From 6 Percent to 1.99 Percent: South Carolina Set to Lead Nation on Income Tax Relief

It’s set to be a historic week in South Carolina, where the statehouse in Columbia is expected to vote for final passage on H. 4216, legislation that will move the state from a progressive income tax code with a top rate of 6 percent down to a flat 1.99 percent rate over the next half decade. Enactment of H. 4216 would not only relieve the Palmetto State of its distinction as home to the highest marginal income tax rate in the southeast, it would allow South Carolina to boast the nation’s lowest flat income tax rate, which currently belongs to Arizona and its 2.5 percent flat rate. 

Speaker Murrell Smith (R), House Ways & Means Chairman Bruce Bannister (R), and their South Carolina House colleagues first passed H. 4216 last year. Last month, the South Carolina Senate passed H. 4216 after amending it so that the income tax rate drops farther and faster. The South Carolina House is expected to pass the amended version of H. 4216 this week and then send it to Governor Henry McMaster (R), who is expected to sign it. 

“We must continue to reduce our taxes,” Gov. McMaster said during his final State of the State Address on January 28. “Until a few years ago, we had the highest personal income tax rate in the Southeast and the 12th highest in the nation.

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