South Carolina General Assembly
121st Session, 2015-2016

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Indicates Matter Stricken
Indicates New Matter

H. 3878

STATUS INFORMATION

General Bill
Sponsors: Reps. White, Pope, Clemmons, Duckworth, Goldfinch, Hardwick, Johnson, H.A. Crawford, George, Yow, Ryhal, Hardee, Hayes, Kirby, Bradley, Newton, Erickson and Long
Document Path: l:\council\bills\bbm\9339dg15.docx

Introduced in the House on March 19, 2015
Currently residing in the House

Summary: Tax rates for individuals

HISTORY OF LEGISLATIVE ACTIONS

     Date      Body   Action Description with journal page number
-------------------------------------------------------------------------------
   3/19/2015  House   Introduced and read first time (House Journal-page 33)
   3/19/2015  House   Referred to Committee on Ways and Means 
                        (House Journal-page 33)
   3/24/2015  House   Member(s) request name added as sponsor: Pope
   3/25/2015  House   Member(s) request name added as sponsor: Clemmons, 
                        Duckworth, Goldfinch, Hardwick, Johnson, H.A.Crawford, 
                        George, Yow, Ryhal, Hardee, Hayes, Kirby
   4/14/2015  House   Committee report: Favorable Ways and Means 
                        (House Journal-page 13)
   4/15/2015  House   Debate adjourned until Thur., 4-16-15 
                        (House Journal-page 14)
   4/16/2015  House   Debate adjourned until Tues., 4-21-15 
                        (House Journal-page 31)
   4/21/2015  House   Debate adjourned until Tues., 4-28-15 
                        (House Journal-page 21)
   4/28/2015  House   Debate adjourned until Wed., 4-29-15 
                        (House Journal-page 117)
   4/29/2015  House   Debate adjourned until Thur., 4-30-15 
                        (House Journal-page 56)
   4/30/2015  House   Debate adjourned until Tues., 5-5-15 
                        (House Journal-page 11)
    5/5/2015  House   Debate adjourned until Wed., 5-6-15 
                        (House Journal-page 26)
    5/6/2015  House   Debate adjourned until Thur., 5-7-15 
                        (House Journal-page 11)
    5/7/2015  House   Debate adjourned until Tues., 5-12-15 
                        (House Journal-page 38)
   5/12/2015  House   Debate adjourned until Wed., 5-13-15 
                        (House Journal-page 48)
   5/13/2015  House   Debate adjourned until Thur., 5-14-15 
                        (House Journal-page 20)
   5/14/2015  House   Debate adjourned until Tues., 5-19-15 
                        (House Journal-page 43)
   5/19/2015  House   Debate adjourned until Wed., 5-20-15 
                        (House Journal-page 60)
   5/20/2015  House   Debate adjourned until Thur., 5-21-15 
                        (House Journal-page 48)
   5/21/2015  House   Debate adjourned until Tues., 5-26-15 
                        (House Journal-page 15)
   5/26/2015  House   Debate adjourned until Wed., 5-27-15 
                        (House Journal-page 76)
   5/27/2015  House   Debate adjourned until Thur., 5-28-15 
                        (House Journal-page 62)
   5/28/2015  House   Debate adjourned until Tues., 6-2-15 
                        (House Journal-page 18)
    6/2/2015  House   Debate adjourned until Wed., 6-3-15 
                        (House Journal-page 46)
    6/3/2015  House   Debate adjourned until Thur., 6-4-15
    6/4/2015  House   Member(s) request name added as sponsor: Bradley
    6/4/2015  House   Debate adjourned (House Journal-page 8)
   1/12/2016  House   Debate adjourned until Wed., 1-20-16 
                        (House Journal-page 127)
   1/20/2016  House   Debate adjourned until Wed., 1-27-16 
                        (House Journal-page 10)
   1/27/2016  House   Member(s) request name added as sponsor: Newton
   1/27/2016  House   Debate adjourned until Wed., 2-3-16 
                        (House Journal-page 17)
    2/3/2016  House   Debate adjourned until Thur., 2-4-16 
                        (House Journal-page 15)
    2/4/2016  House   Debate adjourned until Tues., 2-9-16 
                        (House Journal-page 19)
    2/9/2016  House   Debate adjourned until Thur., 2-11-16 
                        (House Journal-page 14)
   2/11/2016  House   Member(s) request name added as sponsor: Erickson, Long
   2/11/2016  House   Requests for debate-Rep(s). White, Pitts, Thayer, 
                        Finlay, Bannister, Hill, Sandifer, Whitmire, 
                        Bernstein, Southard, Hayes, Daning, Crosby, Kriby, 
                        Taylor, Hosey, Wells, McKnight (House Journal-page 46)
   2/23/2016  House   Debate adjourned until Wed., 2-24-16 
                        (House Journal-page 49)
   2/25/2016  House   Debate adjourned until Tues., 3-1-16 
                        (House Journal-page 42)
    3/2/2016  House   Debate adjourned until Thur., 3-3-16 
                        (House Journal-page 47)
   4/14/2016  House   Debate adjourned until Tues., 4-19-16 
                        (House Journal-page 60)
   4/26/2016  House   Debate adjourned until Wed., 4-27-16 
                        (House Journal-page 69)
   4/27/2016  House   Debate adjourned until Thur., 4-28-16 
                        (House Journal-page 72)
    5/4/2016  House   Debate adjourned until Thur., 5-5-16 
                        (House Journal-page 24)
    5/5/2016  House   Debate adjourned until Tues., 5-17-16 
                        (House Journal-page 150)

