The House Tax Policy Review Committee held its third meeting on Tuesday, September 27th, to review property taxes across South Carolina. Frank Rainwater, Executive Director of the South Carolina Revenue and Fiscal Affairs Office, began the meeting with a presentation analyzing the State’s current property taxes and exemptions.
Tom Cone, legal counsel to the Committee, followed Mr. Rainwater’s presentation with a review of Act 388 of 2006. Act 388 exempted owner-occupied homes from paying operating taxes for local schools, shifting the funding burden to other properties such as commercial and rental. Act 388 also increased the State sales tax by a penny with the funds generated to be sent back to local school districts. Other impacts of Act 388 included a reduction to the tax on groceries from five percent to three percent (later eliminated completely by Act 115 of 2007) as well as an amendment to the millage cap imposed on annual increases in millage for local government and school operating purposes.
Following the presentation by Mr. Cone, Burnet Maybank with Nexsen Pruet provided the Committee with statistics and rankings regarding South Carolina’s tax structure compared to other states.
Mr. Maybank confirmed that, although South Carolina has a higher tax rate than many states, the effective tax rate remains very low. He further explained that approximately 47% of individuals who file a State income tax return do not pay income tax to the State. Mr. Maybank also stated that, according to a study by the Lincoln Institute, Columbia has the 8th highest commercial property tax rate in the country and also ranks highest in the nation in industrial property taxes.
Going forward, the Committee plans to take public testimony during the next meeting on Tuesday, October 11th, and will allow public comment by email. During the following meeting on Tuesday, October 25th, the Committee will hold a working session in an effort to formulate legislative proposals going forward. Chairman Tommy Pope (R-York) encouraged members to begin sending their ideas in writing to staff in the days ahead.