Income tax

Income Tax Refund, Education Legislation Remains for South Carolina Legislature | Caroline from the south

(The Center Square) – As South Carolina’s regular legislative session ended Thursday, several bills are still in the works, including a proposed income tax refund as well as a proposed legislation to create new education savings accounts.

These bills, S1087 and S935has reached the point of the conference committee and could be ready for when the Legislative Assembly resumes in extraordinary session from June 15 to 17 and from June 28 to 30 for follow-up votes.

the $1 billion income tax rate cut was set for the conference committee after the House and Senate declined to agree on either version on Thursday.

The House version would cut the top state tax rate from 7% to 6.5% for the 2022 tax year, then lower that top rate by 0.1 percentage points each year, starting from 2023, until it reaches 6%. It would also combine tax brackets that were previously at 6%, 5%, 4% and 3% into a single 3% bracket.

The Senate version included a $1 billion rebate on 2021 state taxes, with rebates ranging between $100 and $700 per state tax return. The 43% of South Carolina residents who do not pay state income tax will still receive $100 in tax refund payments this year when they file taxes, which will amount to $116 million. of payments.

Anyone willing to pay up to $100 in taxes will receive the $100 rebate and this rebate will increase with tax liability to a cap of $700 per tax return.

It also includes recurring income tax cuts and would reduce the state’s two main tax tiers (7% and 6%) to 5.7% for the 2022 tax year, a plan that would cost $887 million per year.

The conference committee will include House Majority Leader Gary Simrill, R-York, incoming House Speaker Murrell Smith, R-Sumter and Minority Leader Todd Rutherford, D-Richland. The Senate has asked Finance Chairman Harvey Peeler, R-Cherokee, Sen. Nikki Setzler, D-Lexington, and Senate President Thomas Alexander, R-Oconee, to serve on the committee.

A bill that will create education savings accounts also reached the conference committee.

The House version would allocate $75 million to pay for up to 5,000 vouchers allowing students to attend any state-approved private or public school worth up to $5,000 each from the year school year 2023-2024. The program would be approved for three years.

The Senate version authorized 5,000 scholarships in the 2023-24 school year before increasing to 10,000 in 2024-25 and 15,000 each school year thereafter. The reimbursement would be equal to the average amount of funding per student for public schools in the state.

This would represent $7,140 in the first year and $7,565 in 2025-2026 for a total cost of up to $35.7 million in 2023-2024 and $113.5 million in 2025-2026. This funding will go from the school district where the student is enrolled in the correct ESA.