View the latest legislative information at the website

VERSIONS OF THIS BILL

3/19/2015
4/14/2015

(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

Indicates Matter Stricken

Indicates New Matter

COMMITTEE REPORT

April 14, 2015

H. 3878

Introduced by Reps. White, Pope, Clemmons, Duckworth, Goldfinch, Hardwick, Johnson, H.A. Crawford, George, Yow, Ryhal, Hardee, Hayes and Kirby

S. Printed 4/14/15--H.

Read the first time March 19, 2015.

            

THE COMMITTEE ON WAYS AND MEANS

To whom was referred a Bill (H. 3878) to amend Section 12-6-510, Code of Laws of South Carolina, 1976, relating to tax rates for individuals, estates, and trusts, so as to increase, etc., respectfully

REPORT:

That they have duly and carefully considered the same and recommend that the same do pass:

W. BRIAN WHITE for Committee.

            

STATEMENT OF ESTIMATED FISCAL IMPACT

Fiscal Impact Summary

This bill is not expected to impact state expenditures. The bill would reduce general fund individual income tax revenue by a total of $1,337,963 in FY 2015-16, $26,848,740 in FY 2016-17, and $48,759,298 in FY 2017-18.

Explanation of Fiscal Impact

State Expenditure

This bill is not expected to impact expenditures of the Department of Revenue. The department currently adjusts the individual income tax brackets annually as required in statute. This bill would change the amount of the adjustment for tax years 2016 and 2017.

State Revenue

This bill changes the individual income tax bracket range for tax year 2016 and 2017. Under current law, the tax brackets are adjusted annually by one-half the amount of inflation. Based upon our current assumptions for inflation, the taxable income bracket range for each marginal income tax rate is expected to be $2,940 for tax year 2016. Increasing the bracket amount for each tax rate by $140 to $3,080 as specified in the bill would reduce individual income tax revenue by approximately $25,485,000 for tax year 2016. For tax year 2017, the taxable income bracket range for each marginal income tax rate is expected to be $2,990. Increasing the projected 2017 bracket amount for each tax rate by $280 to $3,270 would reduce individual income tax revenue by approximately $51,461,000 for tax year 2017 compared to the current projected 2017 tax brackets. The impact by tax year is outlined in the attached detailed tables by taxable income range.

The impact on the general fund would be a reduction in individual income tax revenue of $1,337,963 in FY 2015-16, $26,848,740 in FY 2016-17, and $48,759,298 in FY 2017-18. The tax year estimates provided are adjusted to a fiscal year basis by recognizing two quarters of reduced estimated tax payments for the first half of the tax year, or second half of the fiscal year. We anticipate that taxpayers will reduce their estimated tax payments in response to the tax reduction by five and one-quarter percent of the total tax year impact, and the remaining impact is reflected in the following fiscal year for the remaining estimated tax payments and refunds.

