The House Tax Policy Review Committee met on Tuesday, June 6, 2017, for a briefing regarding the tax impacts of H.3516, commonly referred to as the roads bill, by Representative Gary Simrill (R-York). Tom Cone and Don Hottel, Staff Counsel for the Committee, provided members with a summary of the various tax cuts and rebates contained in the bill. The tax relief components include:

Motor Fuel Tax Credit:

  • Allows owners to seek a rebate for two vehicles for preventative maintenance, including new tires, oil changes, regular vehicle maintenance and the like;
  • Requires SCDOT to offset the payout of the rebate by transmitting funds to SCDOR in a phased-in manner, capped at $114M;
  • Credits not claimed revert back to SCDOT; and
  • Sunsets after year 7.

Income Tax Credit:

  • Institutes, after tax year 2017, a non-refundable individual earned income tax credit 125% of federal EITC.
  • Phased-in through six equal installments of .2083 of a percent.

Two-wage Earner Credit:

  • Increases the current income limit for the two-wage earner credit from $30,000 to $50,000 phased-in starting in 2018.
  • Maximum tax credit increases from $210.00 to $350.00.

Manufacturing Property Tax Assessment Ratio:

  • Decreases the property tax assessment ratio from 10.5% to an effective 9%.

Tuition Tax Credit:

  • Increases the current refundable income tax credit for tuition at both four-year and two-year institutions by 50%, not to exceed $1,500, capped at $40 million in 2018 and every year after plus a cumulative amount equal to the percentage increase in the Higher Education Price index capped at 3%.

Chairman Tommy Pope (R-York) announced plans for the Committee to meet again in early September with the goal of creating a formal tax plan before the start of next year’s legislative session. For a complete summary of the fiscal impact of H.3516 as reported by the Revenue and Fiscal Affairs Office, click here.