SC tax reform: you could pay more for groceries, less in sales tax

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A tax reform proposal in the South Carolina House could mean higher grocery and utility bills. Right now both are exempt from the state’s sale tax, but if the reform moves forward those exemptions would go away.  

The proposal could save you money in the long run. Rep. Jay Jordan, (R) Florence, is on the tax policy review committee. He said even if we do see those higher taxes in some areas, the House is also looking to cut taxes in other ways. 

If the proposal moves forward, you would start paying taxes on your meat, produce or most of what fills your grocery bags. But to partially offset that cost, the panel proposes cutting sales tax in half. 

“In getting rid of the majority or a lot of these exemptions we can therefore roll back that rate, as you said, cut it in half,” Jordan said. “Get it down to the three percent, and that’s better for everybody.”

He said the state must conform to last year’s federal tax overhaul. “Sales tax is part of that. The income tax is a big part of that as well.”

At around seven percent South Carolina has one of the highest state income taxes in the Southeast. House members work now to get that under five percent. “We’re not where we need to be as a state for tax policy,” Jordan said. “We need to reform our tax policy so that we can get more competitive so we can move towards that broader, flatter, fairer system.” 

The recent changes to the federal law will save South Carolinians $1.6 billion on their federal income taxes. But unless state laws are reformed to reflect federal, people could pay $180 million more in state income taxes next year, or about $75 dollars per person, according to the State Revenue and Fiscal Affairs Office.

“This legislation is not intended to be the final product immediately,” Jordan said. “You know this thing is gonna take a lot of twists and turns and is gonna look completely differently.”

Jordan said House members are in the process of figuring out which exemptions work for the state right now in 2018 and which don’t. The panel unveiled the proposal Thursday, so this will be an ongoing and developing process. 

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