The South Carolina House of Representatives has passed a tax reform bill aimed at simplifying the state’s tax code and potentially reducing the income tax rate to zero. The bill, known as House Bill 4216, was approved this week and proposes reducing the number of income tax brackets from three to two. Under the new structure, a 1.99% rate will apply to income up to $30,000, while income above that amount will be taxed at 5.39%. The legislation also outlines a plan for further reductions in the income tax rate as state revenues increase.
NFIB State Director Ben Homeyer expressed support for the bill, stating, “This is a strong signal from the House that they are serious about pro-growth tax reform.” He noted that small business owners have been advocating for a simpler system that allows reinvestment into their businesses, and House Bill 4216 represents significant progress in that direction.
House leadership, particularly Chairman Bruce Bannister and Representative Brandon Newton, received recognition from NFIB for prioritizing small business interests during the tax negotiations.
The bill maintains deductions for Social Security and military retirement income, ensuring continued benefits for retirees and working families. Additionally, updated withholding tables are expected to address historical issues of over-collection from South Carolina workers’ paychecks.
The Senate is anticipated to review similar tax reform measures in its 2026 session. Homeyer added his commendation for the House’s efforts: “We applaud the House for moving boldly and responsibly to streamline South Carolina’s tax code. This reform isn’t just good policy—it’s a down payment on a more competitive and opportunity-driven future for our state.”
