H 4216

South Carolina General Assembly
126th Session, 2025-2026
Bill 4216
Indicates Matter Stricken
Indicates New Matter
(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)
Indicates Matter Stricken
Indicates New Matter
Amended
February 24, 2026
H. 4216
Introduced by Reps. Bannister, Pope, G. M. Smith,
B. Newton, Hiott, Murphy, Moss, Crawford, Bradley, Hager, M. M. Smith, Bustos,
Landing, Lowe, Lawson, B. J. Cox, Jordan, Brittain, Forrest, Neese, Vaughan,
Long, Montgomery, Davis, Sessions, C. Mitchell, Gatch, Herbkersman, Schuessler,
Caskey, T. Moore, Hewitt, Erickson, Bowers, Gilliam, Teeple, Guest, Bailey,
Guffey, Holman, Yow, Ballentine, Martin, Calhoon, Taylor, Hartnett, Robbins,
Willis, Cox, Ligon, Brewer, Gagnon, Hartz, Hixon and Pedalino
S. Printed 2/24/26--S.
Read the first time May 7, 2025
________
A bill
TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY AMENDING
SECTION 12-6-510, RELATING TO INCOME TAX RATES FOR INDIVIDUALS, ESTATES, AND
TRUSTS, SO AS TO REDUCE THE INCOME TAX RATE TO A FLAT 3.99 PERCENT AND TO SET
FORTH STANDARDS FOR ADDITIONAL REDUCTIONS; BY AMENDING SECTION 12-6-50,
RELATING TO INTERNAL REVENUE CODE SECTIONS SPECIFICALLY NOT ADOPTED BY THE
STATE, SO AS TO NOT ADOPT THE FEDERAL STANDARD DEDUCTION AND ITEMIZED
DEDUCTION; BY AMENDING SECTION 12-6-1140, RELATING TO INCOME TAX DEDUCTIONS, SO
AS TO ALLOW FOR A SOUTH CAROLINA INCOME ADJUSTED DEDUCTION (SCIAD); BY AMENDING
SECTION 12-6-4910, RELATING TO PERSONS REQUIRED TO FILE A TAX RETURN, SO AS TO
MAKE A CONFORMING CHANGE TO THE CALCULATION; AND BY AMENDING SECTION 12-6-1720,
RELATING TO ADJUSTMENTS TO THE TAXABLE INCOME OF NONRESIDENT INDIVIDUALS, SO AS
TO MAKE A CONFORMING CHANGE.
Be it enacted by the
General Assembly of the State of South Carolina:
SECTION 1.  Section 12-6-510(C) of the S.C. Code is amended to
read:
    (C)(1) Notwithstanding subsections (A)
and (B), for taxable years beginning after 2025, a tax is imposed on the South
Carolina taxable income of individuals, estates, and trusts and any other
entity except those taxed or exempted from taxation under Sections 12-6-530
through 12-6-550 computed at the following rates with the income brackets
indexed in accordance with Section 12-6-520:
34
At least
But less than
Compute tax as follows
35
$0
$30,000
1.99% times the amount
36
37
$30,000
or more
5.21% times the amount minus
  $966
       (2)(a) Notwithstanding the provisions of
item (1), beginning with Tax Year 2027 and each year thereafter, the top
marginal income tax rate set forth in item (1) must be decreased if individual
income tax revenues collected pursuant to this chapter, minus amounts credited
to the Trust Fund for Tax Relief, are projected to increase by at least five
percent in the fiscal year that begins during the tax year in comparison to
projected individual income tax revenues collected pursuant to this chapter,
minus
 amounts credited to the Trust Fund for Tax Relief, for the
current fiscal year. The reduction required by this item shall continue until
the top marginal income tax rate equals 1.99 percent.
  (b) Beginning with the first tax year
after the reduction required by subitem (a) is fully complete, the 1.99 percent
must be decreased in the same manner as provided in subitem (a) until the
income tax rate equals zero percent. Additionally, once the reduction required
by subitem (a) is fully complete, notwithstanding item (1), the 1.99%, or
further reduced rate, shall apply to all South Carolina taxable income.
  (c) The Board of Economic Advisors
shall make the determination regarding income tax projections beginning with
the initial forecast required pursuant to Section 11-9-1130.
       (3) If the five percent threshold set
forth in item (2) is met, the income tax rate shall be permanently and
cumulatively reduced by a percentage that the Board of Economic Advisors
projects to result in a reduction in individual income tax revenues collected
pursuant to this chapter equal to two hundred million dollars in the fiscal
year that begins during the tax year or twenty-five percent of the recurring
income tax revenue surplus for the fiscal year that begins during the tax year,
whichever is greater. The surplus amount must be calculated in the same manner
as increases in income tax collections are calculated pursuant to item (2)(a).
However, if the five percent threshold set forth in item (2) is met and is not
projected to result in increased collections of at least two hundred million
dollars in the fiscal year that begins during the tax year, then the reduction
is limited to the projected amount of increased collections. Any reduction made
pursuant to this subsection must be rounded up to the nearest hundredth of a
percent.
       (4) Upon the issuance of the initial
forecast, the Executive Director of the Revenue and Fiscal Affairs Office, or
his designee, shall notify the Department of Revenue of the projected
percentage adjustment. The executive director, or his designee, shall provide
similar notice if subsequent modifications to the forecast change the projected
percentage adjustment. However, the forecast in effect on February fifteenth of
the current fiscal year is the final forecast for which the percentage
adjustment is determined, and no subsequent forecast modifications may have any
effect on that determination.
    (D) The department may prescribe
tax tables consistent with the rates set pursuant to this section.
