As part of our mission to be on the forefront of advocacy for South Carolina CPAs, it has come to SCACPA’s attention that a South Carolina House panel has proposed a tax reform package that would include a tax on services.
There is currently no tax in South Carolina on services, but this would affect all manner of professional service providers. Examples of this would include lawyers, veterinarians, doctors — and professional financial service providers.
The aim of the House proposals is to lower the current state sales tax of 6% — but which contains numerous exemptions (groceries, utilities, services) — with an across-the-board 3% rate that is being promoted as “broader, fairer and flatter.”
The panel has a separate proposal with a state income tax that would be a flat 4.85% rate, as opposed to the 3%-7% rates that currently exist.
At this stage, these are proposals and not a bill that has been introduced. If and when these become bills that are up for debate, we will alert you and encourage you to get in touch with legislators to voice your opinion. The income tax proposal could become part of the annual conformity legislation.
We remain focused on getting a conformity bill passed this year. In all likelihood, these tax proposals are too large in scope and coming too late in the session for action to be taken on them individually. But be on notice that ideas of significant tax reform to include a possible tax on services are being seriously discussed.
The full documents that spell out the proposals can be found on the website for the South Carolina House Tax Policy Review Committee.
When you are ready to reach out to your representatives to have your voice heard, you can find the contact information for your legislators at the State House’s Find Your Legislators search engine.