Bill > H4458

This bill amends South Carolina's income tax law to gradually reduce the top marginal income tax rate from 6.5% to 5% through a phased approach. Specifically, the bill establishes a mechanism where the top marginal tax rate will decrease by 0.1 percentage points each year, but only if the state's general fund revenues are projected to increase by at least 5% in the upcoming fiscal year. For tax year 2022, the top marginal rate will remain at 6.5%, and subsequent reductions will occur annually until reaching 5%. The bill also updates income tax brackets, adjusting the thresholds for different tax rates, with the lowest bracket remaining at 0% and the middle bracket at 3%. The Revenue and Fiscal Affairs Office will be responsible for projecting revenue increases and notifying the Department of Revenue about potential rate reductions. The income tax brackets will continue to be indexed for inflation, and all reductions are permanent and cumulative. The bill will take effect upon the Governor's approval, representing a cautious approach to tax reduction that is contingent on the state's fiscal health.

Budget and Finance

https://www.scstatehouse.gov/billsearch.php?billnumbers=4458&session=126&summary=B