent and grit necessary to compete in the global marketplace. These are facts that a nonresident may not have considered.

Lou Kennedy

If South Carolina were to improve its tax climate, business owners from across the country would look upon the state with interest. Current South Carolina businesses would be able to raise wages and expand into new markets allowing communities around the state to benefit from increased investments.

This sort of policy change has been proven effective. Economic growth and job creation have outpaced national and regional averages since North Carolina began reforming its tax code in 2013. For two consecutive years, Forbes has listed North Carolina as the number one state in America to do business.

I am calling on the state Legislature to pass comprehensive tax reform in order to help South Carolina compete financially with other states in our region. I am confident that if the tax costs were attractive enough to get business owners to consider our state, many of them would begin to see all of the good that South Carolina has to offer and move their operations to the Palmetto State.

If you would like to see more high-paying job opportunities and increased business investment in South Carolina, join me by writing to your senators and representatives in the state Legislature to urge them to enact tax reform today. It is up to us to make the change we want to see in our community.

Lou Kennedy is president and CEO of Nephron Pharmaceuticals Corp.