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Have you been wondering why you owe the government more money than usual while filing your taxes this year? Or wonder where all those empty “tax relief” promises went?
While South Carolinians were busy filing their returns this spring, the state legislature spent the past three weeks raising fees, blocking tax relief, doubling their own paychecks, and gutting insurance protections. They killed three attempts to suspend the gas tax, signed a bill that raises taxes on nearly a quarter of all filers, and blocked a property tax break for anyone under 65. They also found time to hand data centers another tax credit and fast-track new transportation fees. Here is a full rundown of the good, the bad, and the ugly.
General Assembly Kills Three Attempts To Temporarily Suspend the Gas Tax
The Senate and the House has blocked three separate attempts to temporarily suspend the gas tax over the past three weeks.
A Senate joint resolution (S.1045) introduced March 24th by Senator Russell Ott would suspend SC’s motor fuels user fees for 30 days, with an automatic extension for another 30 days if average gas prices haven’t fallen 15%. Governor McMaster has made it clear that he will not support any gas tax pause. There are multiple companion bills (5398, 5419, 5422, 5443, 5475) but S.1045 continues to sit in the Senate Finance Committee.
Two days later, on March 26th, Representative Jordan Pace attempted to bring another joint resolution that would suspend SC’s gas tax for two months (H. 5398) to the House floor for debate. House Speaker Murrell Smith blocked Pace’s attempt after their top budget writer, Representative Bruce Bannister, objected.
House leadership was not finished killing attempts to alleviate South Carolinians, however. According to a FITSNews report, “Smith and Bannister also blocked a separate piece of legislation (H. 5419) sponsored by representatives Mark Smith and Justin Bamberg that would suspend the gas tax for one month.”
Governor Signs Blue-Collar Income Tax Hike
Despite intense opposition from the grassroots and warnings from a handful of lawmakers on both sides of the aisle, the General Assembly passed the blue-collar income tax hike (H.4216) which was signed by Governor Henry McMaster on March 30th. This bill is being paraded by the establishment as a “historic tax cut,” which couldn’t be farther from the truth.
H.4216 replaces the state’s existing three-bracket income tax system with two rates while stripping away the federal standard and itemized deductions South Carolinians previously used on their state returns. The state Earned Income Tax Credit (EITC) has also been capped at $200.
Senate vote to pass H.4216.
According to the bill’s own fiscal impact report, almost 23% of South Carolina filers will see a tax increase while another 34.6% will not see a change in in their tax liability. The rest will see some form of a tax decrease, with the top 1% of South Carolinians (with an annual average income of $1.7 million) will see a tax cut of $3,139 in 2026 as per the Institute on Taxation and Economic Policy.
As we reported in February, this is textbook reverse Robin Hood. The state legislature has decided to raise taxes on working families struggling the most, while simultaneously padding the wallets of their donor base.
House of Representatives vote 71-49 to pass H.4216.
Senate Kills Trump’s No Tax on Tips/Overtime & Senior Deduction While Passing Pay Raises For…Themselves
On March 31st, the Senate voted 16-27 to kill H.3368, the bill that would have conformed South Carolina’s tax code to the federal One Big Beautiful Bill Act for the 2025 tax year. That means South Carolina workers who earn tips or overtime, seniors who would have claimed the new $6,000 federal deduction, and families who relied on the expanded standard deduction received nothing. Fifteen Republicans joined all Democrats in rejecting the measure.
During floor debate, Senators Shane Massey and Everett Stubbs led the opposition, arguing that conforming to the federal code for one year would make taxes appear to increase the following year and that they did not want to raise taxes on their constituents. That argument is intellectually insulting.
These senators are asking South Carolinians to believe that we would rather be overtaxed now than receive one year of legitimate tax relief. The reality is that all 46 Senate seats are on the ballot in 2028 and these senators do not want to spend the next two years explaining why taxes look higher under the very income tax overhaul they just championed. They chose their own electoral comfort over real relief for working families. The question worth asking is…why are our senators actively fighting tax breaks for the people they represent?
Less than an hour after killing tax relief for South Carolinians, the Senate Finance Special Subcommittee moved forward on S.933, a bill that would nearly double legislator pay. The bill was amended in the Senate Finance Committee on April 15th and given a favorable report. Under the amended version, legislators would receive a base salary of $15,000, up from $10,400, plus an in-district legislative service allowance of $32,500, bringing total annual compensation to $47,500. Both figures would be adjusted every two years based on the consumer price index, capped at 5%. More on this in the future.
The same legislators who blocked tax relief for working South Carolinians managed to find time to nearly double their own compensation on the same day. A bit ironic, since affordability seems to be one of the issues certain gubernatorial candidates are campaigning on.
Legislators Fast-Track SCDOT’s Bill to Increase Vehicle/Sales/Property Taxes
As we reported in February, S.831 and its House companion H.5071 are nearly 15,000 words of legislation that grow bureaucracy, weaken oversight, expand transportation debt, and create new revenue streams for the state under the banner of SCDOT “modernization.” The bills were crafted with direct input from SCDOT Secretary Justin Powell, the Municipal Association of South Carolina (MASC), and politically connected private contractors.
