The State

COLUMBIA — S.C. parents with children will get a tax break as part of a proposal that state lawmakers say will provide families with much-needed tax relief. Those with children under age 6 will get an even bigger break.

The Senate Finance Committee will consider the proposal Wednesday. If passed, it heads to the full Senate next week as part of a special legislative session.

The proposal adds a state tax deduction for dependents of $4,110, starting with the current tax year. It also adds another $4,110 deduction for families with each child under 6 years old, meaning the parents of a toddler could get an $8,220 exemption.

“There’s a lot of tax breaks for older citizens,” said state Sen. Vincent Sheheen, D-Kershaw, who is on the Senate Finance Committee. “Generally, families don’t have those tax breaks. We didn’t want to see their taxes go up” because of the new federal tax law.

President Donald Trump signed into law changes to the federal tax code late last year — the first changes since the mid-1980s — that included repealing personal exemptions. Without changes to the state’s tax law, legislators worried S.C. taxpayers would be hard hit since the state tax code is tied to the federal law.

Simply conforming the state’s tax code to federal tax law — a perfunctory measure taken by lawmakers each year — would have resulted in S.C. taxpayers paying an additional $253 million in taxes, according to an S.C. Revenue and Fiscal Affairs Office analysis.

The bill offsets that windfall to the state, what would have been a tax hike for South Carolinians, by also adding in a $1,525 personal exemption on state income taxes. The bill also includes an adjustment to index individual state income tax brackets for inflation that will save taxpayers $4 million a year, money that otherwise would have gone into the state’s general fund.

“Had we just conformed to the federal tax code, it would have caused huge disruptions for S.C. taxpayers,” Sheheen said.

The state Senate will take up the bill next Tuesday. If the bill is adopted, the S.C. House will return to Columbia for a special session later next week, on Oct. 3-4.

Lawmakers said Tuesday they have made every effort to soften the tax hikes to S.C. taxpayers stemming from the new federal tax law.

“Whether we passed (it) or didn’t, without doing it right, there would be increases to taxpayers,” said state Sen. Sean Bennett, R-Dorchester, also a member of the Senate Finance Committee.

But, Bennett added, lawmakers still need to overhaul the state’s tax laws.

“At the end of the day, this doesn’t fix our problem. This kind of plugs the dike.”