Tax Policy Review Committee
The House Tax Policy Review Committee reconvened today for its seventh and final meeting of the year. This fourteen member ad hoc committee was created by Speaker of the House Jay Lucas this summer and is responsible for reviewing South Carolina's current tax code and submitting suggestions for reform to the Speaker. While there was initially some thought the committee might finish its work and propose recommendations to the Speaker of the House prior to the start of the legislative session, the committee agreed to take its time and gather all necessary information to make informed decisions.
The committee's discussion today centered primarily on reform of the state's income tax laws. Committee staff presented a new proposal modeling a flat tax with minimal standard adjustments for all classes of tax filers. Under the proposal, most itemized deductions would be eliminated and some 700,000 tax filers might see a tax increase. However, committee staff noted that there would be winners and losers in every tax category depending on the number of exemptions currently being claimed by the state's 2.6 million tax filers. The committee's goal is to have a broader and flatter tax code that will help continue to spur job growth and provide greater opportunities for South Carolina families. After considerable discussion and concern by members of negatively impacting those who could least afford a tax increase, staff agreed to work up a new proposal adding in a few exemptions for those not in the higher brackets. The committee will review the new proposal at the next meeting.
Representative Shannon Erickson reported to the committee on efforts led by House Labor, Commerce and Industry Chairman Bill Sandifer to reform our state's business license laws. She said a group, led by the Chairman and including the South Carolina Chamber of Commerce, the South Carolina Municipal Association, the South Carolina Manufacturers Alliance and the South Carolina Department of Commerce, has been meeting since June. Staff to the committee reported the goal is to have a bill all stakeholders can agree to and be introduced in the upcoming legislative session. Both large and small businesses have requested changes, and municipalities have agreed, that a standard of classifications and processes should be streamlined. Current discussions include a centralized website to pay all business municipal fees for work in multiple counties, potentially through the third party vendor that operates www.SC.gov. They are also working through who should handle enforcement and administrative procedures for appeal and address the problem of stacking of taxes to avoid double taxation.
The committee did not discuss property tax or sales tax exemptions at today's meeting. They agreed to regroup once the legislative session begins in January to determine how best to accommodate future meetings.
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