Sales taxes may change in South Carolina

The StateJuly 21, 2010 

You could have to pay a state sales tax soon on the water and electricity that you use at your home, and the groceries and prescription drugs you buy at a store.

Members of the S.C. Tax Realignment Commission, a legislatively appointed group of finance and tax experts, will vote today on whether to eliminate nearly $700 million in state sales tax exemptions.

If the commission approves, the General Assembly will have the final say on whether the exemptions are eliminated during its session that begins in January.

But that's far from a done deal. S.C. legislators have been loathe to increase any taxes.

The elimination of the sales tax exemptions would be paired with a cut in the state's overall sales tax to 4.96 percent. That is down from the current 6 percent rate.

Eliminating the sales tax exemptions is a step in comprehensively reforming South Carolina’s taxes. Calls for reform have been a near-constant talking point among lawmakers and political candidates since the recession hit two years ago, battering the state’s budget and forcing cuts in state agencies and services.

Commission members say South Carolina must update its tax system to create the broadest tax base possible with the lowest tax rate possible.

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