COLUMBIA, South Carolina — South Carolina’s income tax rates have just been reduced from 7% in 2022 to 6.5% in 2023.
As the new year approaches, so do adjustments in tax rates, which will take effect on January 1, 2024.
Governor McMaster began asking for an income tax drop in 2018, even though the state has the highest personal income tax rate in the Southeast and the 12th highest in the country, at 7%.
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McMaster has since approved what he claims is the largest income tax decrease in state history, lowering the highest income tax rate from 7% to 6.5%.
“Lower tax rates will provide some relief to taxpayers,” 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 concerning our surroundings.”
Governor McMaster signed the FY 2023-2024 state budget into law in June 2023, which includes $96.2 million for a.1% income tax cut.
The governor remarked in a statement to news19:
“South Carolina had the highest personal income tax rate in the Southeast and the 12th highest in the country until recently.” No more. In 2022, I was pleased to sign into law the largest income tax cut in California history. This year, taxpayers will keep $96.2 million of their hard-earned money rather of giving it to the state government.”
According to a representative for the Governor’s office, the goal is to lower personal income tax by.1% each year until it reaches 6%, which, according to King, is still on the high side.
“When you look at the United States as a whole, it will still be high, but 6 percent is still reasonable.” I believe there are additional factors, such as accessible tax credits, that contribute to lowering the marginal rate.”
Knowing that there is room in the budget to make the 1% reduction this year, King advises keeping proactive year-round until tax season arrives.
“Taxpayers take advantage of ‘My Doorway.’ That is South Carolina’s taxpayer website, and it is wonderful. You can pay estimated taxes and check the status of your refund. You can sometimes simply ask, “Hey, did you get my return, did you get my payment?”
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With an aim of 6% by 2028, the personal income tax rate will continue to fall. Whether or if financing is available in the next years will determine the annual rate of 1%.