Last week, the House passed its version of an income tax cut. In an unanimous vote of 110-0, the House passed H.4880 which would reduce the 7% top tax rate to 6.5% and phase in the reduction to 6% in the coming years. It allows a brake that if the state’s coffers don’t grow by at least 5% each year the cuts will be halted. The bill also eliminates taxes on military retirement income for our veterans. The bill now resides in the Senate Finance Committee. 

This week, the Senate moved their version of the tax relief bill in a special Senate Finance Subcommittee meeting. S.1087 received a favorable report and moved to the full Senate Finance Committee who will meet next week to take up the bill. As you may recall, the Senate version reduces the top income tax rate from 7% to 5.7% and eliminates income taxes on military retiree pay. The bill also provides a one-time rebate for taxpayers and reduces manufacturing property taxes. 

In other news, the Senate Medical Affairs Committee moved S.2 sponsored by Senator Harvey Peeler that would reform SCDHEC. The bill would divide health and environmental functions of DHEC between two newly created cabinet agencies and consolidate other functions. The Department of Behavioral and Public Health would take DHEC’s health department and the functions of Mental Health and Alcohol and Other Drug Abuse Services. The Department of Environmental Services would take DHEC’s environmental responsibilities and would absorb the Water Resources Division from SCDNR. The bill reassigns oversight of veterans nursing homes to the Department of Veterans Affairs and moves the state’s food safety program to the Department of Agriculture. The bill now moves to the floor of the Senate. 

Finally, last week the Senate Finance Committee amended H.3126 imposing a tax on employers for firing employees who refuse COVID vaccines. The bill imposes an unemployment tax surcharge around $30,000 per employee over four years if an employee is fired for not receiving a COVID vaccine if the business requires its employees to receive them. If an employer has a mandate in place and it fires 10 employees you are looking at nearly $300,000 in fines. The bill raised concerns by many Senators on both sides of the aisle but moved to the floor on a 14-9 vote. The Charleston Metro Chamber opposes this legislation and signed on to a letter of other business organizations organized by the State Chamber. Click here to view the letter. Be on the lookout for an action alert when we get word the bill will be debated on the floor. We expect this bill to be amended.