SECTION 2.  Section 12-6-50 of the S.C. Code is amended by adding:
    (21) Section 63(b) through (g) relating
to standard deductions and the itemized deduction and any other relevant
provision of Section 63 that would otherwise allow for standard deductions and
the itemized deduction which are hereby specifically not allowed or adopted.
SECTION 3.  Section 12-6-1140 of the S.C. Code is amended by adding:
    (15)(a) subject to subitem (b), a South
Carolina Income Adjusted Deduction (SCIAD) equal to:
  (i)
fifteen thousand dollars for taxpayers who file as single or married filing
separately;
  (ii)
twenty-two thousand five hundred dollars for taxpayers who file as head of
household; and
  (iii)
thirty thousand dollars for taxpayers who file as married filing jointly or as
a surviving spouse.
       (b)(i) The deduction set forth in subitem
(a)(i) is subject to being reduced by a fraction whereby the numerator is the
amount the taxpayer's federal adjusted gross income exceeds forty thousand
dollars and the denominator is fifty-five thousand.
  (ii)
The deduction set forth in subitem (a)(ii) is subject to being reduced by a
fraction whereby the numerator is the amount the taxpayer's federal adjusted
gross income exceeds sixty thousand dollars and the denominator is eighty-two thousand
five hundred.
  (iii)
The deduction set forth in subitem (a)(iii) is subject to being reduced by a
fraction whereby the numerator is the amount the taxpayer's federal adjusted
gross income exceeds eighty thousand dollars and the denominator is one hundred
ten thousand.
  (iv)
If the fraction calculated by this subitem is equal to or exceeds one, then the
deduction is not allowed. If the fraction is zero, then the deduction is not
subject to being reduced. If the fraction is between zero and one, then the
deduction must be reduced by the corresponding fraction.
       (c)
Any reduction amount which is not a multiplier of ten dollars must be rounded
to the next lowest ten dollars.
SECTION 4.  Section 12-6-4910(1) of the S.C. Code is amended to
read:
    (1)(a) an
individual not listed in subitem (c) who has a gross income for the taxable
year of at least the federal exemption amount plus the applicable basic
standard deduction, plus any deduction the taxpayer qualifies for pursuant to
Section 12-6-1170(B), without regard to a reduction for the retirement income
deduction, and whose filing status is:
  (i) single,
surviving spouse, or head of household;  or
  (ii) married, filing
separately, and whose spouse does not itemize deductions
       (a) an individual whose filing status
is single, surviving spouse, head of household, or married filing separately
and whose South Carolina gross income for the taxable year is more than the sum
of the deduction amount pursuant to Section 12-6-1140(15)(a) in accordance with
the taxpayer's filing status plus the deduction amount the taxpayer qualifies
for pursuant to Section 12-6-1170(B), without
 regard to a reduction for the retirement income deduction.
       (b) an individual not
listed in (c) who files a joint return and whose combined gross income for
 the taxable year, is more than
the sum of twice the exemption amount plus the applicable basic standard
deduction if the individual and spouse had the same household at the close of
the taxable year, plus any deduction the taxpayer qualifies for pursuant to
Section 12-6-1170(B). If the individual or spouse is sixty-five or older, the
standard deduction is increased as provided in Internal Revenue Code Section
63(c)(3) and 63(f)(1).
       (c) an individual listed
below whose gross income exceeds the federal personal exemption amount:
  (i) an individual
making a return under Internal Revenue Code Section 443(a)(1) for less than
twelve months because of a change in the individual's annual accounting period;
  (ii) an individual
described in Internal Revenue Code Section 63(c)(5) (Certain Dependents) who
has unearned income in excess of the amount provided in Internal Revenue Code
Section 63(c)(5)(A), or who has total gross income in excess of the standard
deduction;
  (iii) an individual
for whom the standard deduction is zero.
       (d) a nonresident
individual with South Carolina gross income greater than the personal exemption
amount provided in Internal Revenue Code Section 151(d).
       (e) for purposes of this
subsection:
  (i) "basic standard
deduction" is as defined in Internal Revenue Code Section 63(c);
  (ii) "exemption
amount" is as defined in Internal Revenue Code Section 151(d).  In the case of
an individual described in Internal Revenue Code Section 151(d)(2), the
exemption amount is zero
       (b) an individual who files a joint
return and whose combined South Carolina gross income for the taxable year is
more than the sum of the deduction amount pursuant to Section 12-6-1140(15)(a)
plus the deduction amount the taxpayer qualifies for pursuant to Section 12-6-1170(B),
without regard to a reduction for the retirement income deduction.
SECTION 5.  Section 12-6-1720(2)(a)(i) of the S.C. Code is amended
to read:
    (i) For a nonresident individual, the personal exemptions and the applicable standard deduction or
itemized deductions South Carolina Income Adjusted
Deduction (SCIAD) must be reduced to an amount which is the same
proportion as South Carolina adjusted gross income is to federal adjusted gross
income.
SECTION 6.  Pursuant
to the powers granted to the Department of Revenue in Chapter 8, Title 12 of
the SC Code, the department, in consultation with the Revenue and Fiscal
Affairs Office, and in accordance with fiscal responsibility, shall adjust the
withholding tables to reflect the amendments made in this act.
SECTION 7.  Section 12-6-3632 of the S.C. Code is amended to read:
    Section
12-6-3632. There is allowed as a nonrefundable credit against the tax imposed
pursuant to Section 12-6-510 on a full-year resident individual taxpayer an
amount equal to one hundred twenty-five percent of the federal earned income
tax credit (EITC) allowed the taxpayer pursuant to Internal Revenue Code
Section 32, but not to exceed two hundred dollars.
SECTION 8.  This act takes effect upon approval
by the Governor and first applies to tax years beginning after 2025.
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This web page was last updated on February 24, 2026 at 02:46 PM