ESTIMATE OF TAX YEAR 2016 INCOME TAX ADJUSTMENT BY INCREASING BRACKETS FROM $2,940 TO $3,080

Objective: Increase tax brackets from $2,940 to $3,080 with rates unchanged.

With these brackets and rates, 100% of filers have a lower or unchanged liability and the General Fund is impact is ($ 25,485,000)   

        Current Tax Structure            Estimate of Adjusted Tax Structure   

Baseline                Projected        Adjusted    Average    Total

Taxable    Projected            Average    Average    Average    Tax    Dollar

Income    # of            Taxable    Tax    Tax    Increase/    Increase/

Range    Filers    Cumulative     Cumulative    Income    Liability    Liability    (Decrease)    (Decrease)

2013    2016    # of Filers    % of Filers    2016    2016    2016    2016    2016   

col 1    col 2 (/a)    col 3    col 4    col 5 (/b)    col 6    col 7    col 8    col 9   

0    763,872    763,872    33.93%    0     0    0    0     0

1-5,000    269,839    1,033,711    45.92%    2,448     0    0    0     (430,235)

5,000-10,000    185,378    1,219,089    54.15%    8,107     177    170    (7)    (1,492,557)

10,000-20,000    268,170    1,487,259    66.07%    16,060     624    601    (24)    (5,380,738)

20,000-30,000    187,592    1,674,851    74.40%    27,086     1,396    1,372    (24)    (4,464,681)

30,000-40,000    135,422    1,810,272    80.41%    38,063     2,165    2,141    (24)    (3,223,032)

40,000-50,000    98,703    1,908,975    84.80%    49,010     2,931    2,907    (24)    (2,349,138)

50,000-60,000    74,177    1,983,153    88.09%    60,028     3,702    3,678    (24)    (1,765,424)

60,000-70,000    57,177    2,040,330    90.63%    70,972     4,468    4,444    (24)    (1,360,806)

70,000-80,000    43,346    2,083,675    92.56%    81,900     5,233    5,209    (24)    (1,031,628)

80,000-90,000    33,165    2,116,841    94.03%    92,856     6,000    5,976    (24)    (789,339)

90,000-100,000    24,985    2,141,826    95.14%    103,782     6,765    6,741    (24)    (594,643)

100,000-110,000    19,054    2,160,880    95.99%    114,820     7,538    7,514    (24)    (453,478)

110,000-120,000    14,882    2,175,762    96.65%    125,722     8,301    8,277    (24)    (354,193)

120,000-130,000    11,640    2,187,402    97.17%    136,708     9,070    9,046    (24)    (277,040)

130,000-140,000    9,150    2,196,552    97.57%    147,638     9,835    9,811    (24)    (217,772)

140,000-150,000    7,237    2,203,789    97.90%    158,702     10,609    10,586    (24)    (172,240)

150,000-160,000    5,861    2,209,650    98.16%    169,648     11,376    11,352    (24)    (139,501)

160,000-170,000    4,877    2,214,528    98.37%    180,526     12,137    12,113    (24)    (116,077)

170,000-180,000    3,937    2,218,464    98.55%    191,509     12,906    12,882    (24)    (93,696)

180,000-190,000    3,351    2,221,816    98.70%    202,506     13,676    13,652    (24)    (79,761)

190,000-200,000    2,957    2,224,772    98.83%    213,518     14,446    14,423    (24)    (70,372)

200,000-225,000    5,469    2,230,241    99.07%    231,800     15,726    15,702    (24)    (130,161)

225,000-250,000    3,784    2,234,026    99.24%    259,375     17,656    17,633    (24)    (90,070)

250,000-300,000    5,046    2,239,072    99.46%    298,513     20,396    20,372    (24)    (120,101)

300,000-400,000    5,247    2,244,319    99.70%    376,077     25,826    25,802    (24)    (124,870)

400,000-500,000    2,405    2,246,723    99.80%    487,770     33,644    33,620    (24)    (57,231)

500,000- $1M    3,271    2,249,994    99.95%    729,139     50,540    50,516    (24)    (77,848)

$1 M - $2 M    835    2,250,829    99.98%    1,476,601     102,862    102,838    (24)    (19,872)

$2 M +    347    2,251,176    100.00%    5,460,272     381,719    381,695    (24)    (8,247)

Total    2,251,176            $28,330     $1,483     $1,460     ($24)    ($25,485,000)