Representative Don Chapman even joked during the ad hoc committee process that the committee’s logo should have been dollar signs.
The bills raise biennial registration fees for electric vehicles from $120 to $400 and for hybrids from $60 to $200, a more than 300% increase, and add a new $0.045 per kilowatt hour tax on public EV chargers. Both fee increases are tied to CPI adjustments, meaning they will continue to grow automatically without a legislative vote.
The bills also authorize county governments to impose a new 2% sales tax and to increase annual property tax millage beyond the caps currently in place under Act 388, in exchange for counties taking over roads that SCDOT no longer wants to maintain.
To make matters even worse? The bills allow the state’s $51 billion public employee pension fund to be used to finance toll road bonds, and explicitly exempt those bonds from South Carolina’s constitutional debt limit.
On April 1st, the House Ways and Means Committee voted 22-2 to advance both bills. Only Representatives Micah Caskey and Kevin Hardee voted no.
What in these bills are considered “modernization”? From our analysis, it is just more tax increases dressed up in infrastructure language, fast-tracked through committee in under ten minutes. They are now waiting to be called to the House floor for a vote.
Senate Blocks Property Tax Exemption For All Citizens Under 65
As we reported back in March, S.768, the Homestead Act championed by nearly 50-year incumbent Senate Finance Committee Chairman Harvey Peeler, would add two more property tax homestead exemptions ($75,000 and $150,000) for individuals 65 years old and older with certain residential requirements. During floor debate on February 18th, Senator Lee Bright offered an amendment that would have extended the same property tax break to all South Carolina homeowners regardless of age.
Related Post: The Senate Just Told Everyone Under 60 to ‘Pay Up and Shut Up’
Bright emphasized that tax cuts that pit generations against one another are not good policy, especially when younger working families are struggling to survive in this economy. He also pointed out that the state had no trouble finding $1.3 billion for Scout Motors and $130 million for the Carolina Panthers, but when asked to return roughly $900 million to all of its taxpayers, the Senate suddenly discovered fiscal restraint.
As you may imagine, the response from Senate leadership was defensive. Bill author Senator Peeler attempted to convince Bright to withdraw his amendment by offering him “a seat at the table.” Senator Larry Grooms tried to kill it with a poison pill amendment inflating the exemption to $1 million, a move Bright immediately recognized and rejected. When neither tactic worked, Senator Danny Verdin moved to table the amendment outright. The Senate voted 32-10 to kill the amendment. The age-restricted version of S.768 passed and is now awaiting a hearing in the House Ways and Means Committee.
Dictating How Cities in Greenville, Oconee County, & Beaufort Tax Residents
S.866, the “Municipal Tax Relief Act,” would authorize municipalities in counties that do not currently impose a countywide 1% sales tax to levy their own 1% municipal sales tax, subject to a local referendum. In practice, the bill is narrowly targeted at cities within Greenville and Oconee Counties, which have never imposed a countywide sales tax, and cities in Beaufort County, which would be permitted to hold a referendum in 2028 if a countywide referendum fails first.
At least 20% of the revenue collected must be directed toward property tax relief for owner-occupied homes, with the remaining 80% available for roads, infrastructure, police stations, fire stations, and similar projects. The tax could be imposed for up to eight years and reimposed for up to seven more.
Here we go again as the state attempts to pass laws that dictate to counties how to tax their citizens and even forcing their hand to do so. Why do you think these areas have exploded and are some of the top counties that people are moving to? If a city needs additional revenue, that conversation should happen transparently at the county level where all residents have a voice, not carved out in a deal that benefits city governments while leaving everyone else to foot the bill.
The Senate passed S.866 on a 32-9 vote for second reading on April 1st, and it passed third reading on April 15th. It arrived in the House on April 16th and was immediately referred to House Ways and Means.
Senate Affirms that Data Centers Can Receive Tax Credits of Empty Buildings
S.853 was introduced on January 28th in direct response to SC Revenue Ruling 26-1, a SCDOR ruling issued just three weeks earlier on January 6th that tightened eligibility for the state’s Abandoned Buildings Tax Credit by requiring that a building must have been income-producing before its abandonment. The bill strips that requirement out of state law entirely, meaning any building that has sat vacant for five years or more can qualify for the credit regardless of whether it was ever commercially operated.
The appearance of the intent seemed to be to protect legitimate redevelopment projects like historic restorations and community revitalization efforts. What became clear during Senate floor debate, however, is that the change also opens the door for data centers to claim the credit on vacant properties they acquire and develop. Or perhaps it has something to do with the over 20 million square feet of speculative buildings built in the past several years in the Spartanburg area, that are still standing vacant, and likely all around the state? OneSpartanburg’s PAC, Spartanburg Tomorrow PAC (also Spartanburg Tomorrow Economic Development PAC and Spartanburg Tomorrow Tourism Development PAC), has contributed $15,000 to various legislators this year alone.
