House Plan Cuts Sales Tax

But...tax is applied to more items

December 14, 2017 - 10:59 am
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DECEMBER 14, 2017 BY SOUTH CAROLINA RADIO NETWORK

A South Carolina House panel’s proposal would cut the state’s sales tax in half, but apply it to more things.

The State newspaper reports some state lawmakers are looking at extending a lower overall sales tax to groceries, which are currently exempt from the tax. At the current six percent rate, the state loses out on about $444.8 million per year in potential sales tax revenue, according to Revenue and Fiscal Affairs Office budget analysts.

The House Tax Policy Review Committee is studying a potential drop in the state sales tax from 6 percent to 3 percent and reducing more than $70 billion worth of sales-tax exemptions on untaxed goods and services. While it is highly unlikely such an enormous amount of exemptions would be repealed, the panel says it is at least examining reforms for almost all sections of the current tax code.

One complication, however, is that the analysis found taxing groceries at a three percent rate would still cost South Carolinians more overall than the current six percent rate, even if they saved on sales taxes elsewhere.

The committee will vote on its proposed changes before recommending them to the full House next year.

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