South Carolina proposes 3.99% income tax rate for all in 2026

COLUMBIA, S.C. (WSPA) – South Carolina leaders made an announcement on Tuesday regarding the future of the state’s income tax.

Governor Henry McMaster announced a new bill to make the state income tax 3.99% for everyone in 2026, no matter their income.

The state income tax currently ranges from 0 to 6.2%.

Representative Bruce Bannister (R – Greenville), Chairman of the House Ways and Means Committee, said following 2026 the General Assembly will work to get to another goal of 2.49% income tax.

“We keep the promise that we’re going to continue to go down. We anticipate putting in the bill and additional $200 million each year that the budget continues to be healthy,” Bannister said.

This bill would put South Carolina’s income tax lower than North Carolina, Georgia, Alabama, and Virginia.

“Lower tax rate, a simpler tax system, and more money in your pocket,” Bannister added. “It’s a win for families, workers, and businesses in South Carolina.”

Representative Todd Rutherford (D – Richland), House Minority Leader, said this is a good idea but it’s important that lower income taxpayers don’t get hurt.

“Democrats are not going to stand in the way of cutting taxes,” Rutherford said. “We just want to make sure that it is done responsibly, that they were cutting the right taxes, and furthermore, that we have new income sources coming in.”

Currently 44% of people in the state don’t pay income tax, so for them the bill would raise their taxes from zero to 3.99%.

“Everybody has to pay something, a little something at least to be a part of this great state of South Carolina,” Governor McMaster said.

“That’s the beauty of a flat rate that those who pay lower will pay less taxes, and those who earn more will pay more taxes,” said Speaker of the House, Representative, Murrell Smith (R – Sumter).

Leaders said in discussions about this bill, they will also be talking about sales and property tax.

Bannister said this bill maintains all existing deductions and credits, including those for military families, senior citizens, and families with dependents.