Senators Martin, Bright, Cash, Reichenbach, Leber, Rice, Corbin, and Kennedy attempted to add an amendment that would have explicitly excluded data centers from taking advantage of the credit. That amendment was defeated 31-12 by a motion made by Senator Tom Davis. In a joint statement, those eight senators explained that after learning between second and third reading that data centers could benefit from S.853, they voted no on third reading after unsuccessfully trying to remove data centers from the bill.
The Senate passed S.853 with a 33-10 vote anyway and it has since moved to the House Ways and Means Property Tax subcommittee, which gave it a favorable report during the week of March 27th. It is now headed to the full Ways and Means Committee.
South Carolinians who have been watching the legislature hand out one data center subsidy after another should pay close attention to this one as it moves through the House.
Governor Signs Boat Tax Reduction
Now that we have covered some of the alarming pieces of legislation that hurts state residents, let’s take a look at the bone that some South Carolinians are being thrown by the political class.
On March 30th, Governor McMaster signed H.3858 into law, which reduced South Carolina’s boat property tax assessment rate from 10.5% to 6%, phased in over three years and fully in place by 2030. The bill also eliminates the longstanding requirement that outboard motors be titled and taxed separately from the boat, consolidating the two into a single taxable value.
South Carolina has historically ranked among the highest in the nation for boat property taxes, and it’s been showing for a long time. According to the SC Boating and Fishing Alliance, 80% of boats sold in South Carolina and valued at $120,000 or more are currently registered out of state.
The bill passed the Senate 39-1 and the House unanimously. There may be a reason why the legislature was so excited to pass this law. The reduction of taxes will not be coming out of their coffers, but instead it will impact the county. The estimated $40 million in annual property tax relief to boat owners comes directly out of local government and school district revenue, with Lexington County taking the largest single hit at an estimated $9 million annually by 2029. Counties that had already lowered their own boat assessment rates by local ordinance, including Beaufort, Charleston, Dorchester, Florence, Hampton, and Horry, will see no change. For everyone else, the phased reduction begins with property tax years after 2026.
Insurance Reform Trojan Horse
Under current law (Section 38-77-280), automobile insurers in South Carolina are already required to waive deductibles on automobile safety glass claims entirely under Comprehensive and Collision coverage. That means that if your windshield needs to be replaced right now, you pay nothing out of pocket regardless of your deductible if you carry these coverages. That is the existing standard protection for all SC drivers.
H.4817 guts that protection. The bill does two things regarding automobile glass claims:
(1) It sunsets the existing mandatory zero-dollar deductible for glass claims on December 31, 2026. After that date, the free glass replacement that SC drivers currently enjoy as a right disappears.
(2) Beginning January 1, 2027, it replaces the mandatory waiver with a voluntary offering. Insurers would only be required to “offer” a zero-dollar deductible option for glass, meaning they can charge extra for it. Drivers who want the same protection they have today would have to pay an additional premium to get it.
This is a straight reduction in consumer protection disguised within a massive insurance reform bill. South Carolina drivers currently have one of the strongest glass claim protections in the country at no extra cost. After January 1, 2027, that same protection becomes an add-on that insurers can price however they want. Drivers who do not actively opt in and pay for the upgraded coverage could find themselves paying a deductible of hundreds of dollars for a windshield replacement that would have cost them nothing the year before. Opting in could cost consumers anywhere from an additional $60 to $150 per year to keep this coverage. Who wants to bet insurers won’t drop premiums one penny if this coverage goes away?
On April 1st, the House voted 76-35 to pass second reading of H.4817. The next day, they sent it to the Senate. H.4817 currently sits in the Senate Banking and Insurance Committee.
The $2.7 Billion Question: Where Is Our Tax Relief?
While your legislators have been busy raising taxes on working families, fast-tracking fee increases, blocking property tax relief for anyone under 65, and nearly doubling their own paychecks, Governor McMaster announced in January that South Carolina’s economy generated $2.7 billion in surplus revenue for the upcoming fiscal year. Read that again. $2.7 billion dollars in surplus revenue, and the best this legislature could offer working South Carolinians was a boat tax cut that comes out of county budgets, not the state’s.
The pattern is obvious. When there is money to give to Scout Motors, there is $1.3 billion. When there is money to give to the Carolina Panthers, there is $130 million. When there is money to fund data center subsidies, the legislature moves quickly.
But when Senator Lee Bright asks for a property tax break for every South Carolina homeowner, 32 senators vote to kill it in under an hour. When workers ask for the same no-tax-on-tips and no-tax-on-overtime relief that the federal government already passed, 27 senators say no because it might be politically inconvenient in 2028.
When three separate attempts are made to give drivers even a temporary break at the gas pump, General Assembly leadership blocks every single one before they can reach the floor for a vote.
This legislature has $2.7 billion in surplus revenue, a Republican supermajority in both chambers, and every political tool available to deliver real, broad-based tax relief to every South Carolinian. They have chosen not to. That is not a policy disagreement. That is a choice, and it is one they will need to answer for at the ballot box in 2026 and 2028. In the meantime, bookmark every vote listed in this article. Your legislators are counting on you to forget. Do not let them.