COLUMBIA, S.C. (AP) — Some South Carolina House members are looking at changes to tax laws in the state, including removing the sales tax exemptions that reduce annual collections by $3 billion a year.
Multiple media outlets reported the panel is looking at making property tax changes and also reducing the top state income tax rate of 7 percent.
Most on the 14 members of the panel meeting Tuesday agreed changes need to be made. The 2017 session of the General Assembly begins in January.
Lexington Rep. Todd Atwater says South Carolinians want a comprehensive review of the tax laws.
The state loses more than $3 billion a year in revenues because some sales are exempt from the state’s 6 percent tax. Those include manufacturing items, services, most food and prescription drugs.
Lobbyists for some of the affected industries say any repeal would hurt manufacturers.
Rep. Anne Thayer, R-Anderson, suggested phasing out the sales tax exemptions. The state should not end the exemptions all at once, she said.
On the state income tax, the 7 percent top rate discourages businesses and people who consider moving to South Carolina, said Rep. Shannon Erickson, R-Beaufort.
Lawmakers want the top rate to be below Georgia’s 6 percent top rate and North Carolina’s flat 5.75 percent rate, said Rep. Tommy Pope, R-York, who is chairing the panel.
A 2006 property tax law change exempted owner-occupied homes from paying for the operation of local schools, though those residents do pay when school districts borrow money for construction.
Lawmakers say the law shifted the tax burden for primary and secondary education to commercial and other properties, including rental homes.
Lawmakers are considering whether to reduce the 6 percent assessment rate for commercial and rental property and the 10.5 percent rate on other business and manufacturing property.