South Carolina Senate Committee Approves $1 Billion in Income Tax Refunds | Caroline from the south
(The Center Square) — South Carolina taxpayers could get an income tax refund of between $100 and $700 per tax return if a bill that passed a Senate committee on Tuesday is approved.
The Senate Finance Committee unanimously approved the Income Tax Reduction Bill, S.1087and send the Comprehensive Tax Cut Act of 2022 to the entire Senate.
The discounts, which will affect 2021 tax returns due next month, are part of a $1 billion discount. the invoice would also reduce the state’s two main tax levels (7% and 6%) to 5.7% for the 2022 tax year, a plan that would cost $887 million a year.
“There probably can’t be a better time than right now when everyone is actually suffering from the high gas prices and inflation that we’re having right now with food and everything else. “said Sen. Ronnie Cromer, R-Newberry. . “We really need to give back as much money as possible to our people right now, because they are suffering, as we can.”
The Senate plan features $2 billion in tax relief due to $1 billion in one-time rebates and $1 billion in recurring tax cuts. These reductions include a 33% reduction in property taxes in the manufacturing sector and would eliminate income tax on military retirement income.
The South Carolina House recently approved an income tax reduction planby a vote of 110 to 0, that would lower the state’s top tax rate to 6.5% from 7% for the 2022 tax year. The House bill would also lower that maximum rate of 0.1 percentage point each year, starting in 2023, until it reaches 6%.
This bill has been described as a $1 billion tax cut by Governor Henry McMaster and the leadership of the House.
After the Senate Finance Committee approved the Senate bill, Sen. Darrell Jackson, D-Hopkins, joked, “We’re all having tea now.
Senate Finance Committee Chairman Tom Davis said the state can afford the rebate and reductions because it should have $4.6 billion surplus over the next two fiscal years, based on South Carolina Council of Economic Advisors (BE A).
The bill would eliminate tax on the first $3,200 of income, then an additional tax of 3% minus $96 up to $6,410, 4% minus $160 up to $9,620, 5% minus $256 up to $12,820 and 5.7% thereafter.
The legislative leadership is trying to push the bills through before next month’s budget talks.
“Even if we consider substantial new recurring tax relief, relative to the funds we have available to increase, we would still increase general fund general spending by 6.5%,” Davis said of the upcoming budget.
Sen. John L. Scott, D-Richland, said the $1 billion rebate is intended for all filers, even though 43% of South Carolina residents do not pay income tax. These residents were still paying sales tax, so they participated in creating the surplus.
“It turns out to be a formula that really benefits the middle class disproportionately,” Davis said.