2016 Current Tax Brackets    0.00%    $0 to 2,940     Adjusted Brackets    0.00%    $0 to 3,080

3.00%    $2,940 to 5,880             3.00%    $3,080 to 6,160

4.00%    $5,880 to 8,820             4.00%    $6,160 to 9,240

5.00%    $8,820 to 11,760             5.00%    $9,240 to 12,320

6.00%    $11,760 to 14,700             6.00%    $12,320 to 15,400

7.00%    Over $14,700            7.00%    Over $15,400

ESTIMATE OF TAX YEAR 2017 INCOME TAX ADJUSTMENT BY INCREASING BRACKETS FROM $2,990 TO $3,270

Objective: Increase tax brackets from $2,990 to $3,270 with rates unchanged.

With these brackets and rates, 100% of filers have a lower or unchanged liability and the General Fund is impact is ($ 51,461,000)   

    Current Tax Structure    Estimate of Adjusted Tax Structure   

Baseline                Projected        Adjusted    Average    Total

Taxable    Projected            Average    Average    Average    Tax    Dollar

Income    # of            Taxable    Tax    Tax    Increase/    Increase/

Range    Filers    Cumulative    Cumulative    Income    Liability    Liability    (Decrease)    (Decrease)

2013    2017    # of Filers    % of Filers    2017    2017    2017    2017    2016   

col 1    col 2 (/a)    col 3    col 4    col 5 (/b)    col 6    col 7    col 8    col 9   

0    771,511    771,511    33.93%    0     0    0    0     0

1-5,000    272,537    1,044,048    45.92%    2,528     0    0    0     (853,179)

5,000-10,000    187,232    1,231,280    54.15%    8,372     185    171    (14)    (2,994,168)

10,000-20,000    270,852    1,502,132    66.07%    16,585     653    605    (48)    (10,887,913)

20,000-30,000    189,468    1,691,599    74.40%    27,971     1,450    1,402    (48)    (9,018,656)

30,000-40,000    136,776    1,828,375    80.41%    39,306     2,243    2,196    (48)    (6,510,524)

40,000-50,000    99,690    1,928,065    84.80%    50,611     3,034    2,987    (48)    (4,745,258)

50,000-60,000    74,919    2,002,984    88.09%    61,989     3,831    3,783    (48)    (3,566,157)

60,000-70,000    57,749    2,060,733    90.63%    73,291     4,622    4,574    (48)    (2,748,829)

70,000-80,000    43,779    2,104,512    92.56%    84,576     5,412    5,364    (48)    (2,083,888)

80,000-90,000    33,497    2,138,009    94.03%    95,890     6,204    6,156    (48)    (1,594,464)

90,000-100,000    25,235    2,163,244    95.14%    107,173     6,994    6,946    (48)    (1,201,179)

100,000-110,000    19,244    2,182,488    95.99%    118,572     7,792    7,744    (48)    (916,025)

110,000-120,000    15,031    2,197,519    96.65%    129,830     8,580    8,532    (48)    (715,469)

120,000-130,000    11,757    2,209,276    97.17%    141,174     9,374    9,326    (48)    (559,620)

130,000-140,000    9,242    2,218,517    97.57%    152,462     10,164    10,116    (48)    (439,899)

140,000-150,000    7,309    2,225,827    97.90%    163,887     10,964    10,916    (48)    (347,925)

150,000-160,000    5,920    2,231,747    98.16%    175,191     11,755    11,707    (48)    (281,792)

160,000-170,000    4,926    2,236,673    98.37%    186,424     12,541    12,494    (48)    (234,476)

170,000-180,000    3,976    2,240,649    98.55%    197,766     13,335    13,288    (48)    (189,266)

180,000-190,000    3,385    2,244,034    98.70%    209,123     14,130    14,083    (48)    (161,117)

190,000-200,000    2,986    2,247,020    98.83%    220,494     14,926    14,879    (48)    (142,151)

200,000-225,000    5,524    2,252,544    99.07%    239,373     16,248    16,200    (48)    (262,926)

225,000-250,000    3,822    2,256,366    99.24%    267,850     18,241    18,194    (48)    (181,941)

250,000-300,000    5,097    2,261,463    99.46%    308,266     21,070    21,023    (48)    (242,604)

