COLUMBIA, S.C. — In recent years South Carolina has seen a reduction in personal income tax rates from 7% in 2022 to 6.5% in 2023.
As the new year approaches so do changes to the tax rates, come January 1, 2024.
In 2018, Governor McMaster began calling for an income tax cut with state having the highest personal income tax rate in the Southeast and the 12th highest in the nation, sitting at 7%.
Since then, McMaster signed what he says is the largest income tax cut in state history, which immediately cut the top income tax rate from 7% to 6.5%.
"Obviously, tax rates moving downward is going to provide taxpayers with a little relief," said Rory King, a certified public accountant (CPA) in Columbia. "The hope is that they continue to make cuts, as long as the revenue is where it needs to be and we hit that 6% target, which is heading in the right direction to be in line with other states because we are a little higher than in relation to our surroundings."
In June of 2023, Governor McMaster signed the FY 2023-2024 state budget into law, which includes $96.2 million for a .1% income tax cut.
In a statement to news19 the governor said:
“Until recently, South Carolina had the highest personal income tax rate in the Southeast and the 12th highest in the nation. No more. I was honored to sign into law the largest income tax cut in state history in 2022. This year taxpayers will keep an additional $96.2 million of their hard-earned money instead of sending it to the state government.”
The goal, according to a spokesperson for the Governor's office, is to reduce personal income tax by .1% every year until reaching a total of 6%, which, according to King, is still on the higher side.
"It's still going to be high when you look at the United States as a whole but 6 percent is still fair. I think there are other things too that help bring that marginal rate down like tax credits that are available."
Knowing there is room in the budget to make the .1% reduction this year, when it comes to paying those taxes King says staying proactive year round until tax season approaches.
With 6% being the goal come 2028, continuing to see the personal income tax rate drop by .1 percent yearly will be contingent on whether or not funding is available in coming years.