South Carolina's budget conference committee meets Tuesday, May 28.
As competing budget proposals for the new fiscal year come into focus, South Carolina finds itself with a significant opportunity for tax relief. The House FY 2024-25 budget aims to provide homeowners with a sizable one-time property tax credit, plus enact a small income tax cut. The Senate budget proposes an income tax cut that is twice in size, though it doesn’t offer property tax credits.
“How wonderful it is to have the House and the Senate fighting over which tax deduction is best,” Sen. Finance Chairman Harvey Peeler recently told reporters, according to the SC Daily Gazette.
But what if we didn’t need to pick a winner in this tax-cut showdown? What if South Carolina delivered a budget achieving maximum tax relief – one that speeds up income tax reduction and lowers the next round of property tax bills? Not only is this possible from a financial standpoint (not to mention the best choice for taxpayers), it is also the correct thing to do under state law.
To understand this, let’s take a closer look at the House and Senate budget proposals...
Tax relief takeaways
House plan
Uses $500 million in sales tax surplus to provide one-time property tax credits
Delivers a permanent 0.1% personal income tax cut (6.4% -> 6.3%)
Senate plan
Spends the $500 million on roads and bridges, rural infrastructure, and a new medical campus for the University of South Carolina
Delivers a permanent 0.2% personal income tax cut (6.4% -> 6.2%)
SCPC recommendation
Combine the tax-relief proposals for maximum effect
Utilize the entire sales tax surplus (up to $600 million) to provide property tax credits
Deliver a 0.2% personal income tax cut, if not greater
Read the full article Getting the most tax relief out of the FY25 budget.
Courtesy of the South Carolina Policy Council
Comments