300,000-400,000    5,299    2,266,762    99.70%    388,365     26,677    26,630    (48)    (252,238)

400,000-500,000    2,429    2,269,191    99.80%    503,707     34,751    34,704    (48)    (115,607)

500,000- $1M    3,304    2,272,494    99.95%    752,963     52,199    52,152    (48)    (157,254)

$1 M - $2 M    843    2,273,338    99.98%    1,524,846     106,231    106,183    (48)    (40,141)

$2 M +    350    2,273,688    100.00%    5,638,677     394,199    394,151    (48)    (16,659)

Total    2,273,688            $29,256     $1,540     $1,492     ($48)    ($51,461,000)

2017 Current Tax Brackets    0.00%    $0 to 2,990     Adjusted Brackets    0.00%    $0 to 3,270

3.00%    $2,990 to 5,980         3.00%    $3,270 to 6,540

4.00%    $5,980 to 8,970         4.00%    $6,540 to 9,810

5.00%    $8,970 to 11,960         5.00%    $9,810 to 13,080

6.00%    $11,960 to 14,950         6.00%    $13,080 to 16,350

7.00%    Over $14,950        7.00%    Over $16,350

Frank A. Rainwater, Executive Director

Revenue and Fiscal Affairs Office

A BILL

TO AMEND SECTION 12-6-510, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO TAX RATES FOR INDIVIDUALS, ESTATES, AND TRUSTS, SO AS TO INCREASE THE SIZE OF THE TAX BRACKETS FOR EACH TAX RATE; AND TO AMEND SECTION 12-6-520, RELATING TO THE ANNUAL ADJUSTMENT OF INCOME TAX BRACKETS, SO AS PROVIDE THE BRACKETS SHALL NOT BE ADJUSTED IN TAX YEARS 2016 AND 2017.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION    1.    Section 12-6-510 of the 1976 Code is amended to read:

"Section 12-6-510.    (A)    For taxable years beginning after 1994, 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:

Not over $2,220                                2.5 percent of taxable income

Over $2,220 but not    over $4,440            $56 plus 3 percent of the excess over $2,220;

Over $4,440 but not over $6,660            $123 plus 4 percent of the excess over $4,440;

Over $6,660 but not over $8,880            $212 plus 5 percent of the excess of $6,660;

Over $8,880 but not over $11,100        $323 plus 6 percent of the excess over $8,880;

Over $11,100                                $456 plus 7 percent of the excess over $11,100.

(B)    For taxable year 2016, 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:

BUT NOT

OVER                OVER                            --0--

$        0                $    3,080                        0% Times the amount

3,080                    6,160                        3% Times the amount less $ 92

6,160                    9,240                        4% Times the amount less $154

9,240                    12,320                        5% Times the amount less $246

12,320                    15,400                        6% Times the amount less $370

15,400                                                    7% Times the amount less $524

(C)    For taxable years beginning after 2016, 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:

BUT NOT

OVER                OVER                            --0--

$        0                $    3,270                        0% Times the amount

3,270                    6,540                        3% Times the amount less $ 98

6,540                    9,810                        4% Times the amount less $164

9,810                    13,080                        5% Times the amount less $262

13,080                    16,350                        6% Times the amount less $392

16,350                                                    7% Times the amount less $556

(D)    The department may prescribe tax tables consistent with the rates set pursuant to subsection (A)."

SECTION    2.    Section 12-6-520 of the 1976 Code is amended to read:

"Section 12-6-520.    (A)    Each December 15 fifteenth, the department shall cumulatively adjust the brackets in Section 12-6-510 in the same manner that brackets are adjusted in Internal Revenue Code Section (1)(f). However, the adjustment is limited to one-half of the adjustment determined by Internal Revenue Code Section (1)(f), may not exceed four percent a year, and the rounding amount provided in (1)(f)(6) is ten dollars. The brackets, as adjusted, apply in lieu of those provided in Section 12-6-510 for taxable years beginning in the succeeding calendar year. Inflation adjustments must be made cumulatively to the income tax brackets.

(B)    Notwithstanding subsection (A), for income tax years 2016 and 2017, the department shall not adjust the brackets."

SECTION    3.    This act takes effect upon approval by the Governor.

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This web page was last updated on May 6, 2016 at 1:17 PM