H 4603

South Carolina General Assembly
126th Session, 2025-2026
Bill 4603
Indicates Matter Stricken
Indicates New Matter
(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)
A bill
TO AMEND THE SOUTH CAROLINA CODE OF LAWS
BY ENACTING THE "SMALL BUSINESS LIVABLE WAGE TAX CREDIT ACT" BY ADDING SECTION
12-6-3830 SO AS TO PROVIDE FOR AN INCOME TAX CREDIT FOR CERTAIN QUALIFIED
EMPLOYERS WHO PAY NONEXEMPT EMPLOYEES AT OR ABOVE THE LIVABLE WAGE.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION
1.  This act may
be cited as the "Small Business Livable Wage Tax Credit Act."
SECTION 2.  The General Assembly finds
that:
       (1)
Small businesses employ approximately forty-three percent of South Carolina's
workforce.
       (2)
Small employers are the backbone of the state's economy and deserve support in
remaining competitive.
       (3)
Voluntary incentives, not mandates, are the most effective way to encourage
free-market adoption of higher wages.
       (4)
Employees who earn a livable wage contribute more in state and federal income
taxes, strengthening the tax base and reducing reliance on public assistance.
       (5)
A temporary, declining tax credit will allow small businesses time to adjust
pricing, productivity, and operations while raising wages.
SECTION 3.  Article 25, Chapter 6, Title
12 of the S.C. Code is amended by adding:
    Section
12-6-3830. (A) As used in this
section:
       (1) "Qualified employer" means a
business entity registered in this State that:
  (a) employs fewer than fifty
employees;
  (b) is in good standing with the
Secretary of State; and
  (c) elects to participate in this
program voluntarily.
       (2) "Livable wage" means the hourly
wage rate published annually by the MIT Living Wage Calculator, or a successor
source approved by the Department of Employment and Workforce, specific to the
county in which the employee works.
       (3) "Incremental wage cost" means the
difference between the federal minimum wage and the livable wage, multiplied by
the total hours worked by covered employees.
    (B)(1) A qualified employer may claim a
credit against income or payroll taxes equal to the incremental wage cost of
paying employees at or above the livable wage.
       (2) In the first year in which the
credit is earned, the amount of the credit is one hundred percent of the
incremental wage cost. Thereafter, the credit is seventy-five percent of
incremental wage cost in the second year, fifty percent of incremental wage
cost in the third year, and twenty-five percent of incremental wage cost in the
fourth year. The credit may not be claimed beyond the fourth year.
       (3) Unused credit may be carried
forward for two years.
    (C) To qualify for the credit, an
employer must:
       (1) maintain or increase headcount
relative to the previous tax year;
       (2) pay all nonexempt employees at or
above the livable wage;
       (3) submit annual payroll verification
to the Department of Revenue; and
       (4) remain current on all state tax
obligations.
    (D) Participation in the tax credit is
voluntary.
    (E)(1) The department shall promulgate
regulations as necessary to implement the provisions of this section.
       (2) The department shall publish an
annual summary report including:
  (a) number of participating employers;
  (b) number of employees paid livable
wages;
  (c) total credits claimed; and
  (d) estimated increase in individual
state income tax revenue from employees.
       (3) Individual employer payroll data
may not be publicly disclosed.
SECTION
4.  This act takes effect upon approval by the Governor and first applies to
income tax years after 2025. The provisions of Section 12-6-3830 are repealed
on December 31, 2035. Any carryforward credits shall continue to be allowed
until the two-year time period is completed.
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This web page was last updated on December 17, 2025 at 